It pays to be cautious when dealing with the property market as values in some locations are predicted to fall behind inflation over the next three years. In addition, one in seven property markets in Australia will likely contract between now and 2022, according to an analysis by new proptech platform Sell or Hold.

Given the uncertain condition of the property market, Head of Research Jeremy Sheppard highlighted the importance of knowing when to sell or hold. Property owners and investors have gotten used to a “buy and never sell” mentality, which can ultimately cost them money, he said.

“The research showed that nearly 860 markets in the nation are on track to post price falls over the next three years, with a mix of capital city and regional suburbs in the results, and with oversupply being just one part of the story. While every owner or investor needs to understand their unique financial circumstances before making a decision about whether to sell or hold, this data shows us that blindly waiting for a market upturn might not be the smartest financial decision,” Sheppard said.

The study also revealed that about 40% of Western Australia’s property markets are classified as bad. This is followed by the Northern Territory, with 39% of its markets falling under the same category.

Markets in Queensland (17.6%) and New South Wales (13.2%) were also projected to slide over the next three years.

“We chose the baseline comparison against inflation to show that dwellings in these markets aren’t worth holding for growth reasons because they will be worth less than they are today in real dollar terms, which means that some people might be better off to sell so they can take advantage of opportunities in other markets,” Sheppard said.

Sheppard stressed, though, that while the data forecasted price drops in specific dwellings in these locations, there are still hundreds of markets where prices are set to rise over the same time period.

The key to success? Understanding whether it makes more sense to hold or sell.

Identifying bottom markets

The dwelling type and suburb tipped to fall the most in value were houses in Blackwater in western Queensland, with prices likely to decline by 5.2%.

Vineyard at the Blacktown region of Sydney, meanwhile, was named the second-worst market. House prices were forecasted to slide by 3.7% over a three-year period.

Houses in Leppington and units in Villawood in Sydney are also expected to fall in price over the same period.

Houses in Perth’s Cockburn Central also joined the list, as these are expected to fall 3% over the time period.

“I know it’s not popular to predict bad property markets, but at the end of the day, property owners and investors must be aware that there are some markets that will languish for years, so it may be futile holding on for better days,” Sheppard said.