Looking beyond the headlines

Looking beyond the headlines
Looking beyond the headlines

OPINION:

The COVID-19 ordeal has thrusted a plethora of topics into the media spotlight and Australia’s property market is one of them. The sentiment seems to be largely negative, and understandably so, as we are certainly experiencing something unprecedented in our generation. 

With the economy in question and unemployment fears in tow, it is unsurprising to see headlines such as “House prices to tumble” grace our front pages daily. 

That being said, one needs to take a step back and think outside of the media. 
 
Property markets are, after all, cyclical. Uninterrupted exponential growth does not exist. House prices may fall but they also recover. In every period of financial market disruption – from the Asian market meltdown of 1997 and the tech boom crash of 2000 to the more recent GFC of 2008 – property has always rebounded strongly. 

Historically low interest rates will also play a big part in how the housing market will grow following COVID-19. In your lifetime, could you ever have imagined borrowing money at an interest rate starting with a 2?

What I can offer you is insight as someone who is experiencing the market firsthand. Week on week, our enquiry and interest levels have been getting stronger, and transactions are still occurring. These data are key indicators of whether there is an appetite in the market. If the current figures are anything to go by, one can only imagine what this will look like by year’s end as it will only improve as we move closer to reintegrating and out of isolation.
 
Now is the time to be on the lookout. You don’t necessarily have to be too opportunistic on distressed selling as they may not be as forthcoming as one might be expecting, given the low rates together with assistance banks have provided. Instead, I encourage you to look at what the market rate is and capitalise on the lack of competition to get better terms.
 
With rates so low, this is a rare environment for an investor where in most cases, property will be cash flow positive. This market has self-corrected the Negative Gearing debate as there won’t be any.
 
Simply put, this period does not need to be too dramatic, but rather a time where clear thinking can lead to great opportunities. At the moment, there seems to be a healthy number of people thinking the same, but it is just not being reported. 

My advice to everyone with skin in the game is to stay calm, do your own research and don’t let the media headlines get to you. It pays to think ahead of the curve as that is how real gains are made.

Michael Lang

Michael Lang

​Michael Lang is an industry veteran with over 20 years of experience. He is currently a Sales Director at South Yarra-based agency Castran Gilbert. Having successfully marketed numerous off-the-plan developments, residential established properties, and commercial sites all across Melbourne, Michael has built a solid reputation as one of Australia’s leading Real Estate Directors.

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