The great Australian dream is NOT lost.

‍140 years of history is the answer to your future property decisions.

‍

The great buying opportunity with rates at 2% is gone. There is a need to be realistic and adjust to the landscape.

Evolution and history have shown us that it is not the strongest but the most adaptable that survives.

History has also shown us that, most things repeat themselves. By understanding this dynamic of nature and market, this is how progress is made and money is gained.

Real estate fundamentals include scarcity, asset quality, locations and cycles - this has never changed. Adjusting the investment strategy to the factors that influence Real Estate prices such as technological changes, migration, inflation, interest rates, financial status, construction supply and planning is important for success.

This graph below shows the change in Australian house prices since the 1880's...

‍

‍

FACTS

- Since 1880's Australian house prices have not declined more than 20%
- Since 1880's after a crisis there has been expansion 1950, 1990, 2000, 2008, 2019-2021
- Since 1950's house prices have never declined more than 10% - not even during COVID.- Since the 1880's, real estate has been the best asset.

A house in Sydney in 1970s was 18k and interest rates were 7%In 1982 same house was 80k, with a 10x price increase.
Fast forward to today, this same house is 2m with rates at 3%

Over time property can protect your wealth, as it is an asset. Therefore, property is a hedge against inflation.

‍

‍

‍If the property market had a Facebook relationship status, it would be: COMPLICATED

It is very difficult to predict what the future will bring but the past gives us an indication of the future.

Currently in Australia there is high inflation and high interest rates. The RBA table belowshows the significant hike in rates:

‍

‍

Rates have increased in every past CRISIS whether GFC, tech bubble, oil crisis, financialderegulation, and the aftermath of COVID.
People are concerned with rates and inflation, but this is not different to what has happened in the past.

1990 - Deregulation boom led to recession - interest rates went up2000's - Tech bubble - interest rates went up
2010 - GFC interest rates went up

See the clock below... That's how the cycles work. It is not a coincidence; it is all related.

The cycle goes cheap prices, credit becomes available, market rises, higher confidence, increased demand, consumption, easier money, greater fool theory and then a recession.

Prices decline as they are too expensive, money gets tighter, confidence decreases, falling prices, less demand and then the prices adjust. The cycle then resets like nature itself.

‍

‍

This shows that history repeats itself and that all times moving forward will be similar but different.

CONCLUSION

- Interest rates on average over a 10-year period are around 4-5%.
- Investors need to have a 7–10-year horizon - there are cycles.
- Regardless of what the rate is, the asset needs to pay for itself or generates equity.

Over time, property has always performed if markets are down, prices outstrip inflation.Markets at the lower end of the cycle or on the growth period or affordable markets tend to generate better return or protect the capital better.
Rents are your hedge against inflation and real estate is your protection for capital appreciation.

You can see below that Adelaide shows the best data.
Sydney and Melbourne are tracked below and shows inflation rates.

‍

‍

‍The great Australian dream is NOT lost. YOU may be lost not knowing what to look for.

Invescasa is here to help.

Reach out!