Comparing Canada with Australia's property market
Comparing Canada with Australia's property market
The world is becoming increasingly interconnected, and this is having a major impact on investment markets. What happens in one country's market can now have a ripple effect on other countries' markets, thanks to factors like the ease of cross-border capital flows and the digitisation of money.
This week I compare the Australian and Canadian property markets, which, despite their geographical distance, share some surprising similarities.
I delve deeper into these points and others in the video, but for the impatient investors out there, here are four key takeaways:
The World's Shrinking: Gone are the days of isolated national markets. Global forces, capital flows, and digital currencies are weaving economies closer than ever before, meaning a blip in Canada's housing can send ripples across Australia's pond.
Mirror, Mirror on the Wall: Canada and Australia share striking similarities. Both boast sizable economies, stable currencies, and recent experiences with rising interest rates and surging house prices. By understanding Canada's journey, Australian investors can anticipate potential twists and turns on their own path.
Canada's Resilience Lesson: Remember that Canadian housing slowdown in 2023? Those aggressive rate hikes threw a wrench in things, but the market's surprisingly swift rebound offers valuable lessons for Australian investors facing similar headwinds.
Long Game: Brace for Uphill: Buckle up for a few years of rising housing costs across both countries' major cities, thanks to rising interest rates. Downward pressure isn't likely until the late 2020s or early 2030s, so adjust your sails accordingly.
This unexpected connection between two seemingly distant markets offers a treasure trove of insights for navigating the ever-evolving Australian property landscape. Prices have stabilised and look like they are starting to rise again. The next cycle has started.
Peter Esho is an economist and Founder of Esho Group. He has 20 years of experience in investments and markets.