Welcome to our Newsletter
Rick Lombardo, Principal
In my
view
On a recent trip overseas I was struck by how property prices semmed to be more affordable in Europe when compared to Australia.
Of cours, part of the reason for the "increased gap in prices" is the strenthening Australian dollar. Consider this- a little more than 20 months ago a 300,000 Euro house would have cost you A$600,000. Today the same house would equate to A$410,000.
While overseas' commentators would probably take this and a number of other considerations into account when forecasting falls in Australian prices, there is always the feeling that they aren't comparing apples to apples. The suspicion is that their views cannot help but be influenced by what happened in the US or Ireland. Without going into detail, any reading of the situation will tell you the dissimilarities between them and us outwigh the similarities.
Why listen to foreign scribes?
All this got me thinking. Why do we pay so much attention to what distant foreign commentators have to say about our housing market and economy? After all, their record of getting it right isn't at all impressive.
And in any case, what does it matter? We've got the prices we've got. We're in a market where prices have not plunged but have certainly settled at levels more attractive to buyers. It's a market where mining activity is starting to ramp up, where interest rates remain at relatively low levels and where the economy is a lot healthier than that of Europe and the US. Additionally, our housing stock is much younger.
What's more, it's a subdued market- which experience has shown is the time that the financially astute upgrade to a bigger or pricer home. After all, trading up or down in a subdued market will save you costs and taxes, and offers conditional of the sale of your home will have more chance of success.
rick_realtyone.com.au
Mob: 0419 918 888
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