The flood will collapse the Brisbane boom!
The property boom is over!
Home price fall again!
Rising interest rates will cause prices to drop by 15%!
It’s almost a ritual now. Did you know that the media has declared the end of the Australian property boom five times based on data from a single source in the past 14 months?
They have been consistently wrong!
Should we then accept their forecast this time because they claim to be Australia’s property experts?
Here’s some food for thought:
- A staggering 90% of articles in the media about real estate are just recycled press releases.
- The media is often fed by press releases from organisations that aim to create a negative sensation.
Consumers tend to absorb the headline and make decisions based on that fleeting exposure.
Historical Insights on Rising Interest Rates
But what does history really tell us about rising interest rates and the property market? Contrary to popular belief, the history of Australia’s property market is filled with evidence that rising interest rates do not necessarily cause prices to fall. In fact, more often than not, they don’t even slow down the property market.
Consider the period from 2002 to 2008, during Australia’s last national property boom, when the variable home loan interest rates increased 22 times, moving from 6.3% to 9.5%. Despite these rising interest rates, the median house price more than doubled in most locations during the same time frame.
Current Market Drivers Beyond Interest Rates
Looking at the current market scenario, it’s clear that factors other than low interest rates are driving the market. Major government spending on new infrastructure is underway, signalling strong governmental support for urban development and connectivity, which historically benefits the property sector. Additionally, the return of investors to the market, coupled with steady interstate and overseas migration and a lower than predicted unemployment rate, are all contributing positively to the dynamics of the property market.
The Impact of Major Events on Local Real Estate
Moreover, the upcoming 2032 Olympic Games in Brisbane is a significant event that promises to bring a plethora of opportunities and developments to the region. Such an international event typically results in enhanced infrastructure, increased global visibility, and a rise in property values due to the improved desirability of the location.
Looking Ahead: What Rising Interest Rates Really Mean for Investors
In conclusion, while rising interest rates are a factor to consider, they are just one part of a complex matrix of elements that influence the property market. The current economic indicators, combined with strategic developmental plans, suggest that the Brisbane property market is poised not just to withstand the impact of rising interest rates but to thrive amidst them.
So, before you let the sensational headlines sway you into panic-selling or stepping back from investment opportunities, remember to look at the broader economic context and long-term trends. The truth is, rising interest rates often signal a strong economy, and a strong economy bodes well for real estate values.
Conclusion
While rising interest rates may be a factor in the property market, they are far from the sole influence. A range of other economic drivers, such as government infrastructure spending, strong migration, and the upcoming 2032 Olympic Games, indicate a thriving market ahead. Don’t let sensational headlines cloud your judgment – long-term trends suggest that Brisbane’s property market is resilient and well-positioned for growth, even amidst rising interest rates. Keep an eye on the broader picture to make informed investment decisions.
Be better informed to make better decisions on your property journey.
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