A recent report by Westpac states that Australia’s recent lockdowns are going to cost the economy 8 billion dollars. What’s more, they mean that our Gross Domestic Product (GDP) is going to fall by over 4.7% because we’re not producing the same amount of goods when so many businesses are shut down.
If the lockdowns stop happening, we could bounce back later in the year. But if our lockdowns drag on for longer than we expected, we might end up finding ourselves in a double-dip recession.
It’s certainly not good news. But let’s look at what’s happening here.
The driving force behind a recession is when people stop spending. So companies make less products because people are spending less money. That in turn creates unemployment, which again reduces the amount of money people can spend.
It’s a vicious cycle. Soon assets begin going down in value, and we get stuck in deflation.
But it’s not all doom and gloom. We have had 12 months of lockdowns, but are still one of the richest countries in the world when it comes to the median wealth per adult. We also have the strongest labour market with the lowest job vacancy vs unemployment ratio going back to 1996.
The current spate of lockdowns will cost us eight billion dollars. But guess what? The RBA is printing four billion dollars a week. In two weeks, the $8 billion will already be covered.
My prediction is that the economy will still bounce back despite the lockdowns. And this is why you need to put your money to work for you as soon as you can. Real-estate investment will give you results that you might not find elsewhere.
The Current State of Land Tax
New South Wales government is now planning to phase out transfer duty in favor of the land tax. The government has been slowly reducing transfer duty due to increased land tax since 2012. The duty is planned to be entirely phased out by 2032.
I don’t know if you realize ACT land tax is through the roof.
If you owned one million dollars of land in Northern Territory, you would pay zero tax. But this is what you would pay for the same value in other states:
- In WA, you pay $2700.
- In South Australia, you’ll pay $4800.
- Queensland, you pay $4500.
- New South Wales you pay $4000.
- Victoria $2975.
- Tasmania $11587.
- ACT $8856.
ACT has very expensive properties. Tasmania has very cheap property prices, but high land tax. Victoria now has the biggest rate of property transfer duty of around 5.5%. Back in 2002, it used to cost $12,000 on a medium property. Now it’s $45,000.
Victoria is taxing everyone heavily. And that’s not a good sign. Because you can’t keep slapping high taxes on everyone forever— it’s not sustainable.
What You Can Do Amidst The Lockdowns To Grow Your Wealth
Let’s face it. If you stay on the fence and watch things get worse every day, you’ll lose in the end. The massive money printing habit of the central bank will devalue your money in the bank now. The taxes might go up as well. Inflation is also rising.
And all these can mean one thing—in the future, your money won’t buy you the same value it can do now.
But here is the sweet spot. If you buy assets that appreciate in value, you will grow your money while everyone else is losing.
Now you have two choices. Be on the winning side or watch as you lose your hard-earned money. I am not a prophet, but I will tell you that if you invest in assets that appreciate value, you’ll win.
At the beginning of the year, I told people we would have a boom stack. Now it’s happening. Those who listened are now seeing the benefits. And now you can choose to listen. Invest in good property in good suburbs, and you will have many reasons to smile in years to come.
If you’re curious to know how to do it yourself, I have a 14-day challenge to help people who want to create their own Blueprint for creating a cash-positive property portfolio that gains value and gives you passive income on autopilot.
Over 14 days, participants hear from the experts and learn from me how to develop your plan, fix your credit, look good for the banks, organise your tax structure, choose the right property, set yourself up for 5-10 properties (instead of getting stuck at 1), and much more.
The Challenge helps you get educated and create an informed plan for getting your first, second, third, and beyond cash flow positive investment properties.
It’s a great way to get your ducks in a row and start on your path to becoming a property investor in a safe and steady way.
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If you’re interested in finding out more, go visit this link to check it out.