I am researching for commentary about Brexit and the impact on our property investors. I came across Peter Esho’s radio program ‘Talking Property’ on 2UE with Bill Woods on Monday and I couldn’t have found a better way to put the following myself:
In summary, Peter points out the fact that this time last year we experienced the fallout from the Chinese stock market collapse. But a couple of months later we have forgotten about it and this year we face ‘Brexit’. Peter goes on to explain that “One thing I do know is that central banks around the world are committed to supporting the financial system”. This means that the interest rates are likely to continue falling. So regardless of what happens, the general sentiment is that low rates will remain at play for a longer period of time.
Peter also said that he won’t be surprised if the reserve bank of Australia passes through a 25 basis point cut over the next couple of months. The low-interest rates will support the investment market and the economy will move along.
“The UK will look at diversifying its trade. It might look at Asia to offset what’s happening in Europe and if they look into Asia, Australia is a huge beneficiary because we are a commonwealth member on the doorstep of Asia and we will benefit from that shift. Net-net there will be downward pressure on interest rate and we are relatively immune from it with potential upside”
If you have been waiting to get into the property market for the first time or contemplating on your next property, the next 4 to 6 months will prove to be a very interesting time. It might even prove to be the difference between an exceptional return on investment vs a good return on an investment. The signs couldn’t have been clearer about a more favourable rate environment is here to stay.
The banks appetite to lend will play a big part. The fact that most banks have stopped lending to non residents is a great sign for us locals as this gap will now have to be filled by local borrowers. Westpac recently started lending 90% to investment property borrowers after pulling out completely from the non residential market. There are various lending products to cater to a variety of borrowers in the market. It’s a matter of looking for the right product.
The state governments are investing in roads and infrastructures to drive employment and growth. The population is projected to double in the next 45 years (48.3 million by 2061 as per ABS).
Glass half full version about ‘Brexit’ = Opportunity to boost your property dream. Don’t let anything hold you back.
Disclaimer: This blog post has not taken into account your objectives, financial situation or needs. Due to this, before acting on any general advice/information in this communication, you should consider whether it is appropriate to your objectives, financial situation or needs.