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How the economy affects the property market

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Property markets, good or bad, are always driven by economic forces.

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So a healthy economy, I'll use an example at the moment; Melbourne for example, where there's been lots of reporting on closures of vey large manufacturing factories - QANTAS, Holden, et cetera - that's not a good time to be investing in Melbourne. If you fast forward a couple of years down the track when these factories are closed, there's going to be lots of people on the unemployment queue. And unless the local government authorities have some pretty tangible means of finding alternative employment, demand for accommodation in a market like that is going to diminish. It's understanding economic forces, usually things related to employment opportunities. If you've got a location that is, for example the economy is driven largely by tourism and the outlook for tourism is healthy, that is one piece of information to give you confidence about that particular market. And we could say the same about any industry.

Listen to other instalments of The Smart Property Investment Show:
Episode 66: Wealth distribution: how should you manage your money?
Episode 65: Real estate agents: what separates the good from the bad?
Episode 64: How this investor learned from a property blunder
Episode 63: Q&A session: the SPI team answers your questions
Episode 62: Property procrastination: the importance of finding help
Episode 61: The ins and outs of strata: what buyers should consider
Episode 60: The pros of using a buyer's agent: why this investor brought someone in
Episode 59: How to invest in property as a team: two investors share their secrets
Episode 58: When do you stop investing? The SPI Show answers more listener questions
Episode 57: Wealth creation through property: trends and themes to think about in 2017
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