What is the State of the property market
There is a lot of speculation about the Australian property market at present. During the pandemic it was being reported that Property prices could fall by 20% and of course that was nonsense pushed by a media that has no idea. They now state that we are experiencing the biggest boom in history and many new companies are back to talking about over night wealth.
The truth and it is always an objective thing because short term markets are affected by different things.
As an example and let us look at just two.
In 2017 APRA (the banking regulator) decided that the property market in Australia were being driven by investors. Now anyone who deals in property knows this is a rubbish. The market is driven by owner occupiers.
However what APRA did was they changed the assessment rate to 7.5%. In other words, if the loan was 4% you were being assessed as if it was 7.5%. Plus, for many investors they had to look at principal and interest loans. The effect was a blanket was thrown over a booming market and it came to a standstill and the upper end fell.
When the Federal Government were re elected in May of 2019 some of the severe restrictions were lifted and the Property market started to recover. Then came Covid 19 and everything stopped or at least slowed down.
So where are we today? I believe we are seeing a catch up for what has not happened in the last three years. Today the market is close to where the peak was in late 2017 the median price at least in Melbourne at 1 million is at its highest ever point.
So, I think that the market will continue to rise at least for the next few years not at the same pace but fast enough to make it a great time to get into the market. There is no doubt in my mind that it will be more expensive in 6 months than it is today. However, investing is a long-term strategy and even in a strong market you need to look at 7 – 10 years.
However where you buy is also very important. We believe the strongest markets in Australia are Melbourne and Sydney. Many other markets look ok but we believe that has the best opportunity so sustained growth with an reasonable price point.
So, if you are already an investor consider this a great time to increase your portfolio and if not get a financial health check to see how you are positioned for retirement. If not, you may be flying blind.
Contact me today for a complimentary review.