What incentive is there?
It appears the world is going to hell in a handbasket.
Against this tide of tragedy and woe, our little life raft of positivity in Western Australia is a beacon of hope. The uncertainty in Eastern Europe continues to apply upward price pressure to commodities. Our state’s engine room is driven by the vagaries of the international commodity markets, and right now things are good for WA.
Whether it is wheat, iron ore, lithium, nickel or rare earths, we are firing on all cylinders. This contributes to the significant shortage of housing, and the strong real estate prices in WA. In a state short of labour and materials, the residential building industry cannot compete with the increased wages of the mining industry.
Unfortunately, inflation often appears in low interest rate environments — like in Australia right now — where the cost of borrowing is cheap. With inflation well and truly in the mix, established residential real estate could be just the insurance policy you’ve been looking for. Real estate is a potential hedge against inflation. This is one reason Mum and Dad investor interest is starting to kick off, even against the backdrop of a heated real estate market.
In the long term, inflation and housing tend to move in the same direction.
Inflation usually pushes up wages, which in turn increases money available for renting and buying.
Is it time for you to invest in real estate?
– Derek Baston