Australians love residential property and many view it as a relatively low risk investment with the potential for impressive gains. Just look at the price increases over the last 10 years. But what about the future?
‘As safe as houses’ is the expression that comes to mind. There’s a strong narrative in Australia about the importance of buying a home rather than renting and ‘paying off someone else’s mortgage’. This psychology underpins Australians’ love affair with property. And of course the property price increases over the last decade have validated this view for many—particularly, if you live in Sydney or Melbourne.
From an investment perspective, I think Australians feel comfortable with residential property as an asset class. More so than they do with other forms of investment, like sharemarkets. It stands to reason because people live in homes and keep an eye on property prices. They think they know how much residential property is ‘worth’.