Make growth your property investment strategy for this financial year.
Why? The current interest rate environment is the most affordable in most people’s recent memory, with little chance that the RBA will take it anywhere near those historic double-digit heights. While investors may not be seeing sharp short term capital gains they have in recent times, rental returns are, and will remain, very healthy.
You could look to put your money elsewhere, but property is less volatile than other popular forms of investment, and easier to borrow against for further investment.
Australian residential property offers the investor a sustainable, reliable wealth creation strategy over the long term, and well-informed property investing should give an asset that will see continued demand from both renters and buyers for years to come.
Being well-informed requires a combination of your own research and tapping into the knowledge of property managers and sales specialists, who know the markets they operate in better than anyone, and your next investment property does not need to be in the same suburb, town or even state as any you currently own.
Keep this front of mind: Australia is a market of many local markets, all of which are performing differently. This is one of many things in favour of holding investments in different locations.
So, what’s happening across markets? Conditions are mixed, with Sydney and Melbourne median prices dropping 1.4 per cent in the past six months while prices in Adelaide continue to climb at a fast pace.
There are still plenty of regional areas with strong growth potential, due to factors like an undersupply of properties for sale and rent, booming local job markets, a strong outlook of infrastructure development, good lifestyle and affordability. And have you heard that every year more Australians relocate to regional locations than to capital cities?
Rental return and capital growth are the investor’s goal posts. Being a ‘capital’ city doesn’t necessarily equate to capital growth, and, right now, 24 of the top 28 cities and towns with Australia’s highest median house price are regional.
In looking for your next property, tick off affordability, a diverse and strong infrastructure pipeline, a near-zero vacancy rate, rising rents to combat interest rates and a strong local job market. If you can, your outlook should be positive.
Buy in a location that has the necessary fundamentals for long-term price growth and rental demand, locations where there is going to be strong economic growth that will lead to wage growth and eventually population growth. Buy with a stable financial position to support you.
