The latest round of geo-political developments in the world has thrown chaos into the global financial and asset markets. As volatility increases in all sorts of unpredictable directions, the global supply chain has been increasingly straining due to various compounding factors. What is to come for the Australian property market?
The market is more confused than ever before with traders and investors trying to interpret all the moving factors that eventually affect market direction. The sentiment is, at the time of this article, bearish-biased, with majority of assets showing signs of weakness and the dollar trending up. There are also signs of slow-down of growth in the real-estate market, indicating that the exponential growth phase may be concluding in the short/medium term. The consolation so far is the fact that the RBA has continue to decide against increasing the interest rates, although there is a feeling of inevitability with New Zealand front-running the hike recently.
With the inevitable rate-hike on the horizon coupled with global market uncertainty and oil prices shooting through the roof, there’s good argument that the market is headed for a recession. Australian real-estate historically fairs pretty well against shorter recessions, but the unknown dangers of the length and depth of the next recession lies ahead, and with over-leveraged home-owners and investors facing more expensive mortgage repayments, we may be heading into a perfect storm.
It may be tempting to always be in action, especially when one is an investor. But sometimes the best strategy is to be an observer and hold out until the market indicates a clear direction. It is currently more challenging than ever to build or carry out renovations due to supply chain disruptions, which translates to pricier investments with potentially smaller returns as the market cools. Be diligent and strategic with builds and renovations in order to maximise your R.O.I. and mitigate risk.
Whilst supply chain disruptions have also impacted us, we are always here to help come up with the best solution for your requirements.