Is it too late to buy property? Have you missed the boat?
Over the past five to ten years property prices have surged in Sydney. Investors and home-owners have made a packet just from buying in the right place at the right time.
Many people are now asking if it is too late to buy property?
According to Nathan Birch, the answer is a big fat “no.”
Property price growth has slowed down.
In his yearly market outlook for 2018, Nathan said,
“We are entering into a period of uncertainty. Tighter lending regulation from APRA has made it difficult for buyers all over Australia to get finance. This has meant fewer buyers across all markets.”
“It is likely the market will stagnate over the next 12 to 18 months.”
CoreLogic’s most recent home value index has shown Sydney property prices have already been falling for the past four months. The median dwelling price in Sydney dropped 0.9 per cent to about $895,000 during the month of December.
CoreLogic head of research Tim Lawless said tighter lending conditions played a major part in the slowdown.
According to Nathan, “This is excellent news for investors.”
“While many are finding it difficult to get finance, those who are ready to pounce will have the opportunity to pick up properties for cheap.”
The slowdown won’t last for long.
According to Lawless,
“I think the fact we have seen a very clear but gradual slowdown in housing markets, particularly led by Sydney and to a lesser extent Melbourne is a trend that is set to continue.”
“It doesn’t suggest the housing market has fallen off a cliff. This has been a very controlled and reasonable slow down.”
Nathan agrees. He believes prices are not set to crash. Instead, the market is simply taking a “breather” for the next year or so, before it ramps up speed again.
Prices are set to continue climbing over the long term, he says.
“I believe that if we fast forward ten years we’re going to be sitting here thinking, ‘Shit, we could have bought a house in Sydney for half a million dollars.’”
He says the entry price for a house in Mt Druitt could be as high as $2 million by that stage.
Have you missed the boat?
When it comes to buying property, “missing the boat” is a sentiment that gets played time and time again.
“The same thing could have been said in 1988 when people said it was too unaffordable to buy a house in Bondi for $100,000,” says Nathan.
“Now it’s around $2 million to $3 million for a house in Bondi.”
Property is a hedge against inflation.
According to Nathan, property is an excellent long term investment because it is a hedge against inflation.
He says, since 1971, when the US Dollar became a fiat currency, there has been a recession every ten years or so.
“Every time there is a recession, rates go down lower and lower,” says Nathan.
“And, inflation becomes higher and higher as prices rise.”
A new monetary reality.
Nathan believes that a massive shift in the monetary system is starting to occur.
He says that hyperinflation will make debt irrelevant, and that this will be good news for property investors.
“It’s a very exciting time for those who are prepared,” he says.
“Those who don’t take action,” he says, “are going to be hurt so badly.”
He says that in a hyper-inflated economy, “the savers are going to be the losers.”
Those who have the right balance of leveraged assets will be the winners, he says.
In other words, debt will be better than savings.
What is the solution?
While those who are unaware of the changing economy will find themselves short-changed, those who are prepared to take action now will come out on top.
It is not too late to buy property, says Nathan. While the market goes through upswings and downswings, the value of property generally keeps climbing over time.
Binvested can help investors thrive in a future economy marked by hyperinflation.
We aim to create more winners in the new economic age.
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