Regardless of the outcomes in Canberra today our economy will keep turning over. It will grow and contract like a living breathing giant. Most people forget that the mining industry is only 20% of our economy. And whilst this has faltered due to commodity prices and the other economies around the world slowing, 80% of our economy is still there to pick up the slack!!
It would be nice to have leaders in Canberra that are there to do their country a service. It would be wonderful to have our 150 sitting members and 76 senators all thinking this. But alas, I do not think they do. Basically it is now a case of: if you are not in power, what can we ruin in order to regain power. And the easiest thing is to stop governments governing. I have no issue with who is elected to run this country and I have no issues about a robust opposition, but when an elected government with certain mandates cannot get them through a hostile Senate, then it is the people who need to stop and think. It is not Tony Abbot’s fault nor is it Bill Shortens’ either. If people want good leadership and stability then The Australian People need to vote a little more consistently for one side or the other in both the House and the Senate.
Our Reserve Bank Governor has let us know that he expects the economy to remain “sluggish” for some time so we can expect to see interest rates at this level for “some time”. I would expect one further drop in rates and then a year or so of stability with changes in the economy being the forerunner of any change in bias. By this time next year, maybe even despite the government in power, our economy should start to kick start itself.
And so how does all this effect the Melbourne Property Market. Simple!! Investment grade properties in the $400k – $800k range will be in high demand over the next 2 years. These properties will see excellent capital growth in that time and if you buy in the right area they should see consistent rental returns at much better rates than any bank is offering. These will be found in the outer suburbs.
High density areas in the 3-7kms from CBD are a lot more volatile than those 7 – 20km from the CBD. The areas that should show consistency throughout changes in environment are areas built to suit families. Areas with access to schools, shops, parks and gardens; great access to the freeways to get in and out of the CBD. All of these reasons are going to keep people in an area. These are now the $800k – $1.5m range. These areas will also be in strong demand this year from people who have been looking to upgrade.
If you are looking to purchase an investment property whilst the property market is in full force call us on 03 9773 8404.
Ian James
Director
JPP Buyer Advocates