Where Is The Property Market Heading?
That’s the questions on every investor’s lips – where is the property market heading over the next 12 months?
Nathan shares his views below.
Rates are going down.
When Nathan said two years ago that we would see rates heading to zero, many people laughed at him.
They also laughed when he said a GFD was coming – but now, all the signs are pointing to just that.
The RBA recently dropped rates twice over two consecutive months to a new low of 1%.
According to Nathan, another rate decrease is possible in September – and if this doesn’t happen, it will definitely occur in October.
Over the next two or three years, rates are likely to drop below zero, which will create momentum and velocity.
He says, the reason money is called currency is because it needs momentum to make it effective.
Recent property market trends.
Nathan says the Sydney market has been smashed by this recent downturn. He has recently been able to purchase properties in Sydney for as little as $250,000 – when they were selling for $350,000-$400,000 just two years ago.
The Queensland market has been different. While some investor-centric areas have been suppressed, other areas, such as the Gold Coast, have still seen growth.
Some mining towns are likely to go up again due to economic pressure on commodity prices. Even so, Nathan says that he doesn’t speculate in mining towns because they don’t offer long term stability.
Sydney rents have been suffering.
Sydney rents haven’t been doing too well recently. Nathan says he doesn’t like to see rents suffer – in fact, he would rather see prices drop.
He says that rents went up in the lead up to the GFC after a period of poor performance – which is something we may see again soon.
On the upside, since prices have dropped in Sydney, it is possible to buy neutral cashflow properties again – something that was near impossible during the boom.
Proactive landlords who market their properties well and ask the right amount of rent have still been successful during this time. Now more than ever, it is important to have a good property manager on board.
Will prices go up again?
And now for the million-dollar question – will property prices go up again?
Nathan says he has already started to see a turnaround in prices, but he is not expecting to see massive growth just yet.
He says no-one has addressed what has caused this market to occur.
He does think we are at the bottom of the market though, which means now is the best time to build an asset base. If you can pick up ten properties now when prices are at their lowest, you will be primed for the next cycle of growth before it occurs. If you take action now, you could be setting yourself up for an early retirement during the next boom.
How have your properties performed over the past 12 months? Please share your experiences in the comments section below.