Untested risk tolerance is driving a lot of property decisions right now
If you have never held a property through a decline that took years to reverse, your risk tolerance has never actually been tested. It's an assumption you're carrying, not something you know about yourself. That gap is shaping a lot of choices right now.
Buyers who came through the 2017 to 2019 correction across Sydney and Melbourne already sat this test once. Prices fell, stayed down, and took years to recover in some pockets. They found out under real conditions what they could stomach.
Buyers who started after that mostly know a different market. Low rates, easy credit, quick recoveries whenever prices dipped. That's simply the environment they learned in, and it means their tolerance for a real downturn has never had to hold under pressure.
That gap changes how the current coverage lands. Without a prior down-cycle to measure against, three rate rises or a shift in tax policy doesn't read as a normal part of a longer cycle. It reads as proof the whole thing is breaking. Makes sense, given what these buyers have to go on. But it means the decision on the table isn't really a response to the market. It's a response to how the market is being written about.
Worth being precise here. In January 1990, the cash rate sat at 17.5 per cent. Two years later it had been cut by more than half. That's a fact about 1990. It isn't a prediction about now, since every cycle has its own causes and runs its own length. What the 1990 example actually shows is that the commentary at the time didn't describe what happened next.