Is The Sky Really Falling In?

During my usual browsing of financial and property related news, I stumbled across this article during the week. It’s certainly a unique take on the state of the market, from the perspective of someone usually focussed on the equities market, specifically small cap stocks.

The metaphor of the drinker simply ‘blowing the froth off the top of their beer’ is one I especially enjoyed.  Yes, markets in Melbourne and Sydney are currently experiencing a tough period after multiple years of extraordinary growth, however this has simply created some buyers remorse for recent purchasers, and opportunity for those ready to purchase now.  It also allows long standing and reliable developers to ‘reset’ as the cowboys and speculators exit the market with tails between their legs, creating acquisition opportunities in readiness for the next growth cycle, or shock horror – a ‘normal’ market.  The reality of media reporting on property over time is that in a perennial search for clicks, the market is either in a boom or a bust – a normal and stable market (like Brisbane for the past 5 years) has apparently ceased to exist!

When it comes to property, another quote that closed the article was something we should take into 2019.

“If prices are falling off a cliff – which they are not – it is a very impressive cliff of their own making.

Long term investors should be cautious but should not lose focus on the wealth building nature of the cliff rather than the potential to fall off it.”

Andrew Thomson

General Manager, CFMG Capital

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