Episode Details

As we enter a new year and the beginning of a new property cycle, there are still many mixed messages in the media leaving many investors and potential homebuyers confused.

Hopefully, by the end of today's show, you'll be a little less confused because I'm going to ask Dr. Andrew Wilson, Australia's leading housing economist, some of the questions you're probably thinking about.

But before that, we're going to discuss some lessons that we've learned in 2019 that will make you a better property investor in 2020.

I also have a mindset moment to share about things I would have liked to know earlier.

4 Property lessons

As we enter a new year and in fact a new property cycle it's interesting to look back at 2019 and see what lessons we can take out of 2019 to make 2020 a better year in property.

Let's take a look at 4 property takeaways from 2019:

1. Be careful whose forecasts you listen to.

What happened to all those predictions of 40% house price falls for the Australian property markets?

Lower interest rates, a miracle election result and looser lending criteria saw the property markets in our 2 biggest capital cities surge in the second half of 2019

2. Property investing is a game of finance - with some houses thrown in the middle.

This became clear as APRA tightened the lending screws on property investors from 2014 through till 2018 causing the biggest decline in our property markets in modern history.

Then when the banks' lending criteria became more relaxed and interest rates fell in 2019 our housing markets rebounded strongly.

3. There is not one "Australian property market".

While the fundamentals of strong population growth and the wealth of our nation will underpin the Australian property markets, there is not one "Australian property market."

Each state is at its own stage of its individual property cycle and within each state there are many markets segmented by geographic location, dwelling type and price point.

4. Expect the Unexpected.

Every year an unexpected X factor comes out of the blue to undo the best laid plans – some on the upside (like the miracle election result in mid-2019) and sometimes on the downside. Sometimes these are local issues and at other times they come from overseas. However, over the long term our housing markets are driven by the fundamentals so don't make 30-year property investment or home buying decisions based on the last 30 minutes of news.

Bonus Lesson: The property market is not a get rich quick scheme, however those who own well located properties will benefit from the long-term growth of their properties. As Warren Buffet wisely said: "Wealth is the transfer of money from the impatient to the patient."

An expert answers your property questions

While our property markets are entering a new property cycle, currently there are lots of mixed messages in the media – some positive and many negative.

This has led to many listeners to our podcasts leaving questions and asking for clarification.

So, in my chat with Dr. Andrew Wilson today I'm going to ask him to answer these questions which, if you're interested in property, are likely to be on your mind also.

1. Is Australia going to fall into recession in 2020?

During 2019 the RBA realised that the Australian economy wasn't as rosy as it had hoped.

The labour market deteriorated, unemployment rose, incomes growth languished, inflation failed to increase, and our GDP slowed down despite 3 interest rate cuts.

It was really only mining sector and government spending that kept our economies head above water.

But as the year finished off, the latest labour market data at the end of the year showed a slight fall in unemployment and jobs growth albeit mainly part