I wrote a stronger title for this article, but my team told me to put $1 in the swear jar and made me change it.
And for the record, yes – I own some shares.
But they’re just a side thing.
For me, it’s real estate all the way.
And thanks to everything happening in the US, I’m glad I’m in houses, not shares.
Because no matter what your opinion on Donald Trump is, global markets are in chaos.
It’s An Ugly Time To Be In The Sharemarket.
As I write this, the ASX is trading at 7,781 points.
But 2 months ago on Valentine’s Day, February 14th it was at 8,555.
That’s a 9% fall in 2 months.
And who knows what the next surprise is going to be.
But it’s nothing new.
On October the 20th, 1997 the ASX lost 25% in a single day.
Back in 2008, the GFC hit and it sank 54%.
In 2002 it was the Dotcom bubble which burst, deflating the market 22% over the next year.
And more recently when Covid hit, the ASX lost a third of its value in a month.
Talk about bloodbaths.
When it’s good, it’s good.
But when it’s bad, it’s a disaster.
So, what about real estate?
During the first quarter of this year, hose prices rose 1%.
That’s right.
Despite all the turmoil, uncertainty and chaos …
… House Prices In Australia Just Kept Going Up.
Why is it that house prices continue to rise, even when the sharemarket goes into a tailspin?
It’s simple, really.
What Drives House Prices Is NOT What Drives Shares
With shares, the biggest drivers of the market are fear and uncertainty.
Add to this, company performance.
And the overall strength of the economy, both the local economy (primarily for retail) and the global economy for minerals we export.
But with real estate?
These factors surprisingly don’t matter that much when it comes to house prices.
What drives real estate are these 4 major things.
Demand.
How many people are in the market for a house?
Considering we all need a roof over our heads, this isn’t something we get to choose.
And with the population growing at 2.4%, people living longer and less people living in each household, demand continues to go through the roof (no pun intended).
Supply.
It’s no secret we’re not building enough houses.
The government’s promise to build 1.2 million houses in 5 years is so far behind it’s not funny.
And while there’s a slight trend upwards in building approvals, it’s not going to make a noticeable difference for a long, long time.
Source: ABS
Access to money.
One of the biggest drivers of all is access to money.
The more money that buyers can get their hands on, the more money they can spend on real estate.
With interest rates coming down, people can get bigger loans.
And house prices are going to keep rising.
Remember too, even when interest rates were going up, house prices were going up too.
This means when rates fall, house prices are likely to rise even faster.
With government co-ownership schemes, access to superannuation as a deposit and tax deductibility of interest for first home buyers all being talked about, the money is going to keep flowing.
Government support.
The government desperately need investors to keep building houses.
And to bolster the supply of rental properties.
This is why we’ve got incredibly tax friendly policies for landlords.
Also, the government are in the job of trying to win elections.
And falling house prices don’t win votes with home owners.
Plus, without wanting to be too cynical (although you have to be), 70% of all federal politicians own at least one investment property.
Follow the money, right?
The government have a barrage of policies they can unleash on the real estate market, ready and waiting in case the need ever arises.
The Clear Winner For Investors Who Crave Stability, Growth And Income
Frankly, I wouldn’t want to be relying on the sharemarket right now.
Not when every morning brings more headlines of doom and gloom from the US.
And sure, shares could rebound. It’s very possible they will.
But they might not.
Having said this, real estate won’t get knocked around by decisions coming out of the USA.
Those decisions are barely a blip on the radar.
There are a lot more important factors which drive the market.
Plus, when you invest in real estate, you’re in control of it.
You choose where to invest and the type of property you acquire.
Then it’s your house, with you calling all the shots.
And the market isn’t going to plunge 10% overnight because of a new tariff or trade restrictions.
It’s just going to keep on going.
The question is … are you ready to find out why real estate is the safest option as well as the option with the highest potential returns?
And are you ready to find out whether you could get into the market too?
When you are, leave your details below and we’ll call you up to schedule a time with one of our senior property advisors.
They’ll show you how to invest in real estate.
Why right now is such a great time to get in.
And help you put together a strategic plan so you can accumulate property and grow your passive income over time.
And of course, we’ll answer every single question you have.