Want to know the source of wealth for most Australians? Well, look around you. As a share of wealth, property tops the list at 60% of an average individual’s overall wealth. According to Citi, surging house prices in Sydney and Melbourne have been a prime contributor to the 30% increase in household wealth over the past three years.
The recent price rises in these cities and widespread media coverage of a looming crash, the surge in apartment building along the east coast and very low rental yields across the country, have many investors wondering whether residential property really is as safe as houses. And that was before Philip Parker of Altair Asset Management announced he would liquidate the company’s Australian shares fund and return the proceeds to investors, citing an impending property market “calamity”.
Let’s walk through the most common questions residential and commercial property investors are asking.