With the property market being very active at present it would appear many believe now is a good time to buy property in Australia. In fact, 74% of respondents to a survey believe now is a good time to invest in residential real estate.
This also includes fresh interest from property investors who consider that there is likely to be a slowing down in the supply of new apartments and the prospect of capital growth.
Become a property investor
Have you considered being one of the two million Australians investing in property? But how do you make the right investment property purchase?
Unlike your family home, investing in property is not an emotional decision but rather a financial one. It's important to factor in the known drivers of the property market, supported by data, research and professional help to make an informed investment decision based on your personal circumstances.
Key considerations
When investing in property the golden rule has always been 'location, location, location.' However, are there only three location considerations or are there other considerations as well? Yes, there are.
1. Location
There are more than three location considerations when selecting the most appropriate investment property.
- Amenities - are there local shops and conveniences that allow people to obtain the essentials easily?
- Transport - is the location easy to access, are there public transport networks and good road networks?
- Employment drivers - are there local businesses that offer opportunities for employment within close proximity?
- Lifestyle - are there activities to do outside with friends and family that attract people to live in the area?
- Public infrastructure - are schools, healthcare facilities and other critical services available?
2. Population and demographics
The type and number of people living in an area can influence property demand and values. Most importantly you need to ensure that the type of property you purchase matches the needs of those who live within the area. If the location is dominated by families, it is likely that a house will be more in demand than a unit and easier to rent.
3. Market trends
Trends and events can quickly change the demand in some locations. There is no better example of this than the pandemic with many people now looking to relocate to regional and coastal areas. Employers have recognised the need to provide more flexibility including allowing working from home arrangements.
4. Financial returns
Investors typically invest to seek capital gains or a rental yield to provide cashflow. Investors tend to invest in metropolitan areas hoping for future capital gains. However in regional areas, the growth in capital gains is not usually as fast or significant, consequently, investors look to invest in properties that have good rental yields. Your interest and decision to invest in metropolitan or regional areas will be influenced by your financial goals and the type of financial return you seek.
While selecting the correct property investment is important, equally important is ensuring that the property fits your personal circumstances, financial objectives and within your financial means.
Property investors should take advantage of the information available to them and seek advice from a finance specialist to make informed property investment decisions.