After a tough 2019 for the property investment market, signs are promising for 2020 and beyond.
“The market is extremely positive,” Riskwise founder Doron Peleg told Bushy Martin on the Get Invested podcast.
“Many indicators that show that mainly in Sydney and Melbourne, but also other areas like southeast Queensland the market will perform very, very strongly.
“The first (reason) is that the sentiment has completely changed. Price tags are going to increase. Expectations are very, very strong. The second one is that all the negative things that we had were effectively reversed.
“We don’t have the political uncertainty or the taxation changes.”
Doron said there are now great opportunities for would-be investors or those looking to grow their portfolios.
“It’s way more affordable to buy an investment property,” he said.
“All the projections are suggesting that it is highly likely that the market will reach a new peak in 2020, which means anything that you buy below the peak will definitely be profitable.
But as the market improves, Doron warned that pressure could turn back to investors.
“Investors are a very easy target. It’s very popular to say ‘let’s reduce investor activity and increase first homebuyer’s activity’,” he said.
“If we see a strong increase in investor activity, plus very strong price increases in Sydney and Melbourne, the regulator can call and say, ‘OK, let’s reintroduce credit restrictions on investors’.”
“If we do not have any changes to credit restrictions then it’s going to be a very strong year for the markets.”
For investors looking from property nation-wide, Doron said the best place to look is Melbourne.
“The key thing with Melbourne is that currently this is the only place that you can have the combination that you’re looking for,” he said.
“You’re looking for a really good proximity to the CBD … you are looking for sensational, long-term sustainable growth. And also, you would like to reduce the risk.”
More specifically, Doron said to look west of Melbourne CBD to get bang for buck.
“Now Melbourne, the west (suburbs) are replicating the very same patterns that we saw in the western suburbs of Sydney,” he said.
“We see land values are going up and we’ll see a huge undersupply of all properties.”
Although Melbourne is outperforming many areas around the country, South Australia also has its bonuses, but it all depends on the investor’s budget.
“It (South Australia) doesn’t leave you with many options, effectively you have Adelaide south and Adelaide west,” Doron said.
“If you have an unlimited budget then this is a different conversation because you have Adelaide central and the (Adelaide) Hills.”
Listen to the full podcast interview here.
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