Property investment is a risky business. You can't always predict the future and sometimes things don't always turn out as planned.
But that's part of the thrill for some investors. And yet, even if the moderate risk in property investment thrills you, wisdom still dictates you MUST research trends and plan your next move.
After all, it's still investing and not a game. Which is why we've done the research and peered into the future for you.
A lot has been going on in the world of property investment. We're revealing some important things you should know about property investment in Australia.
In the next few paragraphs, you'll learn exactly what's predicted for the market and what's new in property investment in Australia. There are some good things coming your way, so keep reading to find out!
1. Property Investment in Australia: Don't Worry, It's Not a Bubble!
Ever since 2008, the word "bubble" has made a lot of people connected to real estate edgy. You don't toss that word around lightly.
What you need to understand about bubbles and recessions is that there are always indicators abroad, principally in the United States. The United States usually shows signs of recession before Australia.
And the U.S. market is still strong and growing. Yes, market prices are higher than they've been since 2008. But the market growth means health and not weakness.
Not only is the U.S. market strong and growing, but much closer to home, Asian markets are bullish and haven't shown signs of slowing. So fear mongers be forgotten, the market is going to keep growing and it's still a good time to invest.
2. A Hyperloop in Australia?
Elon Musk isn't your megalomaniac bad guy bent on taking over the world. But he's about as rich as one. And he's considering Australia as the location for one of his first Hyperloop transportation projects.
Major projects like this typically increase property values nearby. Why? Because not only will people move to the area to build the thing and operate it, the technology itself will change lives.
The Hyperloop will bridge Sydney and Melbourne. A journey that takes eight hours by automobile. At 1,200 km/h, the Hyperloop journey would take less than an hour.
When this technology becomes mainstream, and the Hyperloop is promising, proximity to the city won't be an issue. Thus whole new property markets will open up.
Suburbs might take a hit, however. But something must be sacrificed when new technology changes how we live.
When the automobile came along, those who worked in the city moved to the suburbs. And when highways became a reality, train transportation took a hit.
However this technology changes property investment in Australia, if investors are wise and remain alert, they could leverage an opportunity like this and come out on top.
3. What About 'Rent-vesting'?
If you're a Millennial, property investment might seem outside your reach. Especially with the slowdown in wage growth, many millennials are hesitant to even buy their first home.
But one trend the Millenial generation seems to have taken to is "rent-vesting." What is rentvesting? It's simply renting a property where you want to live (close to work, family, lifestyle choices like the beach etc) and buying an investment property in the location that gives you the best chance for capital growth at the same time.
Between the rental return and your tax return, the investment property essentially pays for itself. And the investment property grows in value all the while - which produces equity.
Also, rent-vestors are buying in the suburbs where they can normally receive a higher rental return than a city property. It's a smart move in an economy that isn't rewarding a whole generation of potential investors.
If you're a Millenial and you've wanted to break into property investment in Australia, rent-vesting might be a viable option for you. By not buying now, you're losing money by the day as property prices climb.
4. Interest Rates Are Still Low
While the economic rebound made some investors worried that interest rates would increase soon, this hasn't happened. And it probably won't happen anytime soon. We predict the RBA will keep interest rates low for the next couple of years.
While the jobs market has increased and the economy strengthened, wage growth is still slow. This has caused industry regulators to keep interest rates low.
They're saying that the improvement in the labour market still isn't enough to consider hiking rates.
Or course, this is good news for investors. And it means that now is still the time to invest in property in Australia, despite relatively high property prices, especially in parts of Sydney and Melbourne .
If you can lock in at this current low rate, you can invest in more property sooner. Waiting to invest is a risk right now.
But What About the Next Year? What Do Experts Say?
Some say the Government is tooting its own horn when it comes to future rate hikes. Announcements like Phillip Lowes in September or 2017 could be an attempt to spur investment.
This thought doesn't come without its negative possibilities. A lack of rate hikes next year means the economy has slowed even more and housing prices began dropping, again especially in parts of Sydney and Melbourne.
This isn't a favourable prediction for property investment in Australia. But whatever the future may hold, now is still a ripe time to invest. And this year is looking like a stable one.
5. A Population Boom
It's not just a baby boom we're seeing, it's an immigrant boom as well. The population increased about 1.6% since last year.
An increase in population means an increase in demand for pretty much every market. But it's especially a good thing for property investment in Australia.
It means that more people will be looking to rent and more people will be looking to buy.
And we all know what happens when demand goes up. Prices go up. And if you cash in on a growing market like this one, you'll see greater returns later on down the road.
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Now Is the Time to Invest
If you're new to property investment, you've chosen a great time to enter the market. The market is strong and interest rates are still low.
Investing in a property for the first time can be scary. But it's also one of the best decisions you could make in your life. You build worth and equity for the rest of your life.
If you want to expand or even begin your investment portfolio check out our services.