Happy Australia Day everyone !
Today is as good a day as any to share this infographic by Deloitte Access Economics on the Australia’s recovery forecast.
What does this mean for property?
It is becoming increasingly challenging to forecast anything with any accuracy given the enormous amount of stimulus and continued obsession the Australian government has for ensuring that the property market never fails.
I will keep a keen eye on the trends for wage increases, unemployment, migration and population recovery and inflation.
The debt-binge we are on , particularly as it pertains to residential property, means it would be wise to take note of the “increased power” of interest rates
It wouldn’t take much upward movement in basis points to put enormous strain on affordability and increase levels of mortgage stress.
We haven’t seen wage increases in Australia, nor anywhere else for that matter, in decades and might not see it for it some time to come as a result of COVID.
According to Deloitte’s infographic , unemployment will only drop below 6% in 2023.
Therefore, it is tough not to easily give in to the idea that the property market is in “bubble” being inflated by loose lending policies, incredibly generous home buyer/ home builder incentives, lower interest rates and more.
Even with the vaccine rollouts and countries slowly opening back up , I don’t see how we can sustain today’s insane trend in the property market.
I have been surprised before however, and am keenly anticipating what the government has in store for us in the way of “stimulus” in 2021 and beyond.
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