It was announced last September that we were officially in a recession, and just as fast as we were in one, we are out of one and into a property boom!
Are you keeping up? It’s hard enough to keep up to date with everything in business such as JobKeeper and the Government announcements, aside from things like the property market and overall economy.
How amazing is it though? The resilience of the Australian people to keep moving forward when faced with such adversity. In fact it’s typical.
Some see our “No worries mate” attitude as being too laid back, or not caring when in fact it actually means “whatever happens – we will make it through”. And we have certainly done that.
It seems our friends at the Commonwealth Bank have predicted housing prices to rise by up to 15% over the next 2 years. Along with other Banks and interest groups saying the same thing, it does look like a strong time ahead in the property market.
So what does this mean for you?
Those with property
Firstly, it should add stability at the very minimum onto your asset base. You can breathe a little easier knowing that at least your property should do well over the next couple of years. You’ll build some quick equity that you can use as a buffer against any further hiccups, or you can use the equity to make further property acquisitions.
Secondly, is it time to look for an investment property to purchase and hopefully ride those gains? I’d probably move fast if that was the case. But I also wouldn’t do it on a whim. Seeking the right team to guide you is crucial to your success. You don’t need to go it alone.
For those without property, who want property
Living life and saving for your first home can be hard at the best of times, but in a rising property market it not only makes it hard, but also extremely frustrating. This is because you will feel you are always chasing something that just keeps moving ahead of you. It doesn’t have to be like that. There are a lot of government initiatives and even lender policies that help first time buyers get into the market…
- Government First Home Buyer Grants
- First Home Buyer Deposit Scheme – The Federal Government covers 15% of your 20% deposit, meaning you only need to contribute 5% plus costs
- You can leverage a family home such as your parents or other relatives and use the equity to help with the deposit
This may seem a little overwhelming, however it’s just that you may not be privy to the details around it. But we are, so if you have any questions around this give Ben at HTA Finance a call!
What does this mean for the broader economy and jobs? Well we still have a massive housing shortage in Australia. Even with Covid-19 and restrictions on movement (immigration) into our country, there is still a massive need for new homes. And while this holds true, the economy will generally rise along with property. This is because approximately 70% of the wealth in Australia is held in property. But also imagine all of the additional infrastructure and consumer goods needed to fill the new homes as well. The list goes on and on, and so does the number of jobs this creates.
Will the global economy affect Australia?
Of course. It always does, however our size gives us a “nimbleness” that other countries envy. We are large enough to matter, yet small enough to weather outside storms. We have proven this time and time again through recessions, the GFC and now Covid-19.
Having said that we cannot know what the future holds for us, but we do know at this moment we are in a great position to move forward. Record infrastructure spending is generating new jobs and circulating more money through the economy. Interest rates remain at record lows and most investment properties are cash-flow positive at this point in time.
So if you’re thinking about purchasing your first property or a second as an investment, give HTA Finance a call and we can discuss if the timing is right for you.