Ewan's Blog

Is it safe?

Tuesday 25 Aug 2015

Uh oh. What’s going to happen now? The sharemarket is wobbling precariously, making headlines and everyone is more than a little nervous about what lies ahead. The question I’m getting is whether or not that uncertainty might spread to the impact the property market as well.

My thinking? It might impact a little but certainly not a lot.

The thing about residential property is that it’s considered by many to be a safe haven in the midst of a financial market storm.

There is certainly a chance that further rumbles around the local sharemarket will impact the availability of funds for investment in property. It might lead to some potential buyers exiting the market as a result in changes to the value of the share portfolio.

However I believe there is equally real potential for new investors to also enter the market. If the sharemarket is shaky many will look to the stability of bricks and mortar to invest and the security of a property investment in Sydney is undeniable.

So at the same time as commentators are calling for calm in response to the movements in overseas markets I would also urge property investors not to panic if there is some evidence of a slowdown in coming weeks.

Remember to keep it all in context.

Demand has been incredibly strong for a sustained period of time. It has to ease simply because it is impossible for that pace to be maintained forever. It doesn’t mean that demand, or indeed prices, are on a death spiral.

It is still safe out there and whilst I don’t expect a massive spike in activity over Spring I do anticipate the warmer weather will mean more people opening their doors to the idea of buying.