Catch up with Robbie and Clint as they talk about old friends, war-stories and most importantly the lessons learned in the ADF that formed the culture of their leadership on the Axons Unleashed Podcast.
WHAT'S NEW TO PROPERTY INVESTMENT IN AUSTRALIA RIGHT NOW?
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. This 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. Next, you’ll learn exactly what’s predicted for the market and what’s new in property investment in Australia.
1. Property Investment in Australia: Don't Worry, It's Not a Bubble!
Since 2008, the word “bubble” has made many people connected to real estate edgy. You don’t toss that word around lightly.
You need to understand about bubbles and recessions 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. Sure, the 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 will keep growing, and it’s still a good time to invest.
2. A Hyperloop in Australia?
Elon Musk isn’t your only 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, and 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 slow down in wage growth, many millennials are hesitant to consider buying their first home. But one trend this generation seems to have taken is “rent-vesting.”
View this post on Instagram
Essentially, it’s simply renting a property where you want to live (close to work, family – lifestyle choices like the beach) and buying an investment property in a location that gives you the best chance for capital growth at the same time.
The investment property essentially pays for itself between the rental return and your tax return. And the investment property grows in value, all the while producing equity. Also, rent-vestors buy in the suburbs, where they can typically 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 Millennial and want to break into property investment in Australia, rent-vesting might be a viable option. 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.
5. Now Is the Time to Invest
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.
6. 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.
Now Is The Time!
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.
Karl Schwantes, an Army Officer Veteran & a leader in the jewellery world and the wider community joins us on the Axons Unleashed Podcast.
Just two years on, their PPOR has risen in value by ~$200K even after buying it for ‘lifestyle reasons’ rather than ‘wealth creation’ reasons. Not only have they enjoyed the experience of building 2 houses, but the accompanying $370K of net growth over the 2 properties is also a stellar result!
Is Defence Housing investing right for you? It’s not for everyone. Learn the difference between regular and DHA investing here.