Property Market about to Bounce?

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[Click on the picture above to see Murray analyse two property-related stocks that could benefit from the announcement late last week that APRA is lowering the hurdle rate for new mortgage loans.]

It looks like the powers that be are determined to get our property market shooting higher again sooner rather than later. We’ve had two interest rate cuts and now APRA has announced that banks can lend people more money based on the amount of money they earn currently. The hurdle rate for loans has been lowered from the previous level of 7%, which means the amount people can borrow has just increased by around 14% overnight.

Whether it’s enough to not only stop the rot but also to cause a new bull market remains to be seen, but that doesn’t mean property facing stocks won’t rally strongly in anticipation of good news ahead.

Two stocks came up on my quarterly scan last week that could benefit from renewed interest in the recovering property market story. They both cater to different aspects of the market and have different risk characteristics, but they have both been pummelled over the last couple of years and have retested their all-time lows.

Last quarter saw a buy pivot in both stocks, so my system is telling me to prick my ears up and start searching for entry points. I keep the actual calculations that I use to enter stocks such as this for members of Alpha Wave Trader, but in the video above I give you a quick outline of the technical situation in both stocks and show you the key levels above and below each stock.

I am not giving a recommendation to buy either stock at current prices. This is just for illustrative purposes only, so that you gain a better understanding of my trading process and hopefully learn a few things along the way.

Regards,

Murray Dawes,
Editor, Alpha Wave Trader

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Matt Hibbard is Money Morning’s income specialist. With nearly three decades in the markets, Matt has traded just about every asset class there is. The one thing that has stuck with him over this time is a very simple premise. That is, it’s the cash a company generates that ultimately determines its value. Sure, some stocks might fly away to multi-digit gains. But unless these companies can convert the ‘story’ into real money, the market will eventually find them out. And when that happens, the share price quickly falls back to Earth. Matt is also the editor of Options Trader, where he shows subscribers how to use basic options strategies to generate income. This is income they can generate on top of regular dividend payments. Matt doesn’t play the prediction game, where the aim is to be proven ‘right’. Instead, his goal is to generate as much income as he can for his subscribers, irrespective of whether the market is going up or down.


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