Buying a property can be an emotional task, particularly if you’re planning on living in it and making it your home. However when it comes to investing, it is beneficial to remove that emotional attachment and look at the facts. Although you may know and live in a particular state or city, that does not necessarily make it the best investment opportunity. The Australian property landscape is extremely dynamic and diverse, ultimately presenting an array of investment opportunities.
Focus on the figures
Australia is not one homogeneous market, but rather a series of sub markets. The below graph illustrates how Sydney, Melbourne and Brisbane’s property markets have performed independently over the course of 20 years. Experts suggest Brisbane is a strong growth market based on the difference in median house prices which have risen from an 8.9 per cent difference to Sydney in 2009 to 86 per cent difference to Sydney in 2015.
Source: “Onwards and upwards or down and out? Where to from here?”, CoreLogic RP Data, 2015.
Many property owners could be forgiven for thinking that the whole country is experiencing similar market conditions to Sydney and Melbourne. When in actual fact, while Sydney and Melbourne markets are softening, other locations are gaining momentum.
Do your research
Any investment opportunity requires you to do your homework. “The most important thing is to do your research and build up your knowledge of particular geographical areas that appeal,” says Tony Brasier, president of the Real Estate Institute of Australia. ”If you invest interstate, it’s a long-term investment, not a short-term one. Taking a seven to 10 year view, especially when investing in counter-cyclical markets, is a good strategy.”
Understanding and analysing property trends, speaking with fellow investors or seeking advice from a financial planner will assist in your purchasing decision. Being thorough will assist you to find the best investment opportunity to achieve your property or financial goals.
Look at the big picture
Property markets are largely affected by economic conditions within a particular region. Understanding the local economic activity, unemployment rates, new and planned infrastructure will illustrate the demand for housing or accommodation. As a landlord, these are important to factors to weigh up when determining where to invest.
Ultimately, when it comes to investing, sometimes the best opportunities are outside of your comfort zone and outside of your home state. Seek advice, do your research and examine all opportunities to ensure you’re making the best investment.