The most successful property investors in 2020 will be those who think small. For the past six years, including 2019, it’s all been about big: the two big cities, their boom, their downturn and their recovery.
Mercifully, 2020 will see the focus move elsewhere. Some of the smaller capital cities will capture attention and there will be increased awareness of regional areas, especially those with economic diversity and less reliance on agriculture.
While 2019 ended with the media obsessing over the size and speed of the recovery in Melbourne and Sydney, the apparent level of growth in the latter months of the year is unsustainable. It reflected a reaction to improved conditions in a climate of low supply – not to mention a media overreaction to shortterm data from one research source.
Forecasters have tipped Melbourne and Sydney to lead the nation on price growth in 2020, but most are simply predicting the recent past – extrapolating recent events into the future.
Indeed, some of the media commentary on big city prices late in 2019 was beyond rational, converting a shortterm rebound in some of the data into a national sensation.
A more sophisticated approach, which involves looking at underlying economic factors and leading indicators, suggests other places will rise from the pack in 2020, while conditions in Melbourne and Sydney settle down to generate a “normal” market.
Key factors driving markets
The federal election result in May was critical, because it removed the biggest brake on major markets – the fear of Labor’s tax policies. Then followed, in rapid succession, the APRA relaxation of lending criteria, tax cuts, measures to help first home buyers and interest rate reductions. Consumer sentiment about real estate improved and the tone of media coverage turned generally positive.
Diese Geschichte stammt aus der February 2020-Ausgabe von Money Magazine Australia.
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Diese Geschichte stammt aus der February 2020-Ausgabe von Money Magazine Australia.
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