Why the market is set to boom

Predictions of massive price drops always happen when there is an economic shock of some sorts.

Forecasts of 30 per cent property prices drops that are seemingly imminent, but which ultimately never happen.

In fact, after the GFC and the last recession, any temporary softening of prices soon turned into sustained growth.


This time again, the same is likely to be true, but in a more significant way.

That’s because we have the lowest interest rates on record, which the Reserve Bank has told us will remain that way until Australia again reaches full employment – a timeframe of a number of years into the future.


What have prices been doing?

Property investment is, unsurprisingly, impacted by consumer sentiment.

So, when people are fearful, sales drop off and prices flatline.

Conversely, when people are confident, sales soar, along with prices.

The uncertainty about the impact of coronavirus on the economy has seen sales prices reduce somewhat, but it’s not what it seems in my opinion.

Rather, people are currently paying the listing price instead of five or even 10 per cent above it, which is not a technical price reduction at all.

At the time of writing this, we aren’t seeing significant price falls come through the data, but that is also because most property metrics lag reality by about three months.

So, when the data for the current quarter becomes available in a few months, it is already old news and the bottom of the market would have already passed.


One of the factors that generally causes sudden price falls is mortgagee sales and that is not happening – and is unlikely to happen as well.

That’s because of the various financial support programs available, such as JobKeeper, but also mortgage repayment pauses and rental support packages.

This means that property owners aren’t suffering the same level of financial distress as perhaps has been the case during other economic downturns.

Also, with fewer active buyers, many vendors are holding off listing their properties for sale, which is helping to prevent price falls.


What will happen to prices next?

Like with pretty much every market cycle, most people sit on the sidelines until there is “proof” of better times on the horizon.

Of course, by then, they have already missed the best buying opportunities.

This is currently the case, with many potential buyers waiting until restrictions have been eased and a more normal life has returned before entering or re-entering the market.

This means that there are presently excellent property investment opportunities available because there are fewer buyers competing on the same properties.

Indeed, it is almost the Holy Grail of a property investment cycle, with the combo of softer property prices and cheap credit.

However, not long after the fear has dissipated and restrictions have been removed, hordes of buyers will scramble to get back into the market, because of the following factors:

  • It’s the safest asset class with a history of withstanding even the most severe of economic downturns.
  • With hundreds of billions of dollars entering our financial system, we will see higher than usual inflation over the next five to 10 years, which will devalue the dollar and see real estate prices rise. The inflation will also devalue debt.
  • Money is becoming worthless because of cheap credit, plus with savings doing nothing for you in the bank, people are looking for a safer return via real estate.
  • We are in a deflationary period. So, to get us out of this situation, we will be printing money. Perhaps we will even move to negative interest rates to stimulate spending, which will likely motivate more people to invest their cash into a stable asset like real estate.

That’s why, with interest rates on track to be only two to three per cent for a number of years, as well as fewer buyers transacting, my money is on property markets starting to boom before the year is out.

High-Performance Property Investment in
5 Simple Steps

In this free guide, you will learn how to Implement the same strategies that led me to build a $3.5 million dollar portfolio in less than six years. – Daniel Walsh

Related Post


Respecting your Privacy

Your Property Your Wealth Pty Ltd (YPYW) is committed to supporting the Australian Privacy Principles for all fair handling of Personal Information which set clear standards for the collection, use, disclosure, storage of and access to Personal Information collected during the course of business operations and compliance with the Privacy Act 1988 (Commonwealth) and its amendments (the Act), and the Australian Privacy Principles (APPs) set out in that Act. You can see the full text of the APPs online at the Office of the Australian Information Commissioner’s website at:


Personal Information means your name, mailing or residential address, telephone number, email address and other transaction and registration details including the company you work for and your role and financial information, including credit card information and information collected from credit reporting agencies.

Our respect for your rights to the privacy of your personal information is paramount.  We have policies and procedures in place to ensure that all personal information, no matter how or where it is obtained, is handled sensitively, securely and in accordance with the APPs.

This Privacy Policy sets out:

  • What sort of personal information is collected and stored;
  • How information is collected and used;
  • What happens if you choose not to provide the required information; and
  • How you can request access to the personal information we hold about you.

From time to time it may be necessary for YPYW to review and revise this Privacy Policy. We reserve the right to change our policy at any time. Amendments or replacements of the Privacy Policy will be posted on our website.

Collection of Your Personal Information

We only collect personal information relevant to our business relationship with you so that we can provide our services and products. We may collect your personal information:

  • directly from you including via telephone, email or facsimile;
  • when your register on our website;
  • when you place an order or service request with us;
  • where you access and interact with our website;
  • from other sources including a third party such as credit reporting; and
  • any correspondence we receive from you.

Is your personal information secure

Where you submit personal information, we manage it by using up-to-date techniques and processes that meet current industry standards to ensure that your personal information is kept secure and confidential. We also take measures to destroy or permanently de-identify personal information if it is no longer required.

Use and Disclosure of Personal Information

You acknowledge and consent that by providing your personal information to us that we may use and disclose your personal information for the purpose for which it was collected or for a related or ancillary purpose such as:

  • supply of our services and products to you in accordance with our Terms and Conditions and any agreement entered into with you, to facilitate, process, carry out and respond to your request;
  • to our third party service providers to assist us in providing and improving our services and products to you and developing, improving and marketing our services and products to you;
  • for regulatory reporting and compliance with our legal obligations, to various regulatory bodies and law enforcement officials and agencies to protect against fraud and for related security purposes;
  • to the seller or supplier of any products to you for the purpose of ascertaining and obtaining any information required to perform our services for you;
  • to identify you and conduct appropriate checks, including credit checks;
  • set up, administer and manage our services and products and systems, including the management and administration of an account;
  • to train and develop our staff to better provide services to you;
  • to contact you; and
  • to our successors and/or assigns

What happens if you do not want to disclose personal information?

You have no obligation to provide any personal information requested by us, but if you choose to withhold personal information, we may not be able to provide you with the products and services that depend on the collection of that information.

Removing your personal information

You may contact us at any time in writing and request that we remove and delete your stored personal information.

Providing Personal Information About Another Person

You represent to us that where you provide personal information to us about another person, you are authorised to provide that information to us, and that you will inform that person who we are, how we use and disclose their information, and that they can gain access to that information.

Linked Sites

YPYW’s website may contain links to websites which are owned or operated by other parties. You should make enquiries as to the privacy policies of these parties. We are not responsible for information, or the privacy practices of such websites.

How can you access your personal information?

You may in writing request access to personal information that we hold about you. We will provide you with access to personal information in accordance with the Act and APPs and we may not grant you access to the personal information that we hold where the APPs allow us to do so. If you are refused access to information, we will provide you with reasons for the refusal in writing.

How to contact us

If you have any questions in relation to privacy, please contact us on 0490 912 045 or email Daniel Walsh – admin@ypyw.com.au. For more information about privacy law please visit http://www.oaic.gov.au/privacy.

High-Performance Property Investment in 5 Simple Steps

In this free guide, you will learn how to Implement the same strategies that led me to build a $3.5 million dollar portfolio in less than six years. – Daniel Walsh