2020 didn’t exactly turn out the way I or anyone expected at the beginning of the year.
Just as the bushfires were receding, we started to learn about this virus in China that eventually made its way to our shores.
The pandemic caused massive health issues in Australia and around the world. Many countries, including ours, have had two waves of Coronavirus.
It kept many of us confined to our homes, it shut down major parts of our economy, and many major economies have seen falls of the GDP of 10% to 20%.
Australia did pretty well, comparatively, but we also saw a surge in our unemployment, and we saw inflation plunge. But we got through it much faster than most expected, and while we’re officially out of the recession, we’re not out of the woods just yet.
So today, I’d like to discuss some lessons from last year and see how they’re going to affect our economy and property markets this year with leading commentator Pete Wargent.
- The world economy is going to look very different moving forward.
- There’s going to be a bumpy and slow recovery in Europe and the United States
- There will be a lot more trade tensions in the years ahead
- The pandemic increased tensions in China
- There are a lot of challenges still to go in the U.S. They will probably have a bumpy recovery
- In Australia, the Reserve Bank has stated they won’t increase the cash rate for at least three years. The cash rate has a direct impact on mortgages, so this is important for property
- Established and first home buyers are back in the market
- Immigration has taken a hit, with mixed results
- Some Australians are returning home
- An oversupply of new apartments is less likely to be an issue
- Technology is being embraced faster and is making people more productive
- Debt is cheaper than it’s ever been
- Changes to stamp duty will impact our property markets
- Strategic investors were protected from the ups and downs of 2020 by:
- Owning the best assets
- Having financial buffers in places
- Setting up the right ownership structures
- Having insurance
- Obtaining holistic advice
- We discuss why people want to hear negative forecasts
- You need recessions and downturns to test resilience
- Predictions for 2021:
- 8% to 12% price increases for Sydney and Melbourne
- The increase will affect houses more than units
- Brisbane will see 6% to 10% or more
- Perth might experience a rebound as well
Metropole’s Strategic Property Plan – to help both beginning and experienced investors
“I think one of the effects of COVID is that inflation around the world is going to remain weak.” – Michael Yardney
“There isn’t the large construction pipeline with lots of new dwellings coming there, so I can’t see an oversupply looming in our big cities.” – Michael Yardney
“I slept much better because I actually had set myself up by expecting the worst, and being prepared for the worst, I guess, but looking forward to the best.” – Michael Yardney
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