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Is property a still good investment? The ‘experts’ think so

You’ve probably heard the the saying ‘safe as houses’?

Well, it appears that tightly-held belief of many Australians is still tightly-held, with some of Australia’s economic experts saying they’d be putting their money into property right now.

A Finder Study surveyed 28 leading experts and economists and asked for their opinion on future cash rate movements, as well as other issues related to the Australian economy.

When these experts were asked: “Where do you think is the best place to invest your money right now?”, 1 in 3 named “property” as their top option.

Property was followed by shares (21%), gold (14%), superannuation (11%) and then cash (7%).

Whilst this is obviously a very small sample size and by no means a comprehensive study, we find it interesting nonetheless.

 

But isn’t the property market meant to be in trouble?

According to CoreLogic’s latest data, nationwide median housing values fell 0.6% in July and fell 1.6% for the quarter, bringing the median dwelling value to $552,912.

But if you consider it in the context of the past year, national housing values have risen by 7.1%.

Sydney property prices led the way with a 12.1% increase in median value, followed by Melbourne (8.7%), Canberra (7.2%), Hobart (5.9%), Brisbane (3.8%) and Adelaide (2.4%).

Perth (-2.5%) and Darwin (-2.2%) were the only capital cities to record negative growth in housing values over the past 12 months.

Tim Lawless, CoreLogic’s head of research, said housing markets have remained relatively resilient through the COVID-19 period so far.

“The impact from COVID-19 on housing values has been orderly to-date,” says Lawless.

“Record low interest rates, government support and loan repayment holidays for distressed borrowers have helped to insulate the housing market from a more significant downturn.”

From what we’ve seen, Canberra’s property market potentially has another layer of insulation, due to a higher number of dual income households with relatively-secure government employment.

Lawless adds that the medium-term outlook for the property market may show a weakening though, due to the fact that fiscal support is set to reduce from October and home loan repayment holidays offered by the majors are set to expire at the end of March next year.

 

Other interesting property market predictions

Here are a few other interesting stats and predictions we found from the Finder survey:

– Almost half of experts believe now is a good time for homeowners to put their property on the market, while a quarter thought homeowners should wait two years.

– All experts agreed that there would be no further cash rate cuts this year. However, more than two-thirds forecast an increase in 2021 or 2022.

– Two-thirds of the experts surveyed believe Australia will see GDP growth in 2020

– Anyone who reads this far wants to take the next step and talk to us about their own borrowing options. You can complete your details here 😉

 

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