National dwelling values decreased again in September, marking 12 consecutive months of falling values. The result firmly marks the end of the boom in the Australian housing market and what may be a prolonged housing price correction.

The correction has largely been driven by Sydney and Melbourne, where the vast majority of Australia’s property value lies.

Once again, the extent of the correction has been overstated and is being continually exaggerated by certain media outlets. As an example, while values have dropped by 6.1% in Sydney over the last 12 months, they achieved remarkable double digit growth in many years preceding this period. While people who bought over the last year will certainly not be overly happy with where values are, a large pool of owners are still sitting on large capital gains.

On top of this, we’re still seeing a situation where there remains ‘markets within markets’ in Australia. Over the last 12 months, Brisbane, Adelaide, Hobart and Canberra, achieved capital gains over the period in question.

The current price correction is a result of the low interest rate environment that the nation has experienced, and continues to do so.  When the RBA cut rates to encourage economic growth, the Australian market witnessed a buying frenzy, with house prices rising much more than they should have, in my opinion.

During this period, certain parties did everything they could to limit foreign investment, despite the fact that this inbound capital was driving the large construction booms we saw in many markets.  As I said at the time, the problem with this approach is that if you’re not accommodating to foreign investors, they may not be there when you really need them. This scenario appears to be playing out at present.

While I do not believe the correction is as bad as many parties are trying to make out, it is happening, and there will be some winners from this movement in prices.

First home buyers may now have many more opportunities to enter the market than they did in the past. Prices are more affordable in many markets and there is likely less competition for properties.

Property prices in many areas of Western Australia, South Australia and even Brisbane look quite attractive to me. Property investment is a long-term game and I suspect there could be many long-term winners from savvy investments into these markets.

Eventually, as typically happens with free markets, prices reach a low point, where they suddenly become extremely attractive to investors and buyers. Where that point lies is always difficult to tell but prices will eventually stabilize, and then recover.

In the end, I firmly believe that Australia is a wonderful investment destination with a strong economy and great prospects for the future. The housing price correction that we are seeing will present some great buying opportunities for those who believe in the future of Australia and the wealth that can be generated out of its property market