CHALLENGING TIMES
Challenging times always bring property into focus and now is no different as external factors have continuing ramifications on our share market and both business and consumer confidence. It seems clear that the last 3 years have seen Australian families pay down debt and squirrel away savings which have seen near 6 fold increase in cash holdings over the same period of time. So there is a lot of capital out there that will be looking for a home when confidence returns.
In the meantime, we see those that purchase and hold properties for its long term value face no short term stress in this market, whereas those that have seen property as a shorter term trade are finding the winds of change in the market harder to deal with.
Every market brings opportunity and we continue to see situational opportunities for long term property investors and people looking to upgrade and or downsize in this market. Fundamentals are still strong and the future looks very secure particularly in Western Australia – we are an emerging oil and gas province in the world sense as well as this we have our mining and our agricultural commodity prices are escalating which is bringing our farm sector back into the money. So the prudent investor/buyer should look forward 5 years and position themselves NOW!
Interest rates have stabilised and may soon switch to a downward movement, so don’t fix your mortgages – stay variable. I am reminded of what is most profitable for the banks is usually advertised on the front window of the bank – so at the moment they are telling you to fix the rate and our advice is to do the obvious – this will be profitable for you and NOT the bank.
Stock levels are plentiful for buyers so take advice but you can pick up some great buys particularly in the premium land market which has been affected by the lack of capital available for new home builds.
Rental yields are likely to increase and this is benefitted by the down ward pressure on prices and the upward pressure on rents by seasonal restrictions to supply.
All in all it’s a very interesting time in property right now, as one of Perth’s longest established Real Estate Practices we have seen all the cycles and it costs you nothing to benefit from our experience.
Call us now we want to be your partner in property.
Chris Shellabear – Principal
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