My business, which publishes the Hotspotting.com.au website, has a pretty simple philosophy in the pursuit of success: if we make our customers happy and/or satisfied, we’ll be successful. The idea is to be helpful to people trying to achieve an objective – for example, finding a good location to buy a property to achieve a good rental return and capital growth over time. The philosophy is: if we’re helpful to people, they’ll become our customers and the business will be successful. In my experience, most businesses have approaches which are similar – if they provide good products and service, their customers will be happy and they will be successful. BUT … News media is different. The business model pursued by most forms of mainstream media is that they can make money by making people feel bad. Media organisations set out to profit by alarming people.

There are a couple of notable things about the latest inflation result. According to the ABS, annual inflation fell to 4.9% in July, down from 5.4% in June and the high of 7.8% in late 2022. This is good news overall, because it means the level of price increases in many items, including food, is abating. And it’s good news from the viewpoint of mortgages, because it makes further increases in interest rates increasingly unlikely. With the rate of inflation coming down fast, it appears that the brutal one-year barrage of constantly rising interest rates is over. But the other notable thing about the inflation number is that it was much lower than predicted. And by that I mean much lower than predicted by the nation’s gaggle of bloated, over-rated and over-paid economists who seem to struggle to forecast anything with any level of accuracy.

Overwhelmingly the theme of property markets across Australia is one of recovery. Hotspotting’s new Spring 2023 survey of sales activity throughout the nation shows that most of the cities and regional markets which had been in decline are now moving emphatically into a phase of revival. Sydney, Brisbane and Melbourne, as well as the regional markets of Queensland, South Australia and Victoria, are leading a significant momentum shift in Australian real estate. The recovery in activity and prices has been building gradually since the start of the year but has surged to another level in the latest quarter. The Spring 2023 edition of The Price Predictor Index is the most optimistic quarterly edition since 2021, following 18 months in which many markets struggled and sales activity steadily declined.

In keeping with the great tradition in Australian politics of providing window dressing rather than real solutions, the political leadership has created a media opportunity but no resolution of the housing shortage crisis. Right now, what this country needs is real policies to encourage and incentivise mum and dad property investors. Governments need to create a climate in which ordinary Australians will be motivated to buy investment properties and make them available for long-term rentals. They need to be encouraged, financially rewarded - and congratulated - for doing so.

The general theme for property markets around Australia is recovery, with many cities and regional markets mounting significant revivals in their markets as the year has evolved. But there’s one major market that I would avoid as an investor – Canberra. This is a market that looks increasingly unattractive, for a host of reasons, including political interference.

Every year around August, real estate agents and news media start chattering about the upcoming “Spring selling season”. The general theme is that this is the best time to sell, because flowers will be blooming and there will be optimism in the air as temperatures rise. But the same people who proclaim this to be the best time for vendors, also declare that this is the best time to buy. By definition, it cannot be both. If it’s a sellers’ market, it’s difficult to argue credibly that it’s a buyers’ market at the same time. Such is the nature of hype and hyperbole in the residential property industry. The truth is that there is no best season is which to sell or buy real estate.

We’ve seen significant improvement in markets across Regional Victoria recently, as the state joins the recovery momentum seen in many markets across Australia. Our latest survey of market activity shows that, in Regional Victoria, the revival has gone to another level lately. Our research shows that, in the latest quarter, the number of declining locations has halved and the number recovering locations has more than doubled. Locations with positive rankings in our survey have increased from 45% of total Regional Victoria locations to 65%, led by a surge in the number of towns and suburbs classified as recovering markets. 53 locations previously ranked as declining or plateau markets are now classified as recovering markets, up from 24 in the previous quarter, while the number of locations with negative classifications have dropped from 71 to 47. At the same time, locations previously ranked as recovering markets have continued to improve and are now classified as rising markets.

Here’s a quick quiz to see whether you’ve been paying attention lately.

Question one: How many times have predictions of things like property prices falling off a
cliff appeared in media headlines in the past, say, three years?

Question two: How many times have things actually gone ahead and fallen off the forecast
cliff?

Question three: Should we be listening any more to journalists and economists who predict
these dire cliff disasters?

So, how did you go with the quiz?

I don’t have the exact number of headlines which have forecast a mortgage cliff or a market
cliff or prices falling off a cliff, but it would number in the thousands so far in this decade of
the 2020s.

Now, as to how many times things have actually fallen off the alleged cliff, I do have a
precise answer: exactly zero times.

We were told property prices would fall off a cliff in 2020 but they rose.

The Melbourne market has staged a remarkable turnaround, transitioning from a struggling
market to one showing promise of considerable buoyancy in the near future.

Three months ago we reported the first signs of recovery across Greater Melbourne markets,
but our latest quarterly survey of sales activity has provided compelling evidence that
Melbourne is now coming back strongly.

The number of locations classified as rising markets has increased five-fold and recovering
markets have quadrupled, while plateau markets have halved and the number of declining
suburbs has dropped by 67 to just 9.

That’s quite a turnaround.