Despite what you hear on the news and read in newspapers, the property market is not going to crash and take your livelihood spiraling down with it. There is a debate in full swing about whether houses are ‘unaffordable’ and the affects this will have. Houses are unaffordable to some people but they are still affordable to others. The market is being more affected by the media scaring investors than by any other elements.
It is important to become one of the home owners because this will enable you to reap the benefits of being on the right side of the fence. Make a wise investment by researching property values and assessing potential options with property valuation software. But it is certain that you need to enter the property ladder before housing becomes unaffordable for you. To demonstrate that this is a safe investment, this article will provide you with 7 reasons why the property market is not going to crash any time soon.
- Australia has a very strong population growth pattern. This is mainly fueled by immigration but backed up by general population expansion. Immigration levels are not at their previous high but there is still a large pattern of growth in the Australian population. Population growth means that there is more demand for housing and the demand is currently greater than the supply. The result of this is rising house prices and growth in your investment property value.
- Australia has a remarkably strong economy which is envied by many of the major economic powers at present. The boom in mining trade with Asia has made Australia one of the strongest trading nations in the world. As it continues, jobs will be created for individuals, preventing a high level of unemployment and creating wealth with which to build and buy houses.
- The banking system in Australia is very strong. Australian banks managed to survive the global financial crisis relatively unscathed. This strong banking system has allowed for the continuation of lending with reasonable interest rates. Whilst getting a loan in much of the Western world is currently difficult, it remains relatively easy in Australia.
- There is a shortage of properties in certain areas of the country. Areas of Sydney have become a completely owner dominated market with tenants ‘knocking on the door’ continuously. This means rent will rise, as will the price of properties.
- There have been recent rises in the cost of construction. What this means is that the development companies will struggle to raise the capital to erect new houses. Thus, the demand will continue and push house prices further upwards.
- There is a manageable level of household debt. Australians have become wise to the benefits of avoiding credit card debts and paying off mortgages as fast as possible. This allows for a stable level of debt which makes it less possible for a crisis to be caused by a rise in interest rates.
- There is an internationally high level of home ownership in Australia. At present 70% of Australians own their own homes and have a smaller level of debt than most countries in the Western world.
It is important to recognize that there is no single ‘Australian property market’ which can rise or fall. There are different areas which are performing differently so when you are buying a property it is important to consider the behavior of the area in which you are investing. Property remains a safe investment which will enable you to accrue both assets and wealth with a good rate of return.
