The doom and gloom just media hype?
Recent reports show that Australia is steering well aside from such recessions like many other countries such as USA and Europe.
We have been fairly resistant in the fight against negative growth and consumer confidence.
We are all too guilty of getting overly confident in a massive mining boom and the effects have been filtering their way through the country as consumer spending slows from the peaks in 2006 and 2007.
The two biggest talked about markets property and the stock market, have performed quite differently over the past 18 months. Some of the stock market values had 50% of there value wiped off in months of a selling frenzy while the property market has held up incredibly well considering the conditions. The governments stimulus to the first homeowners grant would have to be the leading factor in the price stability overall for property. The lower end of the market (up to 500k) prices have in fact reported some slight increases due to demand from first homeowners. We have had client feedback of good investment property harder to find in some locations as the first homeowners flushed out all the available stock with one real estate agent on the Gold coast reporting a stock shortage!
What does all this mean for the economy you might ask.
Well the grant has helped kick start the building industry into action and with this increases demand the land value has slowly increased with it.
Undeveloped land in Australia increased by 7.4 per cent in the march 09 quarter.
This is a new median price of $172,490according to the Housing Industry Association (HIA) residential land report
This is a key growth figure in terms of our recovery from all the “doom and gloom” the media just love reporting on with their scare tactics and so on.
Inflation for Australia is predicted to rise early next year and with comes higher food, fuel and inevitably a higher cost of living. Now that unfortunately is going to hurt our bottom line because with unemployment rising the wages are not increasing at all. So the gap is widening at a faster than usual pace.
The last killer blow will be rising interest rates predicted next year some time.
It is very important to budget carefully and manage you finances so you can grasp the opportunities coming in the new recovery. Many may be caught out however focusing on the future will prove very fruitful indeed.
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