[Podcast] Our property markets are experiencing a crisis of confidence | Dr. Andrew Wilson

Is the media killing our property markets and the economy?

Something is causing a crisis of confidence — and it’s not the economic fundamentals.

But homeowners and property investors are scared.  My Podcast 76 Crisis Of Confidence

They’re reading headlines like: 

  • Melbourne and Sydney house prices are falling $1,000 a week.
  • A Shorten government will decimate the property market because of its proposed tax changes.
  • One million investors will need to sell up their homes because their loans will convert from interest only to principle and interest.

No wonder they’re scared.

But should they be?

Are the headlines right?

Today I’ll chat with Dr. Andrew Wilson, Chief Economist of MyHousingMarket.com.au and we’ll tell you what’s really going on.

Crisis of Confidence

The regularly reported ANZ-Roy Morgan consumer confidence index is below the longer-term average of 113 held since 1990

Investors are asking us at Metropole if they should sell

So, what’s changed?

What’s scaring investors?

Remember, different consumers can be scared about different things but here are the factors that could explain it:

  • I’ve never seen the media with as much negative press about house prices heading south – not even during the global financial crisis news bad economy
  • Headlines talk about rising interest rates.
  • It’s harder to get money from the banks due to the restrictions placed by APRA and the Royal Commission has scared the banks,
  • The Wentworth by-election result and the fact that we now have a minority Government. This may mean we have another Federal election, which might come sooner than the one expected in late May.
  • The uncertainty of State elections in Victoria and NSW
  • The stock market is pretty negative and crazy right now, with the S&P/ASX 200 index down over 6% in October.
  • Low wages growth – increasing Petrol prices are now at the highest level in a decade, which has to be scaring households on tight budgets.

Highlights of the Interview With Dr. Andrew Wilson

  • You would have to go back to 2008 to see clearance rates consistently below 50% at this time of the year, and that was at the time of the global financial crisis.Economy
  • Currently, however, the drivers of the housing market are on the opposite end of the scale. We have a strong economy, unemployment numbers show that performance in the labor market is best in six years. We’re creating jobs, we have strong migration, there are booming first home buyer numbers, rents are increasing, interest rates are low and not increasing. Yet the market has lost its nerve.
  • Banks have tightened their lending which means fewer buyers, which means fewer sellers, and banks see the decline and tighten lending again. It’s a self-perpetuating cycle.
  • When consumer confidence is high, it can take a while to shift it back. It’s even harder to shift low confidence to high confidence.
  • Interest rates will probably go down before they go up again.
  • We have strong fundamentals for property. There’s no financial crisis.

Links and Resources:

Michael Yardney

Metropole Property Strategists

Rich Habits Poor Habits

Dr. Andrew Wilson

Some of our favourite quotes from the show: Your Future

“Those who can see the big picture opportunities and invest based on fundamentals, rather than making investment decisions based on the media, are going to take advantage of the opportunities the market offers them.”  – Michael Yardney

“The best way to reflect on your failures is to focus on the lessons that you’ve learned and the person that you’ve become, rather than spending your time avoiding failure.” –Michael Yardney

“It’s not the events that define who you are. It’s how you choose to react to what’s happening to you that defines who you are.” –Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help

new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes – it’s your way of passing the message forward to others and saying thank you to me. Here’s how.

Property investors 570x292
icon-podcast-large

Subscribe & don’t miss a single episode of michael yardney’s podcast

Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.

Need help listening to michael yardney’s podcast from your phone or tablet?

We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.

icon-email-large

Prefer to subscribe via email?

Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.


Avatar for Property Update

About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


'[Podcast] Our property markets are experiencing a crisis of confidence | Dr. Andrew Wilson' have 2 comments

  1. Avatar for Property Update

    November 9, 2018 Sally

    The media has an agenda. The media actually ceased to report news a long time ago.

    Reply

    • Avatar for Property Update

      November 9, 2018 Michael Yardney

      Well said Sally – we tend to think that we’re the media’s clients / customers – we are not.
      The media wants to please the advertisers so it looks for clicks

      Reply


Would you like to share your thoughts?

Your email address will not be published.
CAPTCHA Image

*


facebook
twitter
google
0
linkedin
0
email
Michael's Daily Insights

Join Michael Yardney's inner circle of daily subscribers.

NOTE: this daily service is a different subscription to our weekly newsletter so...

REGISTER NOW

Subscribe!