Property doubles every 10 years

Property doubles every 10 years. Does it though? This is one of the most repeated assumptions in Australian investing. And for some areas it has been true. But not everywhere, and not automatically. What actually drove those returns? Households went from one income to two. Interest rates fell dramatically over decades. And banks were allowed to lend Australians more and more debt. Those three things combined pushed property values up. The question is whether those same drivers can happen again. Can we go from two incomes to three? No. Will rates fall back to historic lows? Unlikely. Can Australians borrow significantly more than they already have? Mortgage stress is already high. There is a ceiling. The assumption that property will grow at six to seven percent every single year needs to be questioned. Not because property is a bad investment, but because the conditions that made it exceptional may not repeat. Past performance is not a guarantee. Especially when the reasons behind that performance no longer exist. General advice only. Please consider your personal circumstances or speak with us before acting. Robert Goudie is an Authorised Representative (No. 235974) of Consortium Private Wealth Pty Ltd (AFS Licence 495401)

Disclaimer || The information provided in this post is general in nature only and does not constitute personal financial advice. Robert Goudie is an Authorised Representative (No. 235974) of AFSL 495401.