Winter gloom or bloom?

WITH GARETH KENT, DIRECTOR PRESTON ROWE PATERSON

Yes, winter is here. People north of Victoria think our cold winters are gloomy and sad – little do they know winter is our time of year: it’s fresh, its clean, it wakes you up.

We snuggle into our loved ones for a warm cuddle, we get out and watch our winter sport, we coach our kids in the pouring rain, and spend our weekends chauffeuring wet children from football to basketball, to tennis, or maybe it’s gymnastics or badminton. We squeeze in a Hot Pilates session or maybe a run or walk whilst it is still daylight, in our track suits or leggings, and then we light the fire, tuck into a hearty slow cooked casserole and open the wine. It is this definitive change in the seasons that sets our little piece of the world apart.

It’s no wonder people get hooked on living in our part of the world, recent data released by the Regional Australia Institute indicate that migration out of the major cities to regional cities is still a thing, post pandemic. With 24 per cent more people choosing to live in the regions than in major capital cities across Australia, and Geelong is sitting as third favourite behind the Sunshine Coast and Gold Coast.

Reasons for the continued shift to the regions is a combination of the biting increased cost of living in the cities and the low unemployment rate in our region. We are providing sufficient jobs to attract people. With local major construction projects such as the Hanwha Armoured Vehicle factory and the Convention Centre in full flight, the region is well placed to keep attracting families. If the Avalon defence industry really gets going, we could see generations of new employment. Add in our lifestyle and education advantages and magnificent winters, and it’s no wonder we are a destination region.

However, there are a few headwinds out of our control. Globally, we have witnessed some massive political shifts in the past few days. With the election of a Labor Government in the UK (with a record majority), and the unprecedented vote in France delivering a fractured parliament, again with a left-wing majority. To give some relevance, the UK is the world’s sixth biggest economy and France is the seventh. They’re both major trading partners of Australia.

These international events always have an implication for our local economy, and by extension, our property market. Based on their political promises, will both these countries start spending and blow global inflation up? How will this impact us? Both elected parties are not known for having frugal styles of Government. We have deep economic ties with both countries, and we rely on the UK for trade on every level from underwriting our insurance premiums to being one of the biggest buyers of our produce including wine, wool, cereal crops, even medical technology. UK is also a defence partner in the AUKUS deal and I don’t dare to think of the global impact of a Trump return, which is now likely given Biden’s self-destructive performances recently.

Uncertainty is destined to continue in our property market for the next few months at least. History has shown that turmoil in Europe and the US, drive investors and money toward secure assets and the Australian property market has always been one of the most stable assets in the world. Perhaps these events will set off a chain of reactions that may help our market turn the corner? More money coming to our shores for investment in property may provide for better lending rates.

With the seasonal changes we also enter a new financial year, and we can expect certain lending institutions will be looking at how they can increase market share in a market that has proven to be stable in uncertain times. Perhaps policy makers could consider protecting our economy from the world events, by offering incentives to first homeowners, who are currently priced out of the market, and are the lowest participant out of all buyers at the moment.

Our winter property market has slowed down, as is normal with our seasonal changes. But it won’t be like this for long. It’s time to get in if you’re looking to buy in our region. And opportunities are everywhere. Interestingly the number of listings of properties below the $750 thousand mark now make up a much larger proportion of properties for sale.

My opinion is that it is now very unlikely the Reserve Bank will make any sort of real decision on interest rates this year, the global environment is just too volatile. We will do what we do in winter, we just get on with it. Let’s enjoy our winter, both the property one and the seasonal one, enjoy the sound of rain on the roof, the warm fire, and of course there’s no better time for a Bellarine Pinot Noir.