realestatebusiness logo

Breaking news and updates daily. Subscribe to our Newsletter!

Home of the REB Top 100 Agents
Breaking news and updates daily. Subscribe to our newsletter

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

rpm logo latest

Aussie property market was never in doubt, says expert

By Sasha Karen
02 June 2019 | 1 minute read

One high-profile buyer’s agent says the Australian property market is not in any danger of collapse, nor was it ever, despite significant uncertainty in the lead-up to the 2019 federal election.

Right Property Group’s Victor Kumar said the lead-up to the 2019 federal election saw property play a key role, prompting worry that negative gearing and capital gains tax changes might have driven substantial declines. 

But he said the market was never in any danger of reaching that point.


No chance of property Armageddon now

“There really is just the one fundamental that fully drives the property market, which is the availability of money. And [if] there isn’t liquid credit available, regardless of what fundamentals you have — whether it’s an oversupply, an undersupply, high yielding, massive infrastructure spend — if you can’t buy the property, its going to take a plunge,” Mr Kumar said.

As Australia has very liquid credit at the moment, property Armageddon is not likely to occur any time soon, Mr Kumar said.

Another factor that would contribute to a property Armageddon scenario would be an extremely large amount of an oversupply of properties, Mr Kumar said, and while there has been an excess of supply, it has not reached the levels necessary for large declines.

“We’ve got very strong fundamentals in our property market. We’ve got very strong fundamentals in our economy,” he said.

“We have one of the best economies available. Now, if you look at it from an inflation point of view, our inflation, whilst it is month-on-month on April was at zero, it isnt at a point where weve got runaway inflation.

“The last time we had a really major property decline, taking away the GFC, was in the [1988–89] market, which is the recession we had to have. And unemployment went into double digits at the time, and therefore, people lost the ability to hold onto property, they couldnt afford the loans because your interest rates started really tunnelling ahead and had several and immediate interest rate increases.”

Meanwhile, the opposite scenario is occurring at the moment, Mr Kumar said, where RBA governor Philip Lowe has flagged his intention to cut the interest rate sometime soon.

“So we’ve got all these factors that are pointing towards a property market thatll be a lot more buoyant rather than gluggy. Theres no doubt that the property market did reduce in its buoyancy because of the credit squeeze we had due to the APRA regulations,” he said.

“Weve got money thats been the cheapest its ever been since day dot, pretty much. And its likely that the cash rate will be reduced even more. Ive been investing for 20-off years, and I havent seen money this cheap for pretty much ever.”

While it may not be outnumbering or matching the oversupply, Australia’s solid population growth is yet another reason for Mr Kumar that the property market is not, or was not, in any danger of excessive declines.

“The population growth is increasing substantially because of one, the natural growth, but secondly, weve also got your migration, skilled migration that is certainly fuelling the demand, but it is highly unlikely that we will see any major declines in the property market,” he said.

No chance of property Armageddon before

Looking at the last four years, the government has spent billions of dollars on infrastructure, and plans to spend an extra $100 billion over the next 10 years, which for Mr Kumar is yet another factor that pointed to how Australia was never in fear of property Armageddon.

“If you look at Sydney, billions and billions of dollars being spent in terms of WestConnex, upgrade of hospitals, upgrade of freeways and all that sort of stuff, and weve got a new airport coming up,” he said.

“Look at Brisbane, same thing, weve got the harbourside development, weve got the rail network being worked on, and the airport being upgraded. You look at Melbourne, same thing, we got the rail network being upgraded, so that youve got the rail from the airport into the city, youve got a freeway upgraded, youve got the hospital upgrades happening in Melbourne as well, and these three markets are fairly big markets.

“Then you look at Perth, thats slowly starting to have a resurgence via the mining sector, and also, they have spent a huge amount of money in infrastructure to shore up the economy at the local economy there as well.”

Mr Kumar said that with the combination of these projects, and future projects to come, it would be “highly unlikely” that there will be a major slowdown in the property market, barring something unseen coming out of left field.

Aussie property market was never in doubt, says expert
aerial property reb
lawyersweekly logo
May 09, 2022

REB Top 50 Women in Real Estate 2022

REB is thrilled to present the Top 50 Women in Real Estate 2022 ranking, which sets t ... LEARN MORE

May 04, 2022

REB Top 100 Agents 2022

Now in its second decade, the REB Top 100 Agents 2022 rankings are the most revered s ... LEARN MORE

May 02, 2022

REB Top 50 Agents NSW 2022

Even a pandemic has not put the brakes on the unstoppable property market in NSW, whi ... LEARN MORE

April 27, 2022

REB Top 50 Agents VIC 2022

The COVID-19 crisis has not deterred the property market in Victoria, which has been ... LEARN MORE

April 25, 2022

REB Top 50 Agents QLD 2022

As the property market continues to roar in Brisbane and Queensland, the REB Top 50 A ... LEARN MORE

Coming up

rankings rankings


Subscribe to our RPM
mailing list


Do you have an industry update?

top suburbs

12 month growth
Bawley Point
Walla Walla
Byron Bay
Kiama Heights
South Hobart
Lennox Head
Subscribe to Newsletter

Ensure you never miss an issue of the Real Estate Business Bulletin.
Enter your email to receive the latest real estate advice and tools to help you sell.