Uncertainties in Australian Property Market

Investment in Property is a well known good gain deal as a long term investment option. History tells us that over time, property values always go up and investors who stay in the game for the long term always do well. Yes, there are periods of flat or falling values, but a risk taker can survive through with good patience and knowledge.

It’s a well observed fact that economic uncertainty and lack of political direction has seen people become more hesitant in the property market in Australia. The recent lead up to the federal election created a moment of surprise as people waited for some light to shine on the future of Australia.

If you think back over time, you will be able to point out various occasions of ups and down in Australian Property Investment Market including;

•    In 2008 when the Global Financial Crisis rocked the world many suggested property values in Australia were set to crash and we were all going to lose our jobs, but of course that never eventuated.
•     In 2004, the property markets in Sydney and Melbourne housing values stalled, due to high interest rates that peaked in late 2003 but what’s happened to property values in those cities since?
•    In 2000, there was a heap of negative press and worry about the impact of the GST that was being introduced in 2001. People said this new tax would destroy the housing market.
•    In the early nineties, when interest rates peaked and the markets crashed, everyone said it was the end of Australian property wealth and it would all be downhill from there. 

As you look back it becomes clear that there is a cyclical pattern to our property markets with the media and many clever and intelligent commentators offering lots of reasons not to invest. All these things apart, the truth is that we have periods of prosperity and periods of slow or negative growth in the housing market which will continue to be the case.

Despite all the doom and gloom we hear in the media about Australian economy and the property markets, things will not fall in a heap. The value of property in good locations will continue go increase in the future due to scarcity. All of those factors that are underpinning our already healthy economy – the resources and capital expenditure booms, strong employment and an influx of overseas dollars – will also have a positive impact on this type of property.

The more wealth is realized as a nation, the more prosperous consumers feel. And of course, as the perception of wealth and prosperity increases, so too does consumer confidence. In turn, we are more willing to buy goods – new cars, furniture, electrical items and yes, houses.