I know it can be difficult in a market where property prices in Sydney and Melbourne are going backwards, to see things as they really are.
Seeing the bigger picture can be difficult for the average Australian who’s education comes from the media. But, those of us who know our history we have seen this all before.
STOP BUYING THE HYPE
The Australian property market is not going to collapse.
History suggests that we are in, or are entering, a mid-cycle event that has occurred fairly consistency in America and the UK for the last 200 years. It is not something to be concerned about, unless you have big money in the stock market.
It’s important to remember as investors we only get one or two buying opportunities every 18 years. The next 18 – 24 months represents one of them.
The same people that were selling a property BOOM 12 months ago are now selling a property BUST.
Here are the negative and positive aspects of the Australian property market and economy.
12 reasons why the Australian property market might BOOM
– History shows us that prices should be declining in Sydney and Melbourne right now.
– Strong long term performance in Oz, USA and Europe.
2. Australia’s population growth is still strong.
3. The future looks bright – the Australian government forecasts a population of 60 million people. More demand can only drive prices up.
4. Investors only make up 30% of the Australian market.
5. Government debt is low.
6. Out side of Sydney and Melbourne property prices are affordable.
7. We have strong job growth.
8. We have strong infrastructure spending and a huge number of projects in the pipeline.
9. The Australian economy is strong – resources, tourism, construction, infrastructure, financial services.
10. Stage of cycle does not support a huge decline in property prices.
11. If investors take a long term approach what happens year-to-year doesn’t matter.
12. Investors need the right strategy – buying and hoping is no longer an option.
11 reasons why the Australian property market might BUST
1. Sydney and Melbourne are ‘cooked’. The markets have topped out and there is no more house prices growth.
2. Prices in Sydney and Melbourne will continue to decline.
3. High household debt.
4. Low interest rates.
5. Australia has an upcoming election. Aussies generally like to sit on their hands and combined with already low prices, this could have a further weakening effect.
6. Immigration has been the lifeline of Australian property meaning any proposed changes to immigration levels will dampen our already weak market.
7. A lot of homes will go from interest only to principle & interest loans in the next 3 years.
8. China is slowing down. Australia is reliant on China from a trade perspective and any downturn in their economy directly affects our own.
9. FEAR. No one has a crystal ball to predict the future, and combined with recent volatility, Aussies are scared. For those that really understand the market, this could present a positive opportunity.
10. Investors can’t seperate whats happening in Sydney and Melbourne with whats happening in the rest of Australia right now.
11. The Royal Banking Commission is restricting potential for property market growth.
Ben Everingham runs a highly experienced buyers agents based in Queensland, which is registered with the REIQ. Over the last 8 years Ben has bought over $8 million dollars worth of investment property and now lives on the Sunshine Coast with his family. Ben and the team at Pumped On Property have supported their clients to buy over $130,000,000 worth of investment property over the last three years.
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