Confidence is the missing link
August 19th, 2013 by Geoff Baldwin
People say that current record low interest rates may create another property boom however the records show that it’s not just the cost of money that boosts the market according to RE/MAX WA Managing Director, Geoff Baldwin.
“The 1988 real estate boom started when interest rates were hovering around 14 percent so with fixed rate loans currently available from as low as 4.5 percent it would be reasonable to expect a stampede to property”, Mr Baldwin said.
“With rent returns remaining comparatively high, a low vacancy rate and an increasing number of positively and neutrally geared opportunities all the boxes are ticked for investors to be very active, however the one missing link is confidence!
“Whether it be first home buyers, upgraders or investors, when confidence is low so is activity and right now in Australia there exists a palpable lack of confidence.
“Many put this hesitance down to the current negative political situation while others say it is a hangover from the GFC or just a general mistrust of the market but one thing is certain, when it changes we will see a sudden lift in activity and prices will bounce.
“Most informed projectionists are in agreement that the Australian property market is affected by elections so if you accept that the upcoming election will clear the haze that has been present since Julia Gillard kicked off the world’s longest election campaign you will also acknowledge that a new positivity will return after the 7th of September.
“Spring motivates activity each year after the Winter lull so all considered, now may be the last opportunity for buyers to take action at today’s prices”, Mr Baldwin said.