https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode #71, the Property Planner, Buyer and Professor Podcast team discuss "Capital Growth - What increases property value?", as Dave, Cate and Pete take you through: 1. Consumer confidence It doesn't matter how low interest rates are or how easy it is to borrow money. If people are not comfortable and confident, they're not spending extra or making life-changing investment decisions. Security of employment, community health (pandemics for example!!!), government support and stability and the geo-political environment are all critical factors that feed into consumer confidence. 2. Interest rate cuts and banking competition RBA confidential analysis shows that property values could rise by 30% if people believe the cut in interest rates is permanent. Although far from permanent, 4 years is far enough away in the eyes of many, along with lender competition to drive up property demand and speculation. 3. Availability of credit Access to funding is one of the most critical elements that can increase property prices when the tap is turned on, or deflate the market when it's switched off. We now have a history of APRA's macro prudential regulation stalling 'runaway' property growth. We also have relaxing of the responsible requirements which will make it less onerous to obtain a loan. 4. Business confidence Just like consumer confidence, when businesses are happy and comfortable with a strong pipeline of sustainable income, they're more likely to spend more, including upgrading systems and putting on more staff. This all drives up spending, creating more jobs, increasing employment, wages and....you guessed it, property prices. 5. High employment When we have high employment, more people are likely to consider leaping out of the rental market and embarking on the quest for home ownership. Reducing unemployment down to below 5% is a core focus of the RBA's low rates for longer and quantitative easing to drive wages growth. 6. Wages growth The Property Planner explains the RBA's plan to overstimulate the economy in a bid to push down unemployment, promote spending and increase in wages. The resultant effect of these objectives will drive investment and property growth. 7. Population growth The trio discuss the nuances of population growth on a macro (Country, State, City) and micro (Suburb, location) level. Be careful not to confuse affordability with desirability. Just because an area has had a lot of uptake, does not mean it is desirable and will exhibit capital growth. 8. Government stimulus When our politician's throw money at us, and particularly when it's enabling a purchase decision, it has a direct impact on asset price growth because of the increase in buyers. This also results in great competition pushing up property values and creating new benchmarks, and potentially meaning that some people overpaying for property because they're desperate to get the discount. You should never base a property decision on benefits that represent a false economy when contrasted against your intended outcome. 9. A rare few infrastructure upgrades The trio share the infrastructure upgrades that are worth paying attention to and those that are capital growth red herrings, which is the lion share of them despite what the media, spruikers, agents and the well-intended friends and family might tell you. 10. Increase in overseas buyers Over the last decade, we've seen rapid pric...