“I don’t think the Australian market is going to crash. It will of course follow market cycles and will go through corrections of 5 to 10 per cent as it is experiencing at present …
The Australian and US markets differ greatly from a tax and financing point of view but when we dig a bit further we find there are also significant demographic differences.
While culturally the two countries have many similarities, their societies live quite differently. In Australia, more than 70 per cent of the population live in the 10 biggest cities. This ensures a very centralised market where the bulk of the population competes for scarce land close to major infrastructure.
This competition for a finite commodity puts pressure on the value of land and results in a more robust property market.”
So everything’s going to be fine.
Of course, it’s possible that the writer is biased. Mark Armstrong is an independent property analyst and adviser and director of Armstrong Property Planning. They design property investment strategies, and so would seem to have an interest in a stable property market. That doesn’t mean we should dismiss his advice out of hand – after all, everyone has a bias of some kind. Mr Armstrong could be right, or he could be looking at the property world through rose coloured glasses.
What do you think? Do you fear a crash in the Australian property market as we’ve seen happen overseas, or are we only going to see a mild “correction”?