Michael Karagianis’s (Senior Investment Strategist at MLC Investment Management), attached report is an interesting update to his more detailed report published in July 2011. If you would like a copy of the original report please let us know.
Australian residential property valuations relative to the rest of the world give cause for concern considering the high personal debt levels of Australian’s. At Medical Financial we have been speaking about these themes for some time and both RP Data and the RBA have expressed their concerns over the last 12 months. Michael concludes:
“In such an uncertain economic environment, many Australians should carefully consider the extent to which housing dominates their wealth. The current low interest rates make investing in residential property seem appealing, but people in or approaching retirement need stable income flows from their investments. Australian residential property isn’t likely to produce the same returns in future as it has in the last few years and is certainly not likely to produce particularly attractive rental yields. As a result it may be worthwhile considering a more diversified strategy.”
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