The Real Estate World is continually undergoing change. Nothing is permanent and there will always be a constant state of transition.
So how do we keep up? Answer: We look to those who have insight.
This is particularly true in the financial industry where the market is unpredictable and learning how to properly navigate is an uphill climb.
We spoke to expert Mario Bertone who discussed with us what he predicts the Australian Property Market will look like in the coming years.
The Australian property market before
Predictions have been going around that the property market is about to cool off in the near future. However, as Mario points out, history shows that the market has never actually gone down. It has fluctuated quite a bit, but prices have never gone down and have actually been steadily increasing.
It is inevitable that there will be drops and conversely rises; and the market will always correct itself at various levels.
The Australian property market now
The state of the Property market can be affected by a number of factors including elections and budgets. However, these factors do not impact the prices themselves, but the behaviour of the people who sell property.
Regardless of demographic, political or economic influences, the market balances itself out eventually.
To get real, valuable insight into what is going on in the property market, is the people’s sentiment that ultimately tells you how things really are.
Consumer sentiment is simply how confident the average person is feeling about a set of circumstances; in this case the Property Market. If consumers are confident about the Property Market, they are more likely to invest, and vice versa.
The Australian property market over the next five years
With Generation Y beginning to grow more financially conscious and savvy, we are expecting the largest transfer of wealth in history. This has the potential to have a big impact on the real estate market in Australia, but it may take a while.
There has to be a change of perspective from the investors themselves – there has to be a balance between having fun and establishing security. There is a need for Generation Y to be educated on being smart about their finances.
Even with migration and the transfer of wealth to the Generation Y, property prices will stabilise and will not drop – keeping the market value of properties stable.
In fact, there are only one or two suburbs in every Australian state where prices have never dropped. This shows us that there is always a steady increase, as in a graph, of property prices. As Mario emphasises, the property market always stabilises itself.
While there may not be large amounts of increase per year, your returns are compounding as the years pass. Property is a long-term commitment and is the best, and safest, investment if you’re smart about it.
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