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How the economy affects the property market
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.
