[Podcast] Our no-nonsense Big Picture Podcast about the economy and property markets with Pete Wargent

In this month’s Big Picture episode of the Michael Yardney Podcast, Pete Wargent and I dissect the multitude of macro-economic factors currently shaping our housing markets and the broader economy.

There’s a lot to discuss today including the latest inflation data, this month’s RBA’s interest rate decision, and what both these mean for the future of interest rates and our housing markets.

Inflation, interest, and Australia's real estate market

In my conversation with Pete today, we examine the impact of various factors on property investment, from interest rates to construction challenges, offering strategic insights for investors.

Take a look at the main themes discussed throughout the episode:

• Australians have gotten used to low inflation, but because of the pandemic, the stimulus, the lockdowns, and other disruptions, they’ve experienced a dramatic spike
  • However, interest rate hikes have caused inflation to fall faster than expected. At the end of 2023, it was only 0.6%
• Buyers and sellers returned to the property market once it became clear that there weren’t going to be capital gains changes.
• Property stock is low, so the number of buyers in the market will change faster than the number of properties for sale. This is going to increase competition for quality properties.
• The markets are pointing to lower interest rates over the next few years.
• Apartment rents are projected to grow 26% between now and 2028
• The government has announced a target of 1.2 million dwellings in five years
  • However, construction isn’t profitable at the moment, which means it may be a while before that starts producing results
• An intergenerational wealth transfer is occurring, where parents help children with the funds they need to enter the property market while they’re still alive
• Australia’s population increased by 624,100 people over 12 months
  • It’s now reached 27 million
  • This creates challenges in property and other areas of society
    • Infrastructure elements, such as water and sewage and schools and hospitals, aren’t being built fast enough for the influx of people.
  • The latest housing finance figures from the ABS showed there was a fall in new loan commitments.

Hopefully, my conversation with Pete helped you understand the current market dynamics, how to plan for the future, and when to seize investment opportunities. That way, you’ll have the knowledge to make informed decisions in a changing economic landscape.

Links and Resources:

Metropole’s Strategic Property Plan – to help both beginning and experienced investors

Get a bundle of free reports and eBooks – www.PodcastBonus.com.au

Pete Wargent’s blog

Join Pete and me at Wealth Retreat – www.WealthRetreat.com.au

Some of our favourite quotes from the show:

“We know it's going to be very expensive to build new apartments and we know the government's actually suggesting that we've got to densify, we've got to build more of these apartments, high-rise towers, but I can't see that solving the rental crisis.” – Michael Yardney

“Well, I know you own apartments and I own a number of apartment blocks, so they haven't performed well over the last decade. They have in previous times and I'm looking forward to some good times ahead, and I guess that's the way investors really should think.” – Michael Yardney

“If it keeps growing at this rate, Australia's population will be 41 million people by 2042. That'll be 16 million more than the 2002 forecast by the government.” – Michael Yardney

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