Why property investors shouldn’t fall for media fearmongering: the upturn is here

People have been predicting the end of the world exactly since… the beginning of the world.

It’s a natural human tendency to fear the unknown, and the media knows this.

That’s why they’re always quick to report on the latest disaster, the next big threat, or the impending doom.

It’s simply the nature of the beast.

As a property investor, you’ve probably encountered countless headlines forewarning the imminent collapse of the property market, each more sensational than the last.

But this is where understanding the nature of the beast is vital.

The media machine needs an audience.

It needs clicks and shares to survive, and nothing draws attention quite like a crisis.

The doom-and-gloom scenario is the bread and butter of many media outlets, as they know it triggers our primal instinct for survival, our amygdala, bypassing the rational part of our brain, the cortex.

They know that fear sells

Fear generates clicks, and clicks generate ad revenue.

It’s a simple equation.

Of course, there are times when the media is right to be negative.

When there’s a real threat, it’s important to be informed.

But it’s also important to remember that the media is a business, and they’re not always telling the whole story, so it’s crucial to differentiate between the noise and the signal.

You see, property is a long-term game.

It’s not about jumping at every opportunity or panic-selling at the first sign of a downturn.

It’s about staying the course, riding out the bumps, and focusing on the bigger picture.

Why property investors should not be scared off

The media’s obsession with negativity can have a real impact on home buyers and property investors.

When people are constantly bombarded with stories about the housing market crashing, it can be hard to stay positive and make sound investment decisions.

But it’s important to remember that the media is not always right.

In fact, they’re often wrong.

The Australian property market has been through a lot in recent years, but it’s still one of the best places in the world to invest in real estate.

So here’s the bigger picture as it stands today

1. Australia is in the throes of a housing shortage, a crisis that is set to intensify as our population is projected to grow by approximately 1.5 million in the next three years. This is creating a strong demand for properties to rent and buy.
2. In response to this shortage, property markets across Australia bottomed out early this year and are now on an upswing. This isn’t a short-term blip or a speculative bubble. It’s a fundamental shift driven by supply and demand dynamics.
3. Interest rates are near their peak, and while they will begin to decrease next year, they will remain relatively high for some time. This might tighten the borrowing capacity for some, but for those with a long-term view, it’s simply a part of the property cycle.
4. Inflation has peaked but will not fall into the 2-3% band that the Reserve Bank is aiming for, for several years. This might seem like bad news, but savvy investors know that real estate is one of the best hedges against inflation.

So, should you be scared of the headlines?

Should you bail out at the first sign of trouble? Absolutely not.

In fact, this is the time to dig in your heels and take a long-term view.

The property market is on the cusp of a new cycle, and the opportunities for those willing to stay the course are plentiful.

Yes, there will be challenges.

Yes, there will be risks.

But that’s the nature of any investment.

Residential property in Australia is a long-term investment.

It’s important to remember that prices will go up and down in the short term, but over the long term, the market has always trended upwards.

In fact, the value of well-located residential properties is doubled every 7 to 10 years over the last four decades.

This means investors who take a long-term focus are more likely to be successful.

They will be able to ride out the short-term fluctuations and benefit from the long-term growth of the market.

So remember, it’s not the media’s job to ensure your investment success. That’s your job.

Let them sell their fear.

As for you, stay informed, stay rational, and stay the course.

The property market has turned the corner, and for those with a long-term perspective, the road ahead looks very promising.

SOURCE: Michael Yardney’s propertyupdate.com.au   By Michael Yardney  15/7/23