Traditionally, for people looking to make investments that will diversify their portfolios, buying property has been one of the best possible decisions you can make. People are always going to need places to live creating future demands on housing stock. This means you can buy a place, watch it appreciate in value and make money by renting it in the meantime.
This has always been a viable strategy, but the experts say that in Australia today, it’s becoming a little bit less so. There was a boom in property investment nationwide in recent years, but as economic factors have changed, we might be seeing that period come to an end. It’s quite possible that this economic development will affect you.
A property downturn might be coming
For years, investing in property has been one of the best ways to manage wealth in Australia, but that might now be changing, according to the NZ Herald. The newspaper reported that because of a downturn in the market, property isn’t as stable an investment as it once was.
“The fact that interest rates are low means that returns in general are going to be low,” said Nigel Stapledon of the UNSW Business School.
Not only are interest rates low, Stapledon noted, but rents are starting to bust, meaning it’s more difficult to earn an income on properties once you buy them. Add these factors together, and the market is clearly tougher nowadays.
Can you still invest successfully?
Despite the potential impending downturn, it is still feasible to be successful with investing in property in Australia. You just have to be a bit more careful, examining the market closely before you dive in and making shrewd decisions about where and when you invest. Know what every property is worth and be sure not to overpay.
Your margins are sure to be razor-thin as a property investor in Australia in 2016. If you don’t have a budget that clearly spells out how you plan to break even on each transaction, you might find yourself in trouble.
Get help gaining your financial footing
These are treacherous financial waters to wade into. When you begin investing in property these days, it’s hard to be sure that you’re making a safe decision. At Smartline, though, we can help – we offer property investment loans that help make property investment a more stable decision.
In the long run, we want to help you reach your investment goals. If purchasing property in Australia is part of that plan, then by all means, you should do it. Allow us to step in and provide the helping hand you need.
You can contact a Smartline Mortgage Adviser on 13 14 97 for mortgage advice. Or complete our call request form and we’ll call you!
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.