Everyone knows the Aussie Government has been happy to stimulate a Australian housing bubble, what happens when it's no longer in their interest?
Governments have only propped up the housing sector because it has been in their interest to do so. But what happens when it’s no longer in their interest?
Now everything seems fine with the markets again. But it always is…until it isn’t. That’s why it pays to prepare for unpredictable and unexpected events — they happen when few expect them to happen.
The loss of the AAA credit rating won’t see interest rates head higher, and won’t cause banks to increase loan rates. So, it won’t crash the housing market.
Something tells me that before 2020 (possibly as soon as next year), this bubble we’re living in is about to meet a pin.
Rentvesting refers to renting out your property while you rent somewhere else. I.e. rent out your home for more than it would cost you to rent yourself.
Australian Real Estate Investment Trusts (A-REITs) have come under pressure of late. And Scentre Group [ASX:SCG] has been no exception.
The question now is this: If interest rates go up, making mortgages pricier, will households be able to service the mounds of debt they’ve taken?
If history is any guide, the ‘High and Mighty’ property headline should be a warning to get your house in order. The curse looks set to strike in Australia.
Lower interest rates do encourage buyers in the property market. But there’s something far more important to property prices that is commonly overlooked...