Invest
Stronger property growth tipped for next 5 years
Property investors could be in for better times, with median dwelling values over the next five years being tipped to outgrow the previous five, according to a property researcher.
Stronger property growth tipped for next 5 years
Property investors could be in for better times, with median dwelling values over the next five years being tipped to outgrow the previous five, according to a property researcher.
According to Simon Pressley, head of research for Propertyology, while the market is tipped to strengthen as a whole, it will be more widespread than the last five years, which was concentrated in a select few locations.
As prices grow, Mr Pressley advocated for investors to look at the medium-term fundamentals, including new building approvals, economic growth, job creation and population growth, when considering an investment property to ensure they pick the right spots to invest in.
Mr Pressley’s analysis found that the price growth in Sydney and Melbourne in the back half of 2019 posed some risk that could see uneducated buyers lured into thinking that Australia’s two most expensive capital cities were about to start a new market cycle.
“The 2019 mid-year momentum change in Australian property markets was triggered by the stimulus of three interest rate cuts. It’s a sugar fix of sorts. But it doesn’t change underlying fundamentals,” Mr Pressley said.
The property researcher noted that despite getting most of the headlines, Australia’s two largest markets, Sydney and Melbourne, are not the fastest-growing property markets.
“History is proof that the best performers often aren’t among the capital cities, so anyone who invests in Australian real estate without analysing the fundamentals of all options is accepting the very high odds that they won’t do anywhere near as well as they could,” Mr Pressley explained.
Mr Pressley said wannabe investors who invested in Sydney, Melbourne or Brisbane three years ago would likely be disappointed in their results, with median house prices only increasing by 2.4 per cent, 12.8 per cent and 8.3 per cent, respectively, over the period.
“Just imagine if those same investors removed the blinkers and gave themselves a proper chance of performing well,” Mr Pressley said.
“The official best-performed market was Glenorchy (40 per cent), while some other absolute standouts include Bass Coast (37 per cent), Macedon Ranges (35 per cent), Snowy Monaro (34 per cent), Baw Baw (30 per cent) and Geelong (29 per cent),” he continued.
Mr Pressley said all investors should spend some time early in the new year setting financial goals for the years ahead, including the locations likely to produce the best results over the long term.
“There’s never been a situation in our lifetime that borrower interest rates (investment expense) were so much lower than rental yields (investment income) like we have right now, and it seems increasingly likely that the RBA might cut again in February-March,” he said.
“This means that, even with a very small deposit, the annual cost to hold an investment property is near zero, so whether you’re using cash or equity in existing property, do something proactive for your future and get in the game this year,” Mr Pressley concluded.
About the author
About the author
Property
Property prices boosted by housing policies: RBA
The central bank has outlined the “pervasive” impact that policy has on property. ...Read more
Property
Labor’s ‘Help to Buy’ scheme not without its risks
With Anthony Albanese sworn in as Australia’s 31st PM, home buyers are excited at the prospect of accessing the new ‘Help to Buy’ scheme, but a property expert has warned that the risks may be g...Read more
Property
Australia's housing market is entering a ‘broad-based correction phase’
Westpac believes the housing market downturn is now underway. ...Read more
Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
Wrapping up an eventful 2021
Listen now
What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
Property
Property prices boosted by housing policies: RBA
The central bank has outlined the “pervasive” impact that policy has on property. ...Read more
Property
Labor’s ‘Help to Buy’ scheme not without its risks
With Anthony Albanese sworn in as Australia’s 31st PM, home buyers are excited at the prospect of accessing the new ‘Help to Buy’ scheme, but a property expert has warned that the risks may be g...Read more
Property
Australia's housing market is entering a ‘broad-based correction phase’
Westpac believes the housing market downturn is now underway. ...Read more
Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
