Rental Yield Replaces Capital Gains As The New Buzz Word – Why Our Housing Market Will Not Collapse

I’ve been saying to anyone who’ll listen since April 2008, that we all just need to tweak our mindsets and stop expecting real estate to keep going up and up. Well, it happened property prices have stalled and moved sideways and suddenly everyone is panicking and screaming that the sky is falling.

But where a door is closed, a window is always opened if we can just keep our heads and look for it. Rents are still rising and interest rates are still falling. That means that for the first time ever we can profit from real estate without negative gearing and without capital growth – we have the rarest of all situations: positive cashflow! This will continue as rents keep rising due to a shortage in property. Apparently we have a shortage of some 30,000 dwelling in Australia at the moment.

Add to that the recent real estate ‘bear market rally’ caused at the lower end of the market by the first homebuyers grant and investors returning to the market, enticed by lower interest rates and higher rents and you have the floor underpinning our property prices in Australia. Anyone arguing that they’ll adopt a ‘wait and see’ approach to buying because prices may fall further will miss the boat. Anyone arguing that the days of capital gain have gone has completely missed the point. Capital gain will be back in the long term but in the meantime we have yield. Anyone who is trying to sell their house because they’re scared prices will fall, or they’ll lose their job or that the worst is yet to come has failed to consider the opportunities presented by cashflow from rent in this market. visit:- What you should know about Dominique Grubisa

Cash is king in the current economic crisis. Real estate can deliver this. That’s the light at the end of the tunnel we should be looking to. You will never see such strong rental growth combined with such low interest rates and government incentives to buy again in your lifetime. Don’t wait for a sign from above or you’ll miss the boat.

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