It’s not all doom and gloom in property By Jarrod McAleese
For many Australians, the feeling is that we are entering uncertain financial times. This notion is illustrated by the latest Westpac-Melbourne Institute Index of Consumer Sentiment – which reported a 4.5% drop in June, to 86.4. Figures of less than 100 indicate pessimism among consumers, while a score of more than 100 is representative optimism.
Opportunity awaits Rich Harvey, Buyer’s Agent and CEO, Propertybuyer.com believes the outlook isn’t all negative.
“It’s not all doom and gloom, though that is the perception currently. For homeowners, gains made in property values over the past two years have Westpac’s Chief Economist Bill been extraordinary with a 20 to 30% Evans described current levels as uptick across most major capital cities. being comparable with the worst of COVID-19, the global financial crisis, the Even if national home values were to retract by 10 per cent (something deep recession of the early nineties, that’s rarely, if ever, happened), the slowdown in the mid-eighties and homeowners are still way ahead. the recession of the early eighties. Unsurprisingly, the main factor driving the dip in confidence was inflation. In the latest survey round, 60% of respondents talked about inflation, compared to an average of 12% normally.
“Their equity is hundreds of thousands more than it was just two years ago – and this will be the safety net when making financial decisions in 2022 and beyond.
And with the Reserve Bank increasing interest rates by 50 basis points, taking the cash rate target to 0.85 per cent, the unease has only intensified.
“For people looking to enter the market, depending on your position, you can actually view today’s market as a window of opportunity. If you can buy while others are panicking, that’s a big positive. The majority of people will sit back and watch – but the smart buyers are still looking.”
Prospective homebuyers and mortgagees have been following the latest developments with bated breath. But is there a silver lining amongst the clouds? 2
