When it comes to property investment, “it’s never too late to start, but it’s always too late to wait“. Many people are hesitant to start investing in property. Property investment is certainly not something you should rush into without knowing what it is you’re getting involved with. However, right now could be the best time to start making your investments in the property sector. In this article, we look at the reasons why many people are hesitant to engage in property investment, dispel a few myths regarding those fears, and encourage you to take the first steps towards purchasing property, either as an investor or as a home-owner.
The Ups and Downs of the Market
One fear people have about purchasing property is that their investment might depreciate in value and lose equity. Recent history has reminded us that nothing in life is certain, with property values going down as well as up. However, property should not be viewed as a get rich quick scheme. While in the short-term prices fluctuate, over time, property remains a steady investment. In fact, property is still rising on average between seven and eleven percent per annum. The trick is to plan for sustainable long-term growth.
Location, Location, Location
While property values may fluctuate or stagnate locally, this isn’t always reflected nationally. For example prices in one area may be levelling off, or even falling, while in another location prices are rising. One of the common mistakes potential investors make is to look at what the market is doing in their local area, and decide that it is not worth investing in property. The importance of looking outside your own local patch cannot be stressed enough. Simply by shifting your investment search to another neighbourhood or area can yield much greater potential returns.
What property can I afford to buy?
Supply and Demand
Like any market, growth in the property sector is influenced by supply and demand. When there is a scarcity of property in an area, prices will increase accordingly. Property benefits from being an essential need, creating a steady, high demand. Currently, Australia is looking at a 250,000 home shortfall to meet its immediate needs. This is inevitably creating scarcity in certain areas. Coupled with that, there has been an increase in demand. Over the last 20-30 years, the average size of Australian households has decreased by 30% from 3.4 persons to 2.4 persons. This has increased demand on housing stock.
The Future of Property Values
Added to the current under-supply is a forecast increased demand for housing. The population of Australia is set to double within the next 30 to 40 years from about 24 million to approximately 48-50 million people. This increase in demand for housing is likely to have an extremely positive effect on property prices.
The Best Time to Start Investing in Property
Given that property prices in Australia have steadily increased over the last 90 years by seven to eleven percent per annum, and an increase in population will place greater demand on housing stock; now really is the best time to invest in property. As it is never too late to start, but always too late to wait, why not make an appointment today to invest in your tomorrow.
