The most successful property investors in 2020 will be those who think small. For the past six years, including 2019, it’s all been about big: the two big cities, their boom, their downturn and their recovery.
Mercifully, 2020 will see the focus move elsewhere. Some of the smaller capital cities will capture attention and there will be increased awareness of regional areas, especially those with economic diversity and less reliance on agriculture.
While 2019 ended with the media obsessing over the size and speed of the recovery in Melbourne and Sydney, the apparent level of growth in the latter months of the year is unsustainable. It reflected a reaction to improved conditions in a climate of low supply – not to mention a media overreaction to shortterm data from one research source.
Forecasters have tipped Melbourne and Sydney to lead the nation on price growth in 2020, but most are simply predicting the recent past – extrapolating recent events into the future.
Indeed, some of the media commentary on big city prices late in 2019 was beyond rational, converting a shortterm rebound in some of the data into a national sensation.
A more sophisticated approach, which involves looking at underlying economic factors and leading indicators, suggests other places will rise from the pack in 2020, while conditions in Melbourne and Sydney settle down to generate a “normal” market.
Key factors driving markets
The federal election result in May was critical, because it removed the biggest brake on major markets – the fear of Labor’s tax policies. Then followed, in rapid succession, the APRA relaxation of lending criteria, tax cuts, measures to help first home buyers and interest rate reductions. Consumer sentiment about real estate improved and the tone of media coverage turned generally positive.
This story is from the February 2020 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the February 2020 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Is the public market shrinking?
Australia needs a healthy stock market to give companies access to funds and to allow retail investors to build wealth.
India: three steps to transformation
Massive investment and extensive reforms turbocharge the economy.
The ballet of business
Changing direction, products, models and marketing is a hard task for a business. We chart what it takes to turn a business around, plus profile four successful pivots.
Save money and the planet
Could the high cost of living give us the incentive we need to reduce how much water and energy we use or waste? These eco-friendly household tips will help you do just that.
AI adoption is the new black
Artificial intelligence is set to reshape the commercial world, and small enterprises can’t afford to miss the boat.
Spam attack! Murky laws jam our inboxes
Unwanted marketing material is one of the pain points of modern life.
From rags to riches in style
Rich Tran sported a bowl cut until he was 14 years old and had no intention of becoming a hairdresser.
New work deals are killing the 'old' office
The Covid pandemic and the subsequent lockdowns accelerated the trend to more people working from home. It was a mixed experience.
Points taken: the truth about rewards
Can hopping between credit cards really boost your frequent flyer haul and give you cheap or free travel - or is it doing more harm than good behind the scenes? Money puts it to the test.
Shortcuts to own a home
Innovative ideas with a focus on low costs and sustainability could help solve the housing crunch.