As we enter a new year and in fact a new property cycle it’s interesting to look back at 2019 and see what lessons we can take out of 2019 to make 2020 a better year in property.
And who better to discuss this with than Dr. Andrew Wilson, Australia’s leading housing economist and chief economist of my HousingMarket.com.au.
Watch as we share these 4 property takeaway’s from 2019:
If they listened to all the Negative Nelly’s and Property Pessimists at the beginning of 2019 property investors would have missed out on some great opportunities, particularly in the Sydney and Melbourne property markets.
What happened to all those predictions of 40% house price falls for the Australian property markets?
Lower interest rates, a miracle election result and looser lending criteria saw the property markets in our 2 biggest capital cities surge in the second half of 2019
This became clear as APRA tightened the lending screws on property investors from 2014 through till 2018 causing the biggest decline in our property markets in modern history.
Then when the banks’ lending criteria became more relaxed and interest rates fell in 2019 our housing markets rebounded strongly.
While the fundamentals of strong population growth and the wealth of our nation will underpin the Australian property markets, there is not one “Australian property market.”
Each State is at its own stage of its individual property cycle and within each State there are many markets segmented by geographic location, dwelling type and price point.
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Every year an unexpected X factor comes out of the blue to undo the best laid plans – some on the upside (like the miracle election result in mid 2019) and sometimes on the downside.
Sometimes these are local issues and at other times they come from overseas.
However over the long term our housing markets are driven by the fundamentals so don’t make 30 year property investment or home buying decisions based on the last 30 minutes of news.
The property market is not a get rich quick scheme, however those who own well located properties will benefit from the long term growth of their properties.
As Warren Buffet wisely said: “Wealth is the transfer of money from the impatient to the patient.”
Sure our property markets are improving, but correct property selection is even more important than ever, as only selected sectors of the market are likely to outperform.
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