Property Market in 2015
Apart from increased volatility, 2015 should not offer any tremor to the property investors. Growth can never be expected to match the pace it has marched with in the last couple of years and things are only likely to be a lot saner. Yet investors will feel relaxed and easy coming into 2015.
Themes worth noting
A few themes worth taking note – the myth around inflation and recession, concerns regarding falling commodity prices, below par real growth in Australia, uneven growth globally, and rapidly devaluing Australian currency.
There are certain risks which need evaluation, too. Among them, a knee-jerk reaction in the share market to Fed rate hikes is most worthy of analysis. Property bearishness in China can force our real estate economy. Europe may face another fiscal crisis. And then there might be a bubble along different asset classes, given our search for return and yields beyond what is available. However, we can take heart from the fact that there is always something up on the horizon, waiting to build into a full-scale rumour, isn’t it?
The consumer sentiment index has rallied well in Australia and things may not get any dicey on this front. Yes, there are valid threats to the property market and some of them are too close for our comfort- case in point being China’s real estate, but there is every chance that we will keep carrying the momentum forward.
Reasons to be cheerful
There are definitely more than a few reasons why we should be optimistic about our nation. Interest rates have been near unprecedented lows. Export volumes are high and they can almost offset the fall in commodity prices. There has been a major drag in growth which incidentally is marginalised by the devaluing $A.
And lest it be missed, Australia has made a near smooth transition from mining-oriented economy to one that is based on real estate, retailing, tourism and manufacturing among other things.