The Lifestyle Guide 2018

LIFESTYLE GUIDE 10 Recent media reports of cooling Sydney property prices came as a relief to investors and owner-occupiers alike. But as prices stagnate, many begin to wonder – will the market really fall hard? Should we wait for a ‘crash’ to snap up a bargain? On a macro level, it would take a combination of three economic indicators to cause a market fall of 20% or more. These are high unemployment, high interest rates and land/build oversupply. The bottom line is: none of these indicators are on the horizon. On a micro level, we’d do well to remember that there is no such thing as a ‘Sydney housing market’. We are a region comprised of many individual markets/ suburbs, each performing differently in terms of median price, capital growth, vacant rates and rental return. Generally speaking, it’s reasonable to anticipate softening prices in high-density, well- supplied apartment markets and equally reasonable to see resilience in suburbs with significant amenity and short supply. A cursory review of the action across various suburbs and segments during previous property cycles may give insight into future performance. There’s also the experts’ opinion. Louis Christopher of SQM Research in his 2017 Boom and Bust Report concludes that significant falls in Sydney house prices are unlikely – rather, anticipating moderate to healthy single-digit growth in the short term. Conversely, BIS Oxford Economics forecasts Sydney median house and apartment prices to fall 4% between now and 2020. So far they have been correct as Sydney endures a fifth straight month of price declines. Regardless of differing short-term views, the consensus is that longer-term demand for housing is well supported by migration, low interest rates and an overall lack of new supply – of land and free- standing dwellings in particular. With excessively optimistic prices just behind us and uncertain times ahead, savvy investors must be especially diligent with strategy, research and acquisition. Ultimately, waiting ‘for the crash’ is not an option. Now is the time to buy – but buy well. That means doing your homework to predict future growth areas and to uncover those investment opportunities with attractive yields. Daniel Sofo Daniel’s mission is to help his clients create substantial passive income through property. Ask him how – In recent decades, the media has continually made a meal out of a hypothetical property-market crash. Yet, the reality is that the market continues to thrive. Daniel Sofo from DPN gives us his thoughts on this. Thinking of investing but waiting for the property market to ‘crash’? Think again.