The X Factor

You probably have questions about the property market right now.

What will happen to your investment properties?

Is it a good idea to jump into investing at this time?

Now that the country is starting to open up again, you’re looking at real estate prices on the market and they look like they’ve declined.

But all that’s changing now.

And what’s the most important to look at when considering the potential risk of property investing?

It’s the unemployment rate. We call it the X Factor.

It’s the one thing that’s going to decide what the property market does.

The majority of Australian businesses, roughly 97%, have less than 20 people. This is the small/medium enterprise market.

Now, you can see why the recently-introduced stimulus packages target this sector. It makes up a huge part of the economy.

These businesses don't have the balance sheets of big corporations. Nor do they have that long line of credit to see themselves through for months on end.

And that is a key reason why banks reduced interest rates.

As an investor, you probably took advantage of those record-low rates. But they did it to stimulate the small business enterprise market. They want those guys to borrow money, take on credit, and expand their business.

Why?

Because once they do that, they can go out and employ people.

And the employed feel comfortable buying homes or signing rental leases. They help keep the market going. That’s really why you need to watch the unemployment rates if you want to gauge the pulse of the market.

It’s not a crystal ball, but one area feeds into the other. And you can get a better idea of what to expect in the future.

As far as I see it, the future is looking better than most people think. In fact, I’m finding opportunities to invest like you wouldn’t believe!