Expectation vs Appreciation

Housing affordability has been a red hot topic of conversation lately, due to the sky rocketing prices in the Sydney property market. We are seeing a lot of opinions for solutions to tackle the housing affordability issue however we are also hearing a lot of whinging and whining. The expectation that we should all be able to afford to live in arguably one of the best cities in the world is unrealistic. The cold hard facts are that if you want to live in a blue ribbon international city such as Sydney, then you will just have to pay the price. Many striving Australians have long expected to be able to purchase a home in the iconic city, however expectations are just like an opinion, everyone has one! These expectations become subjective and can differ from person to person, however those that expect to be able to purchase property in Sydney continue to be let down by unattainable entry prices as a result of the massive spike in growth in the last few years.

There is a solution (opinion) to this crisis. It begins with the mindset. If we trade expectation for appreciation in our heads, things start to change. This simple method of thinking has proven to have a significant impact on human behaviour. When we lay expectations on people and situations, we are attempting to dictate an outcome or control a situation. Appreciation on the other hand, is strictly about right here and right now. We start to appreciate what we have and what is around us. Our opportunities and possibilities, both in the present, is a far more positive place to be.

We live in the best country in the world. Therefore it is no surprise that our property market holds some of the worlds hottest commodities in its capital cities. It is no surprise Sydney’s affordability is around 12-times the household income, according to the Annual Demographia International Housing Affordability Survey. House prices in other pockets such as The Central Coast and Newcastle however, remain affordable with generous government cash injections into local infrastructure and development over the next decade, which shows that there is still hope for The Great Australian Dream. According to CoreLogic’s RP Data, Newcastle’s median house price is $980k and The Central Coast median is a super affordable $700k. Quite promising considering it is only an hour drive from the world famous Sydney Harbour Bridge. In comparison, Sydney’s median has just hit $1.15M. We should be appreciative that we live in a country that allows for other markets to flourish in growth providing us with opportunity to still make money from the Australian property market. We may not want to ideally live in these areas however they sometimes provide a healthier rental return compared to Sydney. The economic drivers are all in place to also help with capital appreciation. Remembering that property investment is all about the numbers, it may be a better option to invest in these markets as there is plenty of room for a decent profit margin.

The housing figures in other markets should provide motivation for those who have been squeezed out of the Sydney market. But, mention The Central Coast and/or Newcastle to some Sydney siders and it is sometimes met with their nose turned up, invariably by those who have never experienced the area. They might call the central northern region a sleepy market with weird tourist attractions, an ageing/dying population that refuse to adapt to development, or a town full of surfers that drink beer all day. Such descriptions are correct in some ways, however many investors are producing great returns on their investments.

Our attitude towards our property investments are important. If you want to move up on the property ladder, then your attitude has to be positive. This doesn’t mean you should be dancing around and laughing non-stop, although that would be fun and nice, but being realistic and forward thinking. If you are content sinking lower and lower into Sydney’s housing affordability issue, then the negative energy will ultimately take over. Just like Tony Robbins says, “Appreciation is a mindset”. Your life is never going to be perfect, but it definitely helps when you can see the good even through the difficult times. We need to stop obsessing over things we cannot control. We must trade our expectations in for things we can control and focus on the positives. For example, instead of looking at low interest rates as pushing prices up, let’s look at it as low interest rates are giving us an opportunity to get into the market at an affordable rate. Money has never been so cheap! Government cash injections means further infrastructure such as public transport and more jobs. Yes, there will be some minor disruptions while this process takes place but it means we are progressively moving forward as a nation. These are positives for this country and we should appreciate how we are developing and evolving moving forward. It all depends on which angle you look at it from.

There has also been plenty of media coverage of late discussing the comparisons of the types of properties that can be bought in other countries such The United States and Europe with Sydney prices. The truth is I would never want to live in those other countries. Even though the Sydney property market is out of reach for most, including myself, I am forever grateful there are more affordable sub-markets close to Sydney to allow me to enjoy this wonderful city. Practicing gratitude for what we have now prevents us from seeing any issue moving forward. It is impossible to be angry and grateful at the same time. Overall I feel we are extremely lucky to be able to live in such an amazing and privileged country.

What can you do to tone down the disappointment of not reaching your expectations of buying property in Sydney? Maybe work on a little appreciation in your life. Start focusing on solutions you can control and implement rather than problems that are ultimately out of your control. We all have access to the same resources such as education and advice, it is just a matter of being resourceful. Appreciate the life this country has to offer and start educating yourself on how to enjoy it in your future.