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Australian Property Market: A Five-Year Forecast

The world around us is undergoing major changes, including the market. Nothing is permanent and we are all in a constant state of transition. How do we keep up? We look to those who have insight. This is particularly true in the financial industry where the market is unpredictable and learning how to navigate it is an uphill climb. Here, our guest expert Mario Bertone will discuss with us his stance on the Australian property market behaviour and what he predicts it 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. That is, it did fluctuate quite a bit, but prices never went down and have actually been steadily increasing. This only proves that although there will be inevitable drops and hikes in prices, the market always corrects itself at various levels.

The Australian property market now

As we can observe, the market may be shaky, which can be caused by a lot of factors including elections and budgets. These factors impact not 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, professionals might not be the best people to get information from. Professionals and experts are at a place where they must speculate because that is their job, after all. But, according to our guest, it is the people’s sentiment that ultimately tells you how things really are.

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 of affecting 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, the 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 our guest emphasises repeatedly, 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.