Aussies ‘compelled’ to invest in property or watch savings dwindle
Money is cheaper than it’s ever been on the back of a favourable interest rate environment, compelling Aussies to shift away from other types of investment vehicles and into property investment.
Non-traditional property investors are looking to pounce on the favourable interest rate environment and dabble their feet in property, founder and director of Rethink Investing Scott O’Neill has said.
While those needing to borrow money have interest rates on their side, those who traditionally keep large reserves of cash in other instruments – whether bank savings account or fixed-term cash products – are seeing their returns dwindle.
Both groups are now eyeing property, Mr O’Neill noted.
Speaking on a recent episode of The Smart Property Investment (SPI) Show, he opined that 2021 is going to be “a very positive year for property”.
“You’re almost forced to invest or you’ll see your money dwindle away in a bank account. And that’s a concern for people. So, investing, you’re almost forced into it when interest rates are this low,” Mr O’Neill said.
He cautioned new buyers, however, to beware of overpaying in the current market.
“2021 is it’s looking like the busiest, most high demand market I’ve ever seen. And it’s off the back of people not knowing what to do with their money. Confidence has, like I said, hit a seven-year high, and that’s trending upwards still. You don’t really meet anyone who’s talking down the property market anymore,” said Mr O’Neill.
“I think 2021 will be quite a good year for capital growth. But you got to be careful in these markets because you might overpay.”
Noting that “you’ve got to pick the right pockets”, Mr O’Neill added that 2021 will birth capital growth on the back of low supply and high demand, with lots of Aussies now very keen to invest.
“I’d say it’d probably be the best year for property in the last decade, I’d say. So that’s my prediction.
“But don’t just buy because you think it’s going to grow 5 per cent in the next six months. It’s about buying with the right fundamentals. So, back to business and that’s going to be good for property,” Mr O’Neill concluded.
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