Is now the time for Fear? Or for Greed?

Is now the time for Fear? Or for Greed?

Should you be fearful or aggressive when it comes to real estate at the moment?

 

Considering the different events happening in the country right now, many investors are wondering about whether it is the right time to take actions in the property market. With the COVID-19 still around, as well as the high unemployment rate, should you truly be aggressive or remain wary instead?

 

“I’ll tell you how to become rich… Be fearful when others are greedy and be greedy when others are fearful.”

— Warren Buffet

Here’s why we think you should go for it.

 

First, we’re officially out of recession, and what’s more is that we already know that it is neither a recession nor a pandemic can decimate our economy or our property market for that matter. In fact, we can even overlook the rising unemployment, for falling interest rates plays a much bigger role in this picture. Just look back over the few years when property values languished due to the restrictions in borrowing, caused by the Haynes Royal Commission into the Banking Industry. That is why with the anticipated new regulations on loosening of restrictions on banks’ lending practices this coming March, several property buyers and investors will be able to borrow significantly more money. In addition to that, a heavy dose of positive factors are coming to our property markets, which will definitely boost the coming years:

 

  • With the economy developing, consumer and buyer confidence rises, which can lead to further spending and employment.
  • Aside from that, the guarantee of interest rates remaining low for the next 3 years (at least), will also give confidence to both home  buyers and investors.
  • There are an increasing number of buyers and sellers, not to mention transaction numbers,  in the property market now.
  • Auction clearance rates around Australia have been constantly strong in the latter months of 2020.
  • Lastly, banks, which are keen to write new business, have now falling loan deferrals.

Having said that, we can safely assume that our property values are guaranteed to increase in the long term.

 

More than that, there are numerous predictions stating that our population could reach 30 million people by 2030 and even 40 million people by 2050. This only means that our population will significantly grow at a rate faster than almost every other developed nation, which could bring positive news for the long-term growth of property prices and the economy’s wealth. Why do we say this? Well, until recently, 55% of our population was due to immigration and, in general, these are people whose ages range from 20 and 30– which we all know to be the ideal ages to start a family. Now, with these new residents coming in, revenues raised from income taxes and all the goods and services they will buy will most likely be an advantage to the economy’s well being, and yes, that includes properties.

 

Supply and demand. 

 

The more people who want to live in major cities and suburbs would mean the more demand for well-located properties. Certainly, this is a great opportunity for investors to push up the value of their properties. Though some would not be able to spend too much, there are still many who can definitely afford these higher priced properties.

 

In summary, Australia may have experienced recession in 2020 or other economical concerns due to coronavirus, BUT that is all over now! The country is back on track and with the continuous positive news we are hearing every now and then, the likelihood of Australia growing stronger over the coming years is very high!

So, what should you do? Will you risk NOT investing in property?

 

With so many mixed opinions about the real estate market, it is difficult to know who to trust and listen to. Here at Reval, we are at the coalface of the property market, and offer this advice based on our customers’ needs, desires, expectations and the market forces we see daily. Which leads us to say with confidence, that outlook for the real estate market has rarely looked this positive!