Housing Boom

I don’t know what the immediate future of the Sydney (and other Oz capitals) property market is.

Will it continue to boom? Historically low interest rates, poor stock market performance and the need to increase suburban densities suggest business as usual. Superannuation and commercial/industrial property funds are adding asset allocation pressure as well.

The counter argument points to rising vacancies (with falling rents), and the obvious disconnect between household wages (or rents achieved) and property prices.

Every past property boom has corrected. Why would this one be any different? I just don’t know when and by how much the correction will occur. Therefore I don’t know anything, right?

My guess is provided credit remains “easy” there should be a soft landing. In the meantime the market could surge ahead enough to counter the correction. Waiting around for the market to bottom could be an expensive exercise in missed opportunities.

How do I use this? Have a plan of action in case things go worse than expected. What will I do with my investments, my residence an my business if the market corrects? If the worst occurs then I’ve got a plan. If things keep booming then I’ve lost nothing.

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