Property Investment Articles

Is property about to take a nose dive?

I wanted to share with you guys today is a little bit of an insight into what’s been happening in the Australian property market, relative to what’s happened in the past. This is actually a great graph put out by Morgan Stanley about the Australian property market, and I guess the first thing that you can see is that Australia is no stranger to dips or drops in the property market. In fact, if you look back over the last 40 years, there are six times where the … I’m just counting, one, two, three, four, five, six … where the market has declined more than, say, 5%. In particular, I would draw your attention to, you can see around June of 1985, the point in time where negative gearing was removed by the government, you can see the further drop in the real estate market, and then you can see the green triangle where it’s actually been reintroduced.

I guess the points that I want to make in terms of people who are contemplating investing and have major concerns around a bubble or anything like that is that, first of all, for the market to fall significantly, say for example in the vicinity of, say, 12%, you would need to see one of three major things happening, being, first of all, a major drop in the level of population growth, the second thing would be a hike in interest rates, and then the third thing would be a rise, or a significant rise, in unemployment.

Now, the government is certainly a hell of a lot more tuned into those levers now than they may have been in the past, so there’s a lot of awareness around policy making which may cause any of those three things to get out of kilter. As you can see right now, we have been … and obviously this graph doesn’t extend as far as 2018 … but we’ve definitely been through a boom period over the last five to seven years in Australia, mostly driven by the two major capitals.

But I guess the reassuring thing I would say right now, is the fact that our housing market is probably the single biggest asset that Australians hold, worth in the vicinity of $7 trillion, and what that actually means is that it’s highly unlikely that the government are going to do anything which significantly rocks the boat. The great news about that is that, as an investor, sure, definitely we are likely to see a winter period coming up, and there’s all sorts of precautionary and strategic things that you can do to protect yourself during that phase, but in general, what I’m trying to highlight here is that things like the 60 Minute report that came out a few weeks ago, predicting a 40% drop in the price of real estate, just seems like hype to me, seems unrealistic.

I’ve been studying the economic arguments around different things for many years, and it’s really apparent that every year for the last 15 years, I’m reading reports, especially in early January, which talk about a potential crash in the property market and a property bubble, and none of those things have come to fruition in the last 15 years, in any enormity.

Anyway, I hope you found that useful. Love to hear any feedback that any of you have got, or any agreement or disagreement about this, but, yeah, I look forward to connecting with you next time.

P.S. – Whenever you’re ready, here are 4 ways I can help you grow your wealth.

1. Fast Track - If you are ready to accelerate your investing results and get help with a personalised plan, then find a time in my calendar and let's get you started. Book Now.

2. Nearly Ready - Jump onto our next webinar and go deeper into some new frameworks that open up the world of alternative property investing and understand how to amplify your investing results. Register Here.

3. Not quite ready - Jump into our private Facebook group and become part of our community of investors who want information and insights into how to fast-track their property investing. Join Us.

4. Want more info - Grab part of my amazon best-selling book 'The Freedom Warrior'. It's the roadmap to getting accelerated results with your investing in the shortest possible time. Grab A Copy.

Related Posts

Are Mortgage Brokers Going to Leave the Industry?

I couldn't believe it when a good friend of mine that is a finance broker said he was thinking of a change of career. He's been a finance broker for many years and he's a guy that really cares about his clients. He has weathered many storms in his industry, but he's...

read more

Should You Buy Commercial Property?

Commercial property is the flavour of the property world this year. Everyone is conscious of the limitations of residential right now, so many people are trying to pivot and look for another way forward. This short video explains 3 things to consider before jumping...

read more

As Trusted By

LET’S CHAT

Call Us

(+61) 2 6100 3688

Email Us

Address

7 MacPherson St O'Connor ACT 2602 Australia

PO Box 6049 O'Connor ACT 2602

Business Hours

Monday - Friday 9:00 AM - 5:00 PM

GET IN TOUCH

  • This field is for validation purposes and should be left unchanged.