Terry’s View: Time To Look Past The Noise

Real estate consumers appear to believe the current disruption afflicting property markets is exceptional. It’s nothing of the sort. As far as government-generated inconveniences go, this one is relatively ho-hum.

I owned real estate in the 1980s when mortgage rates hit 17%. That was serious disruption, but we survived.

During the GFC, forecasts of 40% declines in property values gained serious media traction. Nothing like that happened. When COVID shut down real estate activity, major banks tipped falls of 33%. What followed was a spectacular national boom.

So I’m finding the media frenzy over the Albanese Government’s shafting of property investors a tad tedious. Forecasts of values nosediving, plummeting and collapsing are boringly predictable. Savvy investors shouldn’t be intimidated by white noise.

When transacting large sums of money, we’re supposed to base decisions on reality. Fundamentals. Research. Taking a long-term view.

Instead, many buyers and vendors have hit pause. Even people unaffected by changes to property taxes and SMSFs are hesitating, worried the Prime Minister will “come to a different position” again and deliver another revenue-raising ambush.

Uncertainty is understandable, but allowing headlines to dictate your next move is hardly a sound property investment strategy.

They’re failing to learn from recent history or see what’s under their noses.

Very little has changed in the fundamentals. Demand remains strong, driven by population growth and infrastructure investment, while we continue to under-build. Rental vacancies have hovered between 1% and 1.5% since COVID.

It’s a recipe for ongoing growth in prices and rents, and the Budget has turbocharged it. Rents are already at record highs and continue to grow.

The winners will be independent thinkers who see opportunities amid the political smokescreens and media beat-ups.

Consider Melbourne, where the median dwelling price is $150,000 below Adelaide and more than $200,000 below Perth. Consider infrastructure projects driving housing demand across Australia. Or desirable locations that were too hot to handle six months ago and now offer value.

I’ve been writing about real estate for 43 years and have experienced far greater disruption. It’s time to end our collective dummy-spit and get on with business.