I agree with stocko's general sentiment, I agree with woddonee's 'the trend always last longer' view, and I sort of agree with Andrew's immediate optimism - in some segments.
I've told the story before: I purchased a package of properties in the Latrobe Valley (regional Victoria) at the beginning of July 2002. I advertised them for sale in October, and averaged 28% capital appreciation. Settlement is this coming Monday.
I contacted the agent a few weeks back, and similar properties are not selling now for the prices I sold for. They have been on the market for some time, and no-one is buying. I told him to call me in 12 - 18 months.
The article talks about a massive apartment surplus in Melbourne. I accept that this only represents one segment of the property market, however it is primarily the investment end that drives apartment development, which is also driving houses and units. The trend is there, and the market is either stagnating or declining.
Whether I exited the property market too early will remain to be seen in the short term. The market usually stagnates for a period preceding decline.
I will however make sure, that when property prices decline anywhere between 25 and 40% (in some cases), that I will have my cash deployed to pick up some long term bargains.
This may not happen for maybe 12 - 24 months, or even longer.
