The single biggest driver of Australian property

(First published Nov 2016): The inexorable rise of property prices has taken the scalp of many a bear in recent years, but there is a growing chorus of analysts and commentators now calling Australian property a bubble close to popping. It’s easy to argue the case given extreme valuation ratios, growing apartment oversupply risks, and the sudden 5-10% falls in Melbourne suburbs like Balwyn North and Mount Waverley. To get an objective view, we met with Tim Hannon, CIO of Newgate Capital Partners to ask what the single biggest driver of Australian property is. Tim told us: “Its really the credit cycle that drives returns. It’s not demand and supply of the asset. It’s the willingness of borrowers to borrow, and the willingness of lenders to lend, and the confluence of those factors.” In this short video he provides some context, and explains what we would need to see before property prices would fall.