To battle the ongoing pessimism of some property investors regarding the current state of the Australian property market, here are some great reasons to be thankful for despite the downturn.
Excess in budget
In spite of the $350 billion of sovereign debt that the government has accumulated in the 2018-2019 financial year, Australia’s financial circumstances are actually in pretty good shape than it has been in perhaps more than 10 years. This excess in the budget can mean that the government has a greater capability to fund national infrastructure projects and key services.
This can also be beneficial for property investors at a national level as the biggest impact on the Australian property market, or any property market, is economics. As property investor and head of research at Propertyology, Simon Pressley, states, “So, if our national economy is better in 2019 than any size of [the] last 10 years … the outlook for our property market is better than what it has been for a long time.”
More jobs are being created
For the first time in our history, the country has experienced two consecutive years where more than 300,000 jobs were created each year. 200,000 of those employments were created outside of the big capital cities, and because of this, these regions have improved and their markets becoming stronger.
Along with job creation in these regional areas, it is most likely that property market booms will occur as new towns and cities can start to flourish. Therefore, they can become beneficial investment locations since as population increases, so will the demand for property.
Supply for housing is limited
Since supply for housing is limited, rent prices have increased, which in turn is beneficial for property owners and managers. Vacancy rates have been decreasing, particularly in regional areas outside the main capital cities.
Oftentimes, property developers dictate supply, but presently, it’s been difficult for large developers to get funding. Property specialists believe that housing supply is likely to stay tight for some time. Mr Pressley adds, “We’re going to see not just tight housing supply, which puts pressure on prices, but we’re also going to see rents trending up, possibly more than what we’ve seen for a decade.”
These are just a few factors as to why things are still looking favourable for Australia and property investors despite the downturn. With a strong economy comes better investment opportunities and property price growth.
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