I see a lot of people walk through the door every day, all knowing they want to achieve a better life and financial position. All have goals that come in different shapes and sizes and ultimately have different aspects of life that they want to excel in.
It’s often true that the squeakiest wheel gets the most oil, and those who make the most noise will often receive the most attention. The same can be said for investors. An unfortunate truth is that when one investor experiences a negative result, they more than likely will voice their negative opinion, leading others to expect that they are in the same boat. This effect is ringing true throughout our market at the moment. Media headlines about shonky building quality, subjective valuations from lenders and even generalised market commentary are all petrifying investors into the idea that they are holding onto ticking time bombs.
Exaggerated claims of detrimental market movements have been ringing through our airways for the last 24 months. Since our natural market correction in mid 2017, major household media influencers have rung the property bubble bell once again, urging many around the country to call for concern. I wanted to take a couple of minutes to look back and explain why recent housing performance is normal and a part of our nation’s natural economy. The reality is that recent results from our housing market are far from unique. Fundamentals remain strong opportunity for investment perpetuates.
Investors are beginning to inject themselves back into our property market as our market begins to recalibrate post-election. Data shows that buyers are looking again at the residential market as a viable option and making plans with their lenders for finance.
Let me run you through a scenario. Imagine heading to a dealership to buy a new car. The dealer offers you a price on a car that you love of $50,000 and leaves to prepare paperwork. He is replaced by a new “automotive professional” who tell you that the same car is now worth $55,000. A third appears to tell you that the car has been oversold and is actually worth $45,000. All of them know the car well and seemingly have the same motivation to help you buy the car.
Property investment is a common topic around the water cooler throughout Australia, but an important aspect often overlooked, or frequently misunderstood is the concept of land tax. Surprisingly, land tax can be a factor that ruins an investors cashflow if not accounted for properly. Although your investment strategy should not be based solely around tax, it should be understood before you pull the trigger on a major investment.
Declining property prices and shrinking investor demand over the last 24 months has seen the Sydney lose its mantle as the country’s Blue-Chip investment. Volatility has left Sydneysiders with a number of property related questions hanging over their heads. Doubts about finance and lending, and the general direction of the market have left locals marred with confusion about their next steps in the market.
The country is outgrowing expectations and there is no sign of slowing down. Over the past 8 years our population growth rate has ranged from 1.49% to 1.67%, equating to almost 400,000 additional residents to the population each year. It was only mid-2018 when Australia’s population surpassed 25 million, a milestone met 33 years before expectations – now we are likely to hit 26 million within the next 18 months.
We have all read articles recently that have focused on the integrity of density building in our lucky country. Last night’s episode on Four Corners was just another. We don’t normally like to give weight to the sensationalism in these stories, but as a lot of our clients have invested in apartments, we feel the need to add some commentary.
We regularly get questions about interstate markets and why they aren’t approved by our model for investment. With volatile performance impacting the appeal of select few housing markets throughout Australia, many current questions are based around the relatively dormant Adelaide housing market. This week, I want to highlight that while the city of churches may be one of the most beautiful places to live in the country, it may not be beneficial to investors over the long term.