It’s all about keeping up, keeping ahead of the curve, and being an agent of change

Almost to spite the doomers and gloomers such as the international investment banks, the latest CoreLogic home value index results shows that nationally residential property values remain 18% higher than they were five years.

Even the Australian Stock Exchange’s Long-term Investing Report continually reveals why Australians love real estate. In the 2018 report, over 20 years to December 2017, Australian residential property produced an average annual return of 10.2%. In comparison, shares returned 8.8%. Over a shorter ten-year period, property again wins handsomely with an 8% average yearly return compared to 4% for stocks.

No wonder the international investment banks continually obsess about the state of our property markets, which continue to sensibly attract investor capital away from the clutches of their wealth managers.

Ok, the 0.7% decline in national dwelling values in February takes the cumulative decline in the value of Australian real estate down by 6.8% since values peaked in October 2017. However, as CoreLogic suggests, most homeowners remain in a strong equity position, which once again demonstrates why quality, well located residential property remains Australia’s favourite asset class.

Why is property Australia’s favourite asset class?

As we’ve seen time and again, real estate has proven to be a very stable investment when compared to shares.

Sure, the real estate market experiences cyclical ups and downs. However, property tends to be a lot less volatile than other asset classes. For example, the Australian share market fell almost 3% in a single day in October 2018, and the ASX200 index plunged more than 7% on the infamous Black Tuesday in January 2008 during the Global Financial Crisis.

These share market falls are due to any combination of political or economic factors in Australia or overseas. Share volatility also underlines the fact it takes longer to sell a property, while spooked investors can offload their stocks in seconds, and often for no apparent reason. In October 2018, after the share market selloff, one prominent stockbroker told the ABC, “There was no particular news overnight to explain the sudden market drop.”

Moreover, property is almost always in demand with owner-occupiers such as first-time buyers, upgraders and downsizers. In Australia, it is also a well-known fact that population growth is outstripping supply and we can’t develop housing fast enough. It is this combination of factors that continue to underpin real estate values and long-term growth.

Why Raine & Horne Commercial?

Our full-service commercial real estate network can provide in-depth knowledge of local and regional property markets, with insight and understanding that comes from being a part of a long-established national and international property group. Committed to personalised service and achieving unsurpassed results, our clients continue to benefit from our network strength, which allows substantial cross-flow of international referral, advice and investment.

The Raine & Horne Commercial network is comprised of 100% owner-managed offices and includes numerous industry leaders and award winners. We employ agents who are empowered, encouraged to share and who maintain first rate communication to deliver the best possible outcome with every transaction. We pride ourselves on staying abreast of local and national trends and developments in the property industry, resulting in consistently cutting-edge services and holistic solutions for our clients.

Our industry experts embody and respect the family-oriented values synonymous with the Raine & Horne Commercial brand, allowing us to provide a complete range of professional services for all aspects of commercial, industrial, retail sales, leasing and specialist properties.