Boom times can’t last forever, but this also doesn’t mean it’s the end of the world.
Sure, there will be a period of slowed growth, but this reflects the pricing correction period following a boom. History shows this pattern time and time again.
There are a number of key reasons why we won’t see major drops in house prices in our capital cities any time soon.
Our country has:
1. Strong population growth through immigration levels and natural population growth. According to the Australian Bureau of Statistics, our population just hit a staggering 24 million people as of today!
2. A healthy economy that, although slowing a touch, will continue to perform at a very high level.
3. A solid banking system with reasonable interest rates, tight lending practices and low default rate.
4. A rising in business confidence levels with a stable government at both Federal and State levels.
5. Rejuvenated consumer confidence since Malcolm Turnbull became Prime Minister.
6. A healthy level of household debt. Yes, we are borrowing more, but many Australians are saving more, taking on less credit card debt and paying off their mortgages faster. This means there’s more of a safety net in place if interest rates suddenly rise or the economy slows.
7. A culture of home ownership. The great Australian dream is still alive and well with seventy per cent of us owning or paying off our homes.
So what does this all mean?
There is still a large demand for housing, people still need a place to live! If they can’t afford to buy their homes, they are going to rent, forcing rental returns up.
As the old saying goes “Buy your straw hats in winter” – take advantage of the market slowdown and low interest rates to put yourself in a stronger financial position.
Contact Naked Real Estate today to find your next investment property.