My colleague Ben Fordham host of 2GB’s breakfast show wanted to talk about the fall in property prices and the collapsing clearance rates, but I couldn’t resist telling him about the good news in other markets i.e. the stock and foreign currency markets that underline a very important message for investors and wealth-builders.

I’ll share that with you later.

The AFR’s Michael Bleby says “Sydney’s auction clearance rate sank to 60.9 per cent as almost one-quarter of homes scheduled for auction last week were withdrawn, in a sign that rising borrowing costs and growing uncertainty are biting the east coast-dominated residential market.”

Clearance rates in NSW the week before fell from an early call of 69.7% and were even revised down to 63.7% and the latest is 60.9%.

This is clearly a market in trouble, especially when you look at this headline from the AFR only a year ago: “Every capital city hits 80 per cent clearance rate for the first time.”

And what about nearly a quarter of homes withdrawn from auctions in Sydney?

Sellers don’t want to get disappointed, but that’s what the RBA wants — scared consumers/buyers and worried sellers not getting high prices for goods, which includes property.

It’s back to the future with prices around pre-pandemic levels, and the big driver has been higher interest rates meaning borrowers are being given less from lenders because of repayment concerns.

The SMH’s Tawar Razaghi reports that “House values in almost two dozen suburbs, many in the inner west, have erased their pandemic gains, although units across Sydney have borne the brunt of the falls.”

Here’s the point: “Buyers looking in these areas may begin to find better opportunities, although it will be a tougher time for sellers and refinancers who bought in these locations two years ago on thin deposits, experts say,” Razaghi wrote.

And she’s right, as the table from CoreLogic for inner city Sydney houses shows.

Note this important point: suburbs’ price falls are different and it teaches you an important point about prices in markets. The big rising suburbs can be the big fallers when fear creeps in.

From that table, Birchgrove is a blue chip suburb like the CBA is a blue chip company, while Darlinghurst is more like a tech stock — edgy with potential, but it’s a less reliable investment in tough times.

Darlinghurst house values pulled back the most, falling 13.7% below their March 2020 levels to a median of $1,941,463 by October 2022, CoreLogic figures reveal, while Birchgrove is down only 6%.

The latest numbers also show how apartments prices have fallen more aggressively. By the time the RBA is done with interest rate rises, there’s going to be some great value for those looking for an apartment.

But as the property market dives, we’re starting to see signs that other markets are becoming more positive. The stock market is up 11% in just over a month and the Oz dollar is up 8% in exactly a month!

The change of sentiment comes as the US recorded a lower-than-expected inflation rate in October. This is making economists conclude that the Fed’s tough tightening of interest rates soon will ease up and even stop.

This has helped tech stocks spike over the last two days. On Saturday in The Switzer Report for investors, I pointed out that Amazon was up 17%, Meta 12%, Alphabet 10%, Apple 10% and Microsoft also 10% higher since Thursday.

Meanwhile, this has helped the Oz dollar, which is usually pumped up by rising interest rates and higher commodity prices. As the Yanks were raising rates faster than us, this was making many think a global recession was threatening, so it all took our dollar down.

There is positive stuff such as the inflation and interest rate scenarios out there, as US President Joe Biden meets China’s Xi Jinping. There are hopes something positive will come out of this get together. Meanwhile, news that China is easing up on its COVID lockdowns is good for Chinese growth and possibly cheaper goods, which have been driving up inflation.

Even though this rise in the stock market could be tested by another sell-off ahead of the next inflation number, you can see how markets can be so fickle, but the trend is something you can use to grow wealth.

Those who bought a good tech company called Audinate that I’ve talked about on my TV show at the lows and the scariest time for stocks, have made 60% since May 10! And if you’d gone for quality, such as the CBA on June 17 when it was $87, you’d be up 20% in less than five months!

The lesson? As Warren Buffett advised: “Be greedy when others are fearful and be fearful when others are greedy.”

Always shop for quality, even if you have to pay a higher price than lesser quality things. As a shopkeeper in Tuscany taught me a few years ago: “Buy the best and cry only once.”

And try and buy when others want to sell!