The Power of One!
Updated: Jun 27, 2020
I show my age a little when I recall interest rates at 16%. That is very close to the rate I paid for my first mortgage over twenty five years ago. But it also a demonstrates how far the Sydney property market has come in the years since “The recession we had to have”. For interest rates since then, its been (pretty much) all downhill, for property prices its been mainly uphill.
But, with the RBA cutting the cash rate to just 1% this week, you don’t need to be Einstein to know that there isn’t much future in this story. Despite the media focus on the prospect of another cut in the coming months, I was more interested in the Reserve Banks broader message to the Government. SPEND!
With the monetary policy strategy all but exhausted, the Morrison government options to stimulate the economy will need to find new avenues. The imminent passing in the senate of promised tax cuts (stretching over the next five years) is one such tool but will it be enough? If the answer is ‘No’, they may end up heeding the RBA Governors advise to spend.
Had Labor won in May, it wouldn’t have been a problem. A scatter-gun cash spray is what they do best. But Morrison/Frydenberg will need to decide how to inject a few billion into the economy and my bet is it will be through infrastructure.
I love infrastructure! It always creates opportunity in the property market.
Imagine if you owned a house within a couple of kilometres of the Randwick or Kensington light rail hubs? If you do already .. well done! Whilst its been a slow build and expensive, those properties are a few short months from being way more desirable. The North-West metro will undoubtedly do the same for the Hills district. Sydneys second airport is a bit further off, but in 10-25 years … I suspect it will be a thriving hub to rival Parramatta and the surge in property interest in the region already is testament to that.
SO … the million dollar question. Where do you think a Federal Coalition Government will choose to spend a lazy billion or three? Seriously, I’d love to hear your thoughts, so please comment here or contact me directly and let me know your prediction.
There is always value in great property. Find it. Buy it. Love it.