MARKET COMMENT FROM PROPERTY PROFESSOR PETER KOULIZOS… This year is going to be a very interesting year. Along with the rest of the world, we are currently experiencing one of the worst financial crises in our modern history. The bad news is that some people will lose their jobs and business investment has decreased significantly. But the very good news is that interest rates are currently at an historical low and are set to drop further.
I know that much of the media coverage on the economy appears all “doom and gloom”. This is having the effect of significantly decreasing consumer and business confidence. When people and businesses lack confidence and are worried, they spend less money which in turn slows down the economy. Hence the large stimulus packages the federal government has introduced to encourage us to spend and kick start the economy once again.
If you sift through all the doom and gloom stories and stick to reading the objective facts rather than the sensational headlines, there are some heartening points.
Firstly, property prices around most of the country dropped slightly last year which provides investors and home buyers with some possible “bargain buying” opportunities.
Secondly, rents are on the increase which results in a higher yield for the investor but also encourages tenants to start looking at buying a property rather than renting. The federal government’s First Home Owners Boost (FHOB) will greatly assist with these purchasesFinally, and most importantly, mortgage repayments have almost halved over the past year which makes buying multiple properties (and some of them positively geared), a reality. Based on my earlier points relating to FHOB and low interest rates, the people that will benefit the most from the property market in 2009 are first home buyers and investors.
“There has never been a better time to buy property.” How many times have you heard this catch phrase from property spruikers and slick sales people? Well this time, it is true! You can take it from me, as a person who doesn’t sell property but lectures in property and most importantly, personally invests in property. There has never been a better time to buy property.
In class recently, I reiterated this point to my students when I said: “There will be some smart people who will create a generation of wealth in the next two to three years; I hope you are one of them”.
Peter Koulizos is a property lecturer and author of Top Australian SuburbsArticle courtesy of realestate.com.au
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