I read a fabulous article recently by Rob Ingram who quotes author Peter De Vries who is credited with saying that “nostalgia isn’t what it used to be”.
But I disagree. If anything is going to conjure up a bit of nostalgia for me, it’s property. In times of global unrest, insecurity around jobs, the future of the nation, lack of political vision and out-of-reach property prices, it is property that makes me reminisce.
With the most recent real estate results here in Victoria, with over $18 billion of property changing hands year to date, which is not only the highest ever, but 29 percent up on last year!
Property demand is not only at an all time high, but so too today is privacy. People are seeking privacy more than ever before. No longer do young people particularly want to share with others, they want time out and space; even if it costs them a great deal of their wages.
As a nation, we are seeking retreats both in the city and in the country to escape the madding crowd and find a bit of downtime. For this reason, our personal space is more in demand than ever before. If we can find a tiny spot to retreat too, to enrich our minds, escape the week and calm the soul – it is property that enables this fulfillment. A terrace, a patio or a private garden; even a study nook are all sought after.
But we need to be mindful that our happy associations don’t fall into the past – a combination of hope and regret. With property prices being almost out of reach for the average Australian, it requires some serious evaluation.
I recall a time when I was working for a Hastings Street Real Estate Agency during a sabbatical in my career and I overheard a couple voicing deep regret at missing out on the Noosa Market. They recalled prices of two bedroom apartments being $235,000 and now they were $285,000. Today those apartments are worth around $585,000.
It’s a strange sensation to look back now, with the benefit of hindsight, on property performance and growth over the past few decades, like a hand waving from a train that you wanted to be on, a missed journey of lost opportunity and regret for some.
Last week, a young man came into my office terribly distressed at paying what he and his fiancé believed was $30,000 above market for a house in Greensborough. They felt that it would hinder their priorities of moving down the investment path and delay their wealth creation plans for the future, saddled with a larger mortgage.
The pressure on young people today is enormous. For decades, my European friends have been saving to help their children get into the real estate marketplace. It is a given that property is so out-of-reach overseas, that unless they have assistance, it won’t be possible.
We are suffering a great deal of nostalgia, and it may take a few generations to catch on; that Australia the lucky country is now part of a global scene. We cannot escape the reality that real estate is one of the most valuable and expensive commodities on the planet.
Once we have transitioned into owning real estate, the world treats us differently, particularly in the world of finance. You can bequeath it; you can borrow against it; you can capitalize on it and you can earn a passive income from it. Real Estate – the new four letter word!
What is hard for people is to understand the probability factor that property will continue to increase in value. With peaks and troughs, bubbles to burst and all the other hype and language associated with Bull and Bear markets; property continues to increase in value.