At the start of a new year, forecasters come out of hibernation with all of their predictions for what’s ahead of us.
Property investors always want to know what’s going to happen in the future, but when you look at their predictions in the past, their track record leaves much to be desired.
Should you really pay attention to forecasts?
I’ll discuss that in today's episode with Brett Warren, National Director of Metropole Property Strategists.
While we’re at it, I want to make 10 forecasts for the decade ahead and also talk about 10 things that will remain the same in property.
Forecasts can help us to feel more secure and less anxious by illuminating a path forward.
People prefer certainty over ambiguity, so it’s not surprising that we’re interested in the predictions for the year ahead.
However, a quick look back at recent history shows us all the times that the experts have gotten it wrong.
That means that we have to recognize that the future is unpredictable and that at best, they’re hit and miss.
However, there are trends and patterns that can be seen when looking over the long-term history, and the long game is the important thing in property investment.
So don’t get distracted by clickbait and headlines. Instead, keep your eye on the longer-term goals.
- Australia’s population will continue to grow
- The roads are going to become more congested
- Property prices will keep rising
- We'll require about 240,000 new dwellings every year, a target we’re falling short of
- The property cycle of growth, stabilization, and correction, will continue
- Homeownership will remain important to Australians
- Australians trying to secure their financial future will continue to look to property investment as a reliable avenue
- Pessimists will continue to predict property market crashes
- Naïve investors will still be at risk of being taken advantage of by property spruikers and get-rich-quick artists
- We will still live in the best country in the world at the best time in history
- The period of low-interest rates is over, and we’ll experience a period of high-interest rates
- Rents will increase strongly
- Due to higher costs of living and difficulty saving a deposit, home ownership will decrease
- Multi-generational living will become more common due to both affordability and migration
- An older population will also lead to an increase in singles or couples living alone
- Apartment living and mixed-use development will increase due to greater urbanization
- Many jobs will disappear, either offshore or due to artificial intelligence
- Most baby boomers will retire, and Gen Xers will begin moving into retirement age
- New tribes will develop as demographics continue to drive the market
- New technologies will develop and be adopted, including technologies that advance property investment as well as the potential to become a cashless society.
It’s likely that Australia will look extremely different in 10 years’ time.
However, it will remain the best place in the world to live and a desirable destination for migrants.
Links and Resources:
Brett Warren – National Director Metropole Property Strategists
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Some of our favorite quotes from the show:
“There's a big difference between an expectation and a forecast. An expectation is an acknowledgment of how things are going to work, how they've worked in the past, what's likely to happen in the future, while a forecast is putting a time frame on it.” – Michael Yardney
“But in Australia, there's hundreds of thousands of migrants coming here and they've come here partly because of the better lifestyle, partly because of job opportunities, but also, I think, they come with aspiration, wanting to own a home.” – Michael Yardney
“Now's the time to adjust my daily program to take me to where I want to go. So, the key is to start right now by making the change, to walk along this new road in this new year.” – Michael Yardney
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