Booms and Bubbles seems to be the topics of the year so far.
A very different rhetoric from the same time last year when it was all about being locked up and staying protected from each other.
On the show this week we covered the topic of ‘How big will the bubble become?’ You can watch the repeat here.
However more relevant to property markets is, how far will the boom take me and my property?
I have often talked about my own personal experiences in Scotty’s Scribbles and this time is no different.
In 2017 my wife and I bought our current home. Using the info I had access to and my belief in overall property cycles, I knew that we didn’t buy at the bottom of the market, but we sure didn’t buy at the top either.
At that time acreage property sales were neither great nor poor. Fairly balanced is how I would describe it.
I jokingly said to Mrs Scribbles that by the end of the next boom, (the second half of the current cycle), our property would be nudging double the price that we paid.
It was a fun time for all.
3.5 years later and our property has already increased by 50% in market value.
From its current value, it needs to increase another 30% to hit my semi-serious comment about doubling of the price.
Will it do that?
I don’t know, but from the position I sit right now, anything is possible.
(for a refresher on what part of the cycle we are in click here)
Another way to look at the price changes is that for you to buy my home now, takes 50% more money than it took me 3 years ago.
So did my house go up in value, or did your money go down in value?
Back to the boom.
The US is busy printing money and has sent $1.9 trillion to citizen bank accounts with other stimulus packages to follow, like $2 trillion for infrastructure development.
Lots and lots of money.
Australia is no different and we know that tons of money was spent by the government during Corona and is still now being spent after. More for infrastructure and other nation building plans.
Sounds like an episode from Utopia.
I am certain that the next budget our government delivers will not come anywhere near to operating in ‘surplus’ or with cash reserves.
The focus will be on getting back to normal and the strength of our nation.
We as people, will be in support of getting back to normal and the measures the government take to make it all better for us.
That is why, directly or indirectly, we will cause the boom to continue.
It is all your fault.
Remember that immigration has not started back up again. When the miracle vaccines are rolled out to cleanse everyone coming into Australia, people will flock to the safest nation in the world.
With building approvals only now ramping up (long lead time), immigration to be turned back on, massive fiscal spending and the will of the people to live their life fully by spending up big, this boom has some time to run.
I am not spruiking property, or telling you to buy or to sell, these are my comments on the market.
We all agree we are not at the bottom of the market, but I am certain we are not yet at the top either.
What do you think?
And more importantly, what are you going to do next?
Are you going to use this time to profit from the injection of cash into the economy?
Or will you batten down the hatches to ride out the storm you see coming?
Since 2004, Scotty North has been helping people buy the best properties for their needs at prices that simply speak for themselves.
Scotty has been instrumental in bridging the gap between financial planning and traditional real estate transactions through his property advice model.
Scotty North is a Qualified Property Investment Advisor (QPIA), with accreditation’s in financial planning, mortgage broking and real estate.
By carefully considering his clients’ goals and planning for market changes via demographics and trends, Scotty designs a future proof outcome not only specific to the client’s needs but dynamic in its execution with performance indicators and exit strategies built in.