Get Set For The Next Property Boom Right Now!

  • October 10, 2009

What are the tell tale signs of an up and coming Property Boom?

They are:

  • Demand is greater than supply.
  • Rents are high.
  • Population Growth.
  • Confidence in the property market.

At the moment Australia’s population is growing faster than it ever has since 1972. A lot of the population growth is immigration and with the government relaxing international home ownership laws we are seeing a huge increase in cashed up Mainland Chinese buyers especially in Melbourne and Sydney. So much so that Real Estate businesses are employing Cantonese speaking sales agents to meet demand. How about that!!

Check out this interesting view on Australian population growth and what it means:

Not only that, but the demand from first home owners and now investors is at an all time high. The supply of new land and homes is well behind the current demand. This gap will only get bigger over the next few years.

Rents as we know are also at an all time high, they have been increasing each and every year while in recent times Capital growth has gone sideways. If you listen to a lot of property experts including Business Coach Brad Sugars talk about picking growth trends they always say it is like a “Seesaw”  – when rents go sky high capital growth has to catch up and vice a versa. Right now rents are “sky high” so capital growth is about to catch up very quickly.

With interest rates low, the stock market all over the place, first home ownership incentives and the great Real Estate buys around at the moment confidence and some urgency is back in the Real Estate market.

All of these things at the moment add up to create a pressure bubble that can’t be stopped. Get ready for a steep rise in Real Estate starting in Sydney right now, if you watched the news tonight there was a headline that read “Real Estate continues to Boom in Sydney despite interest rate rise”. My opinion is that this would have already been happening in a huge way months ago if it were not for the GFC. The fact that the economy went south when it did meant that people got scared and were not sure what to do. The banks were just not lending as freely as before and that caused a bit of a stand off. But it was always just a matter of time. The latest releases in property through Belle and its affiliates indicate that the Sydney market has already started to rebound from the slump and is leading the charge out of the financial gloom.

Now with confidence back and although the banks are still being very careful with lending the market is set to Boom. Even with interest rates creeping up it won’t be enough to stop Real Estate demand. The RBA just put interest rates up 25 basis points. Ok so we aren’t cheering but we did know it was coming. The Reserve Bank will slowly raise interest rates in an attempt to manage affordability and slow the inevitable boom in the market.

Even a moderate rate rise WILL NOT stop a property boom as there are too many other factors driving the market.

I’m actually really excited about the massive growth the market is going to experience over the next 3 years. We are all going to make some incredible profits.

I listened to a report last night on the radio relating to comments from Glen Stevens, Governor of the RBA. The crux of this report was the Reserve Bank is concerned house prices are going to continue to rise due to an undersupply in housing and a large population increase on the way. Now property prices have generally risen for as long as the statistics on house prices go back. His concerns, however, are for a rapid increase.

So there it is, the experts agree that we are set for a large property Boom over the next 3 years. While people’s opinion will always differ (mainly our friends at the shares podium) the statistics are there to see and the demand is electric. It is hard to see prices not rising. If you have good cash flow and security, now is the time to find a good deal and buy. Don’t rush into it. You will make your money on the purchase, so do your research, make a lot of offers, keep emotion out of it and be patient.

To your Ultimate Lifestyle.

Aaron and Craig.

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