The resurgence of Covid-19 across the country is causing concern.
It wasn’t that long ago that we experienced minimal, or no cases of Covid around Australia and we thought we had this Coronavirus thing licked, and all of a sudden we are confronted with lockdowns, uncertainty, and everything that goes with it.
As Australia’s circumstances continue to rapidly evolve, many are wondering what this means for the economy and our property markets.
As our property markets don’t operate in isolation, to be a successful, strategic investor it’s important to have a telescopic view – a big picture view of the macroeconomic factors affecting not just Australia’s economy, but the world economy and that’s why each month I have these Big Picture podcast chats with Pete Wargent, a lifelong student of and commentator on our economy. After that, I’ll share my mindset message.
When we recorded last month’s Big Picture Podcast Australia’s economic recovery was continuing to unfold, jobs kept being created and our property markets keep surging.
And this month’s headlines are full of concern and mixed messages.
Let’s look at the macroeconomic factors affecting our economy and the property markets to help gain some clarity about the future.
- Monetary policy is not going to change based on the current interruption to the recovery
- Although the new lockdowns and restrictions will have costs to the economy, the banks remain optimistic
- It’s also expected that the current surge will be a temporary problem and that economic conditions will bounce back quickly once it’s over
- Despite the negative news, household wealth in Australia continues to boom
- This is a good sign for consumer spending.
- Property prices have been largely unaffected by the lockdowns
- Property values continue to rise, even though the rate of house price growth is now slowing
- Renters, however, are having difficulties and facing rental stress
- The Federal Labor party has formally dumped its contentious negative gearing policy and dropped its opposition to the federal government’s stage three tax cuts for high-income earners.
- The shape of the recovery is changing again.
- It was previously touted as a V-shaped
- Now, it’s being described as a K-shaped recovery, with jobs in public service and big business on the risking arm of the K and tourism, hospitality, and small businesses on the falling arm.
- The current surge of the Delta strain of COVID has affected the recovery and may continue to cause problems.
- As a more significant part of the population is vaccinated, lockdowns and restrictions will become rarer
- The economy will continue to rebound as that happens
- If household wealth continues to remain high and grow, it sheds a positive light on recovery over the next 6-12 months.
Metropole’s Strategic Property Plan – to help both beginning and experienced investors
Gets your bundle of eBooks and reports here: www.PodcastBonus.com.au
Join Michael’s Property Update private Facebook group by clicking here
Pete Wargent’s new book Low Rates High Returns
Some of our favourite quotes from the show:
“When we get through this, the cash that we’ve stashed is going to help make the economy rebound.” –Michael Yardney
“But look how well all those people who made their decisions a year ago are doing in the property market.” – Michael Yardney
“Entitlement gets us nothing but heartache.” – 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
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.
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.