Why Right Now is a Good Time to Invest in Property
There is a lot of confusing press about the property market in Australia right now. We’ve experienced a drop in values, and this has caused some to go into a panic and spurred many to start spreading misinformation about a scary short-term that could see values drop even further.
Prices have dropped, this is true, but this dip was predictable, so is the inevitable uptick that is on the horizon, if you know what you’re looking for.
Now is the Time to Invest in Property
Property works on a cycle, and this cycle can run over a period of 5 to 9 years. In the last 15 years, we have experienced three of these cycles in Australia’s capital cities. The cycle goes like this: boom, slowdown, slump, recovery, and repeat. Where we are at in the cycle determines whether it’s a “buyer’s market” or a “seller’s market”.
Right now we’re in a slump. Valuations have gone down, there are more sellers than buyers and there is a general lack of confidence.
It’s a correction phase. Prices rose exponentially in recent years and now the market is correcting. This is the time to buy.
“The fundamentals underpinning property values in Australia remain solid. Rock solid. What we are seeing now is an important part of every major asset cycle – a correction in values after a sustained period of growth,” – says John McGrath in The McGrath Report.
“Sydney and Melbourne prices might correct by another 5% to a maximum of around 10%. In 2019, I see the strong possibility of a mini-rebound as buyer demand grows at adjusted pricing levels.”
If prices do decline further, this is a huge win for buyers; especially for younger buyers who, until now, have seen property prices at a figure they couldn’t possibly imagine reaching. This drop is a much-welcomed opportunity for young buyers to enter the market.
It’s Time to Re-Think Property Investment in Australia
Not only do new buyers need to re-think what they’ve heard about the drop in prices, looking at it for what it is: a fantastic opportunity to get into the market, property developers are also re-thinking what is required of a property. Considering the younger market and their needs, swapping out yard space and extra bedrooms for functional spaces.
“You used to need a desk and possibly an office; now you need a kitchen bench the right height for your laptop, or a sunny courtyard with connectivity.
“These changes are dialing down in home design because we don’t need to create a space (for study/work); it is more about creating spaces where people want to live,” says Adam Haddow, Director of SJB, a leading architecture and urban design studio.
And for those that still want the yard and four-bedroom dream, there is more good news. Australia’s regional areas just a short distance from the capital cities have come into their own in recent years. No longer like stepping into the past, many regional cities are now thriving economic centres.
Large regional cities are actually some of the East Coast’s best-performing property markets right now. And the trend of city dwellers migrating to regional areas is bringing more good news for those who want to purchase property in the city, the flood moving out, are causing prices to drop in the metro areas.