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Here’s what a per capita recession means for the property market

Recent Australian GDP results indicated Australia has fallen into a per-capita recession.

It has also been revealed consumer confidence has fallen by 4.6 percent. This has happened immediately after the recession was announced after the GDP per capita fell 0.2 per cent in the December quarter after a 0.1 per cent drop in the prior three months.

Over last weekend in Sydney, auction clearance rates were 54%. This softened from the week before at 65.3% according to Domain.

So what does all this mean for your property values?

Anna Porter of Suburbanite says “GDP and general economic performance as a measure of the Australia economy as a whole is not the best indicator of how the property market will perform.”

“The property market is a rich tapestry of key market drivers that create performance and down turn, each state and property sectors will all move up and down at different times based on macro and micro economic influences. Some of the other key elements to forecasting market movement is population growth, interest rates, local employment opportunity and diversity, supply and demand of housing and affordability,” continues Porter.

“With residential and commercial markets seeing different cycles”.

“We saw this just after the GFC hit, with Melbourne residential market seeing an average growth rate of about 26% just after the GFC, this was a result of all those other key drivers and the micro economic environment, coupled with supply and demand and affordability. With population growth still strong and Victoria, ACT and QLD leading the way according to recent market reports by QBE, and interest rates at historical lows, the property market will still have some good growth locations throughout the country, even in this current economic climate,” says Mrs Porter.

“The markets that we see having the strongest outlook based on these drivers are Canberra, Adelaide and Brisbane, with Perth also starting to see some modest upswing. I understand that hearing things like a ‘per capita recession’ is concerning for many people, and given much of the country is invested in property or real estate assets, be it through their own home, investment properties or super, I wouldn’t start selling up just yet and I certainly wouldn’t put a sweeping brush over the property market and consider it doomed.”