Why it’s just a dip, not a housing crash.
by Sunny Singh
The property market has turned negative, how low can it go and for how long? Some experts think we are close to the bottom, others think we have further to fall.
But, even in a worst-case scenario, is this a disaster?
Most doom-mongers take a short-term approach and only talk about what will happen in the immediate months and years. What they miss out is that the fundamentals of Australian society – a young country whose households will increasingly need housing.
Australia’s has one of the western World’s youngest populations, with a median age of 38.8 years compared to 46.9 years for Japan and 47.1 years for Germany. This relatively young population will underpin housing demand for years to come; these young Australians tend to start families soon after buying property – producing more generations of home buyers.
Since 1945, over 7.5 million people have settled in Australia with our overseas-born resident population estimated to be 28.2 per cent of the population. For many of these, the Irish, Greeks and Italians, owning property has been a paramount goal upon settlement – underpinning the property market.
We now have around 200,000 immigrants a year, many of them coming from countries such as India and China where owning property is also paramount.
Recent research shows that 33 per cent of all housing lot sales in greater Melbourne have been to buyers born in India, compared with 25.8 per cent of Australian-born buyers.
Official government data shows the number of permanent Indian migrants to Australia has surged from just a few thousand a year two decades ago to as high as 40,000. India passed China as Australia’s biggest migrant market in 2012.
The property market may not be in for the best 2019 but, with wave-after-wave of immigration, a short-term dip will be outgrown by longer-term demand.
Important SMSF Changes
The Government’s “Protecting Your Super” package comes into effect on July 1st 2019, and is a comprehensive package of regulatory reforms designed to protect Australian’s superannuation savings from undue erosion by fees and insurance premiums. (https://treasury.gov.au/consultation/c2018-t286292)
There are 2 changes which may affect any industry or retail funds you have (not SMSF) and will require action from you:
- If your account has been inactive for 16 months, and you has a balance of less than $6,000, it will be transferred to the ATO. Whilst the ATO will keep your money safe for you, this could mean you lose important insurance cover that has been retained within that super fund
- If you haven’t received money into your super account for 16 months, you could lose your insurance cover
|Action Required |
You may well receive correspondence or an email from your super fund in relation to this. Please take time to read this and follow the action steps immediately to ensure you do not lose any insurance cover. Contact your super fund directly either by phone or by logging in online. They all have simple steps you can take to Opt In and ensure that any super accounts will not be affected and your insurance cover will be retained.
It is important that you take action to contact all your retail or industry funds that may be affected. Whilst Future Assist often has authority to contact superfunds on your behalf, we do not have authority to act or make changes to those accounts on your behalf, so we will be unable to assist you with this.
However, if you do have any questions about these changes, please do not hesitate to contact the Client Services Team on 1300 226 803, or email firstname.lastname@example.org