There are a growing number of experts around Australia starting to jump on the bull.
The latest advocate on the strength of the Australian property market is Reserve Bank assistant governor Guy Debelle who believes the reasons Australia is not likely to bust are:
- There is no oversupply of housing in the country.
- Household debt levels were manageable.
- Mortgage arrears remained very low
“This (housing risk) is not something that keeps me awake at night.” he added.
The RBA along with commercial banks and private sector economists such as Christopher Joye regularly reject the notion the country’s property market is due for a drop and point instead to Australia’s high lending standards and low unemployment as reasons to get behind the housing market.
A recent report by BIS Shrapnel goes further, forecasting solid growth over the next three years to 2015 for many areas of the country especially ones associated with the resources sector.
IPG has been very bullish about certain regional areas connected to mining and believe the best is yet to come. BIS Shrapnel allude to some of this activity in their report.
“While there have been pockets of buoyancy in regional centres underpinned by record levels of investment in the resources sector, the flow on effects of this investment have not yet permeated through to the capital cities.”
Another reason why investors have already started looking at putting their money back into property is the other asset classes are not looking so attractive.
As shares continue to be extremely volatile and fixed interest looks less appealing with dropping interest rates, property is beginning to shine as the more attractive alternative.
Charles Tarbey, chairman of Century 21 Australasia believes many share market investors are fed up of the ups and downs of the market and ready to switch to the property market.
“Given the impressive levels of stock available and the fact that prices appear to be quite reasonable, many investors are considering getting on to the ladder.”
Author of the BIS Shrapnel report, Angie Zigomanis believes that the low interest rates will attract many first home-owners too.
“While consumers remain nervous about the general economy, the next three years could see a surge in the number of first time buyers entering the market.”
While all this is very positive for the market as a whole, here at IPG, the sentiment of the country’s market is not a major factor for our buyers. We delve much deeper into specific area of the country where industry and employment are growing in a big way. This in turns creates a demand for housing that our investors can capitalise on.
A recent RP Data report confirms that it is the mining boom that is leading the boost in prices and demand in certain parts of the country leading to small pockets of extraordinary growth potential. This is IPG’s expertise.