How are you feeling about our Property heading into 2020?
I bet it will be considerably different than how you viewed things 12 months ago.
Take your mind back to January 2019, as you were setting your goals and casting an eye on the year ahead.
You may remember, there were some dark and stormy clouds and a potential natural disaster waiting to happen.
It was a perfect storm for the nay-sayers also;
- We had an Election in the first half of 2019, with a big chance of a change of Government
- With that, there were massive changes and the potential for abolishment of Negative Gearing
- The banking system faced a Royal Commission with more potential credit restrictions on top of existing hurdles, including sky high service serviceability rates.
- The cash rate was at 1.5%
- A recession was being touted as imminent
Most people are hesitant at the best of times, so there were more than a handful of reasons to sit on the sidelines and take shelter from may have been about to happen.
Fast Forward 12 months and you would be sitting down to face an incredible different outlook as you set your sights on 2020.
I would suggest that the graph below highlights the clear contrast;
Home buying intentions are back in a big way and the highest they have been for around a decade, quite the contrast when you look back to Jan 2019.
It appears those dark and stormy clouds and potential for danger are being replaced with brighter sunshine, peaking through clouds that are rapidly disappearing.
Much of the danger has simply passed over the horizon, like a good Queensland summer storm.
The big change of Government that was touted, never took place, which in turn meant Negative Gearing and other controversial changes were off the table.
It provided a level of certainty for business and consumers.
While there was a great deal of posturing and some pain in isolated regions, the Banking Royal Commission never really took off and effected the average investor.
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- Also read:Boom to bust: What makes property prices rise and fall
- Also read:Latest property price forecasts for 2024 revealed. What’s ahead in our housing markets in the next year or two?
If anything, credit has loosened slightly in a number of areas in recent months.
Importantly for property investors, this includes the serviceability floor rates that buyers are assessed on when applying for a loan.
And the Cash Rate is half of what it was, at record lows of 0.75% with the potential of even more cuts being touted.
So, with the storm clouds passing and business more certain, a loosening of credit and cheaper money available, you can understand why there is now light on the Horizon.
While we are never out of the clear totally and things can change in an instance (as they have over the last 12 months), there is much more to be optimistic about on the home front this year.
There will always be uncertainties Overseas with different world leaders, big personalities and vastly differing policies, but that will likely be the new norm.
Get comfortable being uncomfortable as they say.
But overall it is no surprise to see property is back in favour with many Australians, as stories of price rebounds and record numbers attending open homes continue to make headlines in the media.
We are at the bottom of another property cycle and 2020 is shining brightly!
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