Although earlier in the year, it seemed very plausible.
The problem, that very few people seem to grasp, is that ZIRP means that Bonds and Deposits are essentially returning zero. So what does that mean? It means that anyone, from hedge funds down to a FHB and everyone in-between has to decide what to do with their cash (savings). Do you; A) accept near zero return B) look for a better return elsewhere and accept some risk
In my humble opinion, and based on current share market and property market behaviour. The vast majority are choosing B.
In addition to this, investing is no longer only for the elite. The general population are much more aware now than ever before. Take US share markets. The V shaped recovery which should not have happened looking at fundamentals was driven by the above plus the awareness by more people than ever that there is money to be made during market crashes.
As for OZ property. Most people still have jobs, have more disposable income due to COVID reduced spending, mortgage payments are sub 3% and as above, people are looking for a return on their investment. As long as you have a medium to long term outlook it is pretty hard not to make money when you can borrow under 3%.
Some posters on here point at reduced rental yields in Sydney as cause for concern. But with Sydney wide yield at 2.4% (and you can achieve better) and term deposits sub 1%. It is an attractive yield when you consider the historical (may not be repeated) trend for capital appreciation. Personally I am choosing shares over investment properties at the moment. But ZIRP will undoubtably divert more funds into property over the next decade.
