Most medical professionals dream of working less, earning more, and building substantial wealth. Achieving this balance not only brings financial freedom but also allows more time with family and the pursuit of personal passions. Interestingly, lessons from sports often reflect strategies for wealth building.
In Australia, property investment is widely seen as a surefire way to generate passive income and long-term wealth. However, for younger generations trying to enter the property market, the situation is increasingly challenging.
The Property Ladder Challenge for Younger Australians
Many young Australians will only access property through the bank of Mum and Dad or via an inheritance. Unfortunately, waiting for inheritance may not be practical. With people living longer and technological advances extending lifespans, heirs might not receive significant assets until much later in life.
While this inheritance is expected to total a staggering $3.5 trillion over the next 20 years, much of it is tied up in homes and investments. Parents may provide some support during their lifetime, but full access is unlikely until later.
This leaves younger Australians with four potential options:
- Not buying a home.
- Buying a home with significant debt.
- Living with parents until inheritance.
- Renting for most of their adult life.
It’s no surprise that many younger clients ask whether house prices will ever fall. Here’s my honest take.
Why House Prices Are Unlikely to Fall
1. Immigration Drives Demand
Legal immigration is contributing to higher demand for housing in major Australian cities. Over the next five years, more than 1 million people are expected to move to Australia, many settling in capital cities. This increase in demand, combined with limited housing supply, naturally drives prices up.
Additionally, many new immigrants come with larger deposits, sometimes 50%, giving them a financial edge in competitive property markets. This further pushes up house prices, making affordability a growing challenge for local buyers.
2. Political Factors Keep Prices High
Politicians rarely benefit from falling house prices. A significant portion of voters either own homes outright, pay mortgages, or rent. Any policy that reduces property prices risks upsetting two-thirds of the electorate.
Moreover, state governments rely heavily on property-related taxes, such as stamp duty and land tax. Lowering house prices could directly reduce state revenue, making such a move highly unlikely.
3. Negative Gearing and Investment Incentives
Negative gearing remains a popular tax strategy among property investors. While controversial, it encourages continued investment in property, maintaining strong demand.
Even if negative gearing were reduced or abolished, many landlords are positively geared and unlikely to sell their properties. This continued investment supports sustained property prices.
4. Lifestyle Expectations and Home Upgrades
Social media and societal expectations fuel the desire for bigger and more luxurious homes. Many homeowners choose to upgrade to larger properties with premium features, which increases overall housing costs. These costs are ultimately passed on to buyers, keeping prices elevated.
Final Thoughts on House Prices
In my honest opinion, property prices in Australia are unlikely to experience a significant decline anytime soon. Multiple factors, including immigration, political considerations, investment incentives, and lifestyle expectations, all contribute to rising or sustained property values.
However, it’s important to remember that this is general advice. Individual circumstances vary, and property investment decisions should always be discussed with a qualified financial professional.
Frequently Asked Questions
Through structured financial planning, debt management, and property strategies. Advisors design plans to grow wealth while reducing workload and maintaining lifestyle goals.
Yes. A medical accountant can guide you with tax planning, loan structuring, and cash flow management. This support makes it easier to secure your first property without compromising your lifestyle or long-term financial goals.
Negative gearing allows property losses to offset taxable income. For high-earning doctors, this can cut tax bills significantly. A medical accountant can check if this strategy fits your overall financial plan.
Property is a big commitment, and without planning, debt can cause stress. A medical accountant ensures you buy smart, claim tax benefits, and keep finances balanced while still enjoying your lifestyle.
Build Wealth Smarter, Not Harder
Medi Success helps many medical professionals work less, earn more, and build incredible wealth through expert financial advice. While property investment is one way to grow your wealth, it may not be the right choice for everyone.
If you’re a medical professional looking for expert financial guidance, we can help you achieve your goals. Contact us for a free financial consultation by clicking the big button below.
