It can’t be denied that Australian property market is witnessing a big shift. The current property cycle is showing sinking prices in certain areas and lazy price growth in others. This shift has created a little buzz among investors. A professional financial advisor in Melbourne will show you some of the ways about how you can invest in current property market and make a better use of your investment.
As opposed to the on-going buzz, the markets are acting normally. Property markets work in a certain way, after strong capital growth in capital cities, markets usually see periods of flat growth, no growth or slumping prices. That’s what we are seeing in Melbourne and Sydney property markets after unsustainable strong growth.
However, this slump will also create opportunities for long-term investors. Many potential buyers and property investors will be on sidelines waiting for the market to hit the lowest point. In such cases, perfect selection of asset will be mandatory and investors needs to carefully think about their next moves and plan long-term. It is viable to invest in this changing environment.
The best path to take in a challenging market is to play safe and not risk your whole savings on the ‘next big thing’. Investors should follow the old tested strategy and only buy investment-grade assets. Invest in properties which are less likely to be pulled down by the slumping market and remains in permanent strong demand.
Most expensive homes are likely to get effected by the market downturn. So it’s best to avoid the top end of the market. The same goes for the lower end of the market. Affordable suburbs will also suffer, as they are likely to be populated by young families who max-out their finances on buying and furnishing their homes. These also include areas where wage growth and development is quite still, making opportunities for socio-economic infrastructures.
So, a wise decision would be to invest in areas where residents’ disposable income is rising, and avoid areas that have limited growth potential.
Where Should We Invest?
It could be more risky to invest in new high-rise apartments in major cities of Australia due to the market slump. Owners may see a fall in rental growth and its value.
Instead, it’s better to invest in established suburbs where residents have higher disposable income. Like the area of Bentleigh in Melbourne, Randwick in Sydney or Stafford in Brisbane. These areas will always be in good demand due to the huge number of overseas arrivals. Rental returns and long-term capital growth are likely to remain stable.
It is also about thinking positively and keeping focus on the new opportunities this market is generating, rather than staying hopeless about the changing market. Property business is always about patience and making wise decisions at the right time. If you have the holding power, don’t worry about the flopping value of your property unless you are trying to sell or refinance.
Opportunities will always be there if you keep altering your strategies according to the market conditions. Make sure to use your finances smartly and educate yourself about the current market.
To get professional advice, reach out to 10 Properties in 10 Years. Our expert property advisor in Melbourne will guide you in making the right decisions to invest in your next property, which you’d be glad owning for years to come. Contact us now at +61 452 238 490.