Not All Doom & Gloom In Property – Growth Set To Continue

With property media reporting as with property itself, there is always a diversity of views according to First National Real Estate CEO Ray Ellis.

“If you just read the headlines of the paper or listen to the promos for the news it would be easy to think Australia is heading downhill, but certainly in property this is not the case”, says Mr Ellis. “We conduct a substantial review of property performance and issues across Australia and we see another year of growth in 2008. Every boom has to be followed by a correction and if growth continued at its previous rates then we would be in difficulty. But the truth of the matter is the market was perhaps overheated and a slow down in growth does not mean growth will stop. In fact, we are predicting another good year in 2008” said Mr Ellis.

Although official rates and, it would appear, new mortgages from the major banks are slowing, there are still other loan options out there. The December quarter saw a 24 per cent increase in mortgage brokers’ business driven by new loans which may indicate a move away from the big fourbanks. Cannex lists 24 five star packages (some with interest rates below 8 per cent) so there is still money available if you want to get into the market and now with the prices more reasonable than they have been for some time is the time to get started.

On top of this, the new Federal Government First Home Saver Account will help boost savings for a home loan deposit with the addition of government funds. These incentives give first homeowners a reason to start looking at the market.

“Although interest rates are higher than they have been, they are not as high as they have been in the past” says Mr Ellis. “The key is not to overextend yourself by loading yourself up with lifestyle rather than property debt. Property will always be a good long-term investment if you buy sensibly and do not borrow money for items such as furnishings and lifestyle that you cannot sell. Make sure your mortgage is related to the property, not the life you live inside it,” recommends Mr Ellis.