Grays Property Anatomy - 01 Jan 1970
Our parents always thought, if you want to retire early and be financially free then you had to be debt free. Society says the same: ‘debt is bad and evil’. This might be true and a safe option for the average person but for those that want to create even more freedom and choice in their retirement, it doesn’t have to be the case.
Most people spend a lifetime paying off their mortgage and when they finally do, the banks say ‘why not use that dead equity to invest elsewhere?’ Instead of waiting to pay your first home off, why not invest now? Reducing your personal, non-deductible debt is a good thing - however investing in a second or third property will often make hundreds of thousands of dollars more than the few thousand you’ll save in interest paying off your home.
If you want to play things safe you should buy a home, pay it off, and invest from there. However, if you want to create an extraordinary retirement, you need to go against the crowd. Investing can be risky if you don’t know what you’re doing. Make sure you hire professionals who are making money through property investment themselves, rather than people who have the qualifications but aren’t practicing what they preach.
And remember, you’ve got to be in it, to win it!
To help us cut through the sensationalised, worst-case scenario headlines we’ve been seeing in the media, our first guest tonight is Eliza Owen, Head of Australian Research at CoreLogic. “Nationally, the dwelling market is still up 7.8% over the year and that’s been lead by a 13% gain across the Sydney market and a 10% gain in Melbourne dwellings, over the past 12 months” she says.
“Even just looking at annualized growth rates for the past 5 years, have shown pretty good returns of 3.2% a year for the past 5 years across Sydney and over 4% a year for the past 5 years across Melbourne. So overall, it’s a pretty decent growth story, particularly across those capital city markets.”
As to the markets most affected over the next 6-12 months, Owen says “areas and markets such as inner Melbourne and inner Sydney and those areas have been really affected because they have very high exposure to things like overseas migration as a source of new housing demand.” Rents in suburbs like Haymarket and Barangaroo in Sydney have fallen by 7% in the June quarter and likewise in Melbourne, suburbs such as Southbank have seen a 7% decline across the same period.
And finally, joining us to set the record straight on the much-trumpeted September crash is Josh Davoren, Operations Director at RE/MAX Australia. “I think I know better than to make any predictions of certainty” he says. “What I think we have seen in reality is some of the stimulus packages really help to give some certainty to the market place.”
“I think overall what that sees is a softening of any real potential shock and awe in the market and there’s really a big pent up demand from buyers still out there and I think some of that’s obviously benefited by the lack of stock that we’ve seen over the course of 2020 but there’s certainly buyers still out there.”
To find out more about what Chris and his special guests have to say, watch the Gray’s Property Anatomy above.
24 July, 2020
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