- Posted By Geoff Oxford
It’s inescapable. It impacts all of us. It won’t go away. It’s turning our entire world and “way of life” upside down and it’s spreading faster than wildfire, claiming a growing number of victims.
I’m not talking about disease. Rather, I’m referring to the pandemic of the panic gripping millions of people across the planet right now which is driven predominantly by mainstream media outlets.
Fear and scaremongering from the press is nothing new to property investors. We’ve seen and heard it all before over the decades and it normally comes from the uneducated whom never invest or purchase property. Just not to this degree perhaps.
Housing has always been a desirable commodity and for those seeking to build a retirement nest egg, there’s rarely a week that goes by where a story doesn’t surface suggesting that property markets will “collapse” or a bubble will “burst” and to then sell you SHARES or managed fund with their special graphs. Well we all know how that has turned out lately?
If anything, I think a lot of us have become somewhat “numb” to it all. Particularly those who’ve been in the property game for the long haul and not only survived to tell the tale, but also grown a thriving, profitable and resilient investment portfolio.
That’s not to say we don’t take this stuff seriously. Of course we do, especially me whom not only sells and manages property but also invests heavily in both Residential and Commercial property of my own, which I have been investing in for 30 Years. Hence, we have financial buffers and risk mitigation plans in place, to “weather” such storms as the current Coronavirus lockdown. Even better the government and banks have a massive invested interest to see the property market stays stable as both benefit from the revenue long term.
We also recognise that times of uncertainty, where many people will become immobilised by fear, can create some of the greatest opportunities for those whom have security in their income or those whom have retired that know how to plan and prepare for the opportunities ahead. Destruction leads to a very rough road…
But it also breeds creation. Real estate is by far the most resilient of all asset classes. As one of the few essential commodities required for our base survival, housing will always bounce back quickly. As will economies.
This current situation is no different than any downturn in history and the time to buy is often when everyone else is afraid. Have you heard your parents tell the story of buying their first home for shillings or $6000. Those times are NOW when homes are now more affordable than ever, and interest rates are at the lowest in history.
Will things change as a result of the world going into indefinite lockdown? You betcha! Can you or I determine what’s going to come of all this? Absolutely not.
What we can do however, is not lose our minds – based on media stories or what family and friends are saying, doing or believing all over our social newsfeeds – but instead USE our minds…to maintain a healthy perspective on the problem at hand, thereby determining the best path for us personally, moving forward.
Pause for a moment, turn the TV off, and ask yourself – who, how, what and where do I want to be when I come out of isolation? And be prepared to listen to your own wise counsel. Because you know yourself better than anyone!
The Lucky Country indeed
Talking about perspectives, let’s take a moment to consider the major Australian property markets and predictions around how they might fare over the coming months and years.
As always, “expert forecasts” depend largely on who you listen to, and it’s important to note as investors we’re not “buying the markets”, but carefully researched and selected real estate that has a strong history of stable growth like the Mornington Peninsula, regardless of extenuating circumstances or X-factors.
Meanwhile, AMP Capital chief economist Shane Oliver predicted the unemployment spike caused by coronavirus could see property prices in Melbourne and Sydney fall by as much as 20 per cent. I have seen some homes sell even less with some inexperienced agents whom have only SOLD in good times panic when they don’t know how to sell in quieter times heavily reducing prices, desperate to keep their income.
There are so many numbers being bandied around right now, it’s enough to make your head spin. Who do you believe? What predictions will prove correct? How long will this continue?
You may as well be asking, how long is a piece of string? Because the truth is, no one can really say in earnest. However the fundamentals are still the same on the Mornington Peninsula where there is always a lack of perfect homes with land, views, location for a budget. These are unprecedented times and as such, we haven’t really got any standards by which to measure or judge them accurately. As an example I have cashed up buyers from 1mill-3mill all with their list of the perfect home for their budget. Yet I simply don’t have the home listed!
What we do know, is that compared to many other developed nations who’ve been dramatically impacted by current events, Australia is indeed looking more and more like the Lucky Country right about now and there is simply no better place than to self Isolate than our beautiful Peninsula.
We are weathering this storm better than most. And the world is taking notice. We boast some of the most liveable cities and vast tracts of land, with one of the smallest populations (relatively speaking).
If we were seen as a desirable destination for migration before this virus shook the world to its core, that reputation is only set to become stronger in light of recent happenings and the desire for that Seachange will be stronger than ever, hence why our market will bounce back quickly in the future.
I, for one, believe that investors who were prepared for this storm…because they understand that property is a long term prospect and not a short term money spinner, will recognise the approaching opportunity to make their portfolios even more profitable.
Yes… Some house prices will fall in the short term and we already have some bargains available in the most desired locations. But with interest rates at record lows and less competition in the markets…well, you do the math!
One thing I would agree with, is that the impending downturn will likely expose any economic weaknesses that perhaps need a restructuring, in order to work more effectively.
Likewise we can all use this this time to review our portfolio’s to see what we can do to put ourselves in the best position for the next twelve month, and through the next five years.
We are here to help, so drop me a line if you would like to discuss how we can help make that Property Dream come true and really turn this Negative time into a Positive into the future. Stay Safe and Positive.