Things property investors can do to manage risk blog image

Will property growth be genuine or artificial this 2018?

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Growth, debt and illiquidity are relevant subjects this year for property investment. People are fixated by growth but the truth is, there are two types of growth. These are: genuine growth and artificial growth.

Genuine growth is often driven by a bigger sustainable market and an increase in productivity while artificial growth is driven by more debt in the economic system. Artificial growth can be bad especially if it is prolonged.

Debt, on the other hand, is consumption. It is assumed that when there is growth, consumption will continue. When many people buy illiquid assets, the price usually exponentially increases and the top could be difficult to call.

Meanwhile, the opposite applies when there isn’t enough demand for the supply and the market goes sour. This also applies to other investments such as real estate and cryptocurrencies.

Rules always change so it is important for property to grow and people need to continue borrowing. The outlook may not be wonderful forever despite us being brainwashed that it will be.

If you would like to know more about property investment, you can click here to know more about Chan & Naylor services. You can leave your details here and we can schedule you for a free consultation. We’ll contact you to explain more.

Whether you are a beginner, seasoned investor or business owner, our property and business tax accountants can give you guidance to maximise the financial areas of your life. We can also give you an integrated and tailored solution of your superannuation, taxation, property investment, asset protection, estate planning and more.

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Chan & Naylor Group has nationwide offices in Brisbane and Capalaba in Queensland, Melbourne and Moonee Ponds in Victoria, East Perth in Western Australia, and South West Sydney, Parramatta, Pymble, North Sydney, and Sydney in New South Wales.


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