A confluence of factors seems sure to push investors back into the property market and therefore drive up property prices, according to analyst Michael Matusik.
When considered alongside the incredibly low mortgage rates on offer, the volatility of the share market and paltry return on money being kept in the bank seems sure to make investing in the property market “more appealing than ever”.
“It is an exciting time if you are a property investor because accessing money is cheaper [than ever before] and there is some assurance from the Reserve Bank of Australia that is not going to change in the near future,” Matusik said.
As such, the analyst has boldly predicted an approximate 5% rise in property values over the next 12 months, despite other market commentators putting out very different figures.
“When the cash rate drops and it becomes cheaper to borrow money, it actually pushes house prices upwards,” he insisted.
CEO of property investment company Custodian, John Fitzgerald, believes Matusik is correct and the drop in interest rates will indeed kickstart the property investment cycle again.
“Many investors have sat on their hands during the COVID-19 pandemic, [but] I think this will be the incentive to bring them back in,” he said.
“People who put their money in the bank are getting nothing for it. We’re increasingly likely to see the next stage of quantitative easing with the US election result and most of Europe going back into lockdown.
“There is going to be a flight to fixed assets and that will drive up prices. I’m predicting as a result the Australian median house price will hit $1m in the next three to five years.”