If you have been following my blog posts for the last several years you’ll recall that I was one of the few to speak up during the middle of the “Global Credit Crisis” and predict that Australian Property Prices wouldn’t crash by 40% but would actually begin to rise again.

If you were a reader who paid attention and followed this prediction you would be doing very well right now as a result.

What I didn’t imagine when I first made this prediction, was just how fast Australian property prices would grow.

You see, I tend to agree with the Reserve Bank regarding the need for steady, long term growth in property prices, not the rapid and irrational growth that we are seeing right now, which potentially could lead to a genuine property crash. Even though a property value crash would only cause a temporary retreat of some of the gains that we are currently experiencing.

So what is behind today’s, seemingly irrational, property price growth rather than the ideal, steady and consistent rise in values?
In a word: China

Yes, China is helping Australia to become the richest western country in the world. Not just from buying every mineral we can dig out of the ground, but from Australian property. The Chinese have made vast fortunes from their own booming property market in recent years and now they have their sights set on relatively cheap Australian real estate. For cashed up Chinese investors Australian property prices are a bargain.

If they figure our iron ore mining companies are off the market then they focus on something that is, you guessed it, our land and property. And that’s exactly what they have started to do.

Hopefully now you can see why property prices have been going through the roof. And if you think prices are high now, you haven’t seen anything yet.

You will witness property prices pushed up to a level beyond what most Australians can afford, thanks to a surge in cashed up Chinese investment.

Property owners are in a position to make small fortunes. First time home buyers aren’t so lucky though and I feel for those who will struggle to afford homes, especially now that interest rates are expected to increase towards 10%! This will stretch first time home buyers beyond belief!

But worse,  it won’t stop the prices from growing as Chinese and other Asian countries are happy to pay cash for properties. Interest rates affect them less than the average buyer and they see the long-term value in Australian Property as our population grows to 36 million by 2050.

This is why I’ve been busy acquiring land.

I see the great property boom on the horizon.

There will be some rocky patches ahead so let’s face the facts and admit that our property market is no longer simply determined by what Australians can afford.

More and more wealthy Asians and other foreign investors are going to come here and buy up big time! Will the Australian government stop them? Think about it for a minute, would the government want to stop foreign investment in Australia?

So get ready to see our property prices continue to grow and boom and most likely bubble in the time ahead.

Jamie McIntyre
CEO 21st Century Education