MARKET WRAP: Issue 14: July 7th, 2016
The polls got it correct! Too close to call. It is certainly one of the most fascinating elections to exsist…. the longest, the wishy-washiest and with no one presenting, any real grand plan. The whole campaign consisted of the usual belittling of the other side and clearly, the electorate has had enough of it. We are sick of all of the infightings from both the major political parties, the beholding to interest groups and all of the horse-trading that is required by either side to get into Government and to stay in Government. It always seems to be that their own best interests are put before country when it comes to politics.
Is Australia Leading The Way?
It is clearly part of a worldwide trend, where voters are looking for alternates and out of fear, we are moving away from globalisation to protectionism. It is amazing that Australia is being held up as the example in the US and in Brittan of one of the best approaches to border protection and gun laws. Citizens of countries all over the world are confronting issues of terrorism, post GFC global economics and fear about their own personal circumstances, it is not surprising to see the rejection of old political ideologies that is starting to develop. As mentioned some months ago, It appears that we will no longer ever live in a world of certainty, due to the rapid changes happening right across the globe. However, we have to be very careful that we don’t end up in the chaos of conflict, indecision, divisiveness, rather we work for greater unity and harmony as we deal with all of the changes before us.
I am still a firm believer that Australia is the lucky country. We may well have placed ourselves in a position of political indecisiveness that clearly is a result of the swinging voters, turning to third parties, as a rejection of the two main stream parties. I am not sure that is the answer, however, trust that both main stream parties will start to learn lessons from the outcomes and result in modernising and rejuvenating their parties. This would ultimately attract thought leaders, as well as people truly focused on uniting Australia and creating a proper plan that is well communicated, which as a result, would assist in the masses to believe, understand and support.
How Is Real Estate Being Affected by The Mess?
Whilst all of that has been happening, the reality is that economies still function and sometimes despite Government policy and intervention. Looking at a quick snapshot of the five fundamentals of real estate we can see how the real estate market is currently travelling:
- Gross Domestic Price: GDP is still in good territory, having picked up during the course of 2016. Interest rates are at record lows and now forecast to drop at least once and perhaps twice through the remainder of the year by 0.25% on each occasion. That has to be a stimulant not only for the economy but the property market.
- Population Growth: Although the rate of population growth has been trending lower since the peak of 2.2% in the year to December 2008, our population has still increased by a fairly rapid pace. On current trends, Australia’s population is likely to increase by 378,000 over the next 12 months, taking our population to about 24.5million people! That will be a stimulate to the economy and a stimulate to the property market.
- Unemployment: Unemployment has been trending downwards in recent reports
- Housing affordability: Housing affordability has held at reasonably good levels, largely off the back of lower interest rates
- Consumer Confidence: A combination of all of the above produces consumer confidence. In terms of the real estate market, confidence has remained fairly strong. That was evidenced even last Saturday, which was election day, where in just a week before the election, auction results from around the country were at high levels. Even last Saturday on election day we had huge numbers turning up at open homes and lots of sales resulted.
It does seem quite amazing that so many people can now differentiate between what is happening on the political scene, as opposed to what is happening in the broader economic climate, and where is best to place their valuable investment dollars.
These are certainly interesting times that we live in and certainly unlike anything we have lived through before. The next challenging election will be the US, where people are rejecting main stream politics and looking for changes.
On a small note, i would like to extend to you a warm invitation to our annual Ray White Surfers Paradise Muscular Dystrophy Charity Ball. As mentioned last week, we have taken the event to the next level – moving to Jupiters, Broadbeach. With the move, it has enabled us to have a large space, which in that case we are now offering Gold, Silver and Bronze table options. This has proved to be a huge hit as we have sold more than 70% of tables already. I would love to have you join us at the event, so please come along. We have just announced that Ricki-Lee will be performing live, along with a couple of surprises on the night.
All information can be found on our website here, alternatively, you can contact Selena Carson on 0410 650 185.
Until a fortnight’s time, I trust you will enjoy life to the fullest.
We look forward to seeing you there. Well, that’s it for now. I will be back with you in July. Stay safe.
Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group