As you turn that key, or these days press the button, the first emotion is generally outright fear. I know that was my experience.
It is this type of fear that I often hear as a reason why people don’t buy property. But even if prices are falling right now, that’s no reason to be fearful.
The first thing that you need to understand when it comes to buying property is that you are not in the game of picking the top or the bottom of a market.
There are plenty of gurus and experts who have tried and failed with picking markets, so you don’t need to add yourself to the list.
Since property is a long-term investment, picking the right time is not as important as you might think.
Another money myth that I hear regularly is that all the good properties are gone.
This is just not the case. At any time, there are good investment-grade properties to buy.
Which leads us to the strategy: It’s always a good time to buy property.
THE WHY FACTORS
So, why do I think now is a good time to buy property? Let’s look at some of the things happening here and overseas that support the strategy.
Before I do, it is important to understand the market conditions.
The good news for those worried about buying at the peak, is that the last cycle peak was in 2017. Since then, all the capital cities have seen declines in value.
But wait, what? Didn’t you say now was a good time to buy.
Despite the falling prices, the thing I know is that property is a long-term game, and over time, prices will rise.
And right now, there are a number of factors that when considered together, will lead to higher prices over the longer term.
Here are a few for you to consider.
First, population growth. Data suggests the Australian population is forecast to grow by between 3 million and 4 million people over the next 10 years. That is the equivalent of Canberra every year for 10 years.
The significant portion of this growth is coming from immigration, especially from China.
More people means more demand for housing.
Second is the low-interest-rate environment. With inflation being under control or within government expectations, a low-interest-rate environment is likely to remain for a little longer yet.
Recent lending restrictions imposed by the Australian Prudential Regulation Authority that have been affecting investors have been relaxed, to an extent, which will bring investors back to the market.
Low interest rates mean more affordability, which leads to more demand.
Third, global markets are experiencing growth. As markets grow there is more wealth created, which means more people are able to invest.
And as you now know, more people investing means more demand, which, yep, means rising prices.
Finally, the changing nature of the family demographic is resulting in more demand.
There are now more single-person homes. People are marrying later and having kids later, which results in more demand for homes, especially units close to capital cities.
So, knowing these factors, it is a highly reasonable expectation that prices are going to rise over the longer term.
With a couple of cautionary considerations.
As with any significant purchase, you need to ensure that you only spend what you can afford.
It is important to consider what your repayments are going to be at current interest rates and allow some buffer for the likely event that rates will rise over the time that you are going to hold your property.
Everyone has heard property investing is all about location, location, location.
This means sticking to major capital cities where the demand factors are going to be strongest, and only buy properties that match these factors.
It’s not as important that you love the property when you are an investor, but that it is attractive to a renter, which means being close to the city and amenities.
With all this information in hand, you are now able to overcome that fear that may have held you back before, and get in the game.
It’s like the feeling you had after your first drive. With just a little bit of experience and information, you now know that driving is something you can do. Buying property is the same. Get in the market and start building your financial future.
Andrew Woodward is a mindshift.money accredited money coach based in Sydney who teaches people to take control of their money and invest for their future, simply and efficiently. Sign up for his free weekly money tips at his theinvestorsway.com.au
Gold Coast house values record the biggest growth in Queensland
The Gold Coast has recorded the strongest growth in house prices in Queensland over the past 12 months.
GOLD Coast house prices are leading the way in Queensland, up six per cent in the past 12 months to an average $620,000.
The latest figures by the Real Estate Institute of Queensland show homes on the Glitter Strip are $35,000 more on the same time last year.
Unit prices are up 1.9 per cent to $428,000.
REIQ data reveals houses on the Glitter Strip are worth $35,000 on the same time last year.
REIQ’s Queensland Market Monitor for March said the strong population growth came on the back of infrastructure projects such as the $550 million Gold Coast Health and Knowledge Precinct and M1 upgrades.
“The property market has been one of the big winners from the sporting event as the $1.5 billion infrastructure investment has boosted confidence and demand for housing in the region,” the report stated.
“We expect house prices will show an upward path in 2018. However, this growth will most likely be more moderate.”
A quiet real estate period leading up to, and during, the Commonwealth Games likely contributed to a slight drop (-0.3 per cent) in the March quarterly median sales price, the report reveals.
Andrew Henderson says a growing population and employment opportunities were contributing to a strong property market. Picture: Jerad Williams
REIQ Gold Coast zone chairman Andrew Henderson said he expected interstate migration to continue to benefit the city.
“I expect the market to remain strong,” he said.
“There is a heavy amount of interstate buyers moving here.
“I was at an auction recently where the winning bidder was from Sydney and the underbidder was from Melbourne.”
Mr Henderson said growing employment opportunities were also attracting homebuyers to the city.
The Gold Coast property market is expected to remain strong.
“We have some of the best health facilities in the country and our universities are world recognised.
“Those two things alone complement the tourism industry and the lifestyle aspects that the Coast offers.”
The report found the fastest-selling suburbs on the Coast included Worongary, Merrimac, Highland Park, Mudgeeraba and Carrara.
It also revealed the rental vacancy held tight throughout the first quarter of the year at 1.1 per cent.
Andrew Bell says the Coast had evolved from a tourist town into a vibrant city with an expanding economy. Picture Mike Batterham
Ray White Surfers Paradise Group CEO Andrew Bell said the Games heralded the next chapter for the Coast, as it evolved from a tourist town into a vibrant city with an expanding economy.
“The city’s property market is riding the irreversible momentum that has now come to the Gold Coast in terms of economic diversity and with more employment options we will need more housing options for people,” Mr Bell said.
“We are no longer going to be subject to tourism upsides and downsides as we were in the past because our economy has well and truly diversified beyond just tourism.”
Australia’s golden triangle of opportunity
It was great to be back on the Gold Coast for the 21st annual Australasian Real Estate Conference (AREC), attended by over 4,000 of Australia’s best industry professionals. While I was there I was once again reminded of how much potential the South-East Queensland property market is offering both sea changers and investors at this stage in its market cycle.
In my view, Brisbane is the best market in Australia currently for short to medium term price growth, with the value gap between it and the other big East Coast capitals as large as I’ve seen it in many years.
When you factor in the key drivers for future growth – liveability, affordability, scale and future economic prospects, they all suggest that Brisbane is a market to invest in. Check out the latest statistics from CoreLogic below.
Value gap – median house prices
Value gap – median apartment prices
I’ve been bullish on Brisbane for many years and in hindsight, I called its next growth phase a couple of years too early. It’s had some growth in recent years but there is a lot more to come over the next few years.
According to McGrath’s top prestige agent in Brisbane, Alex Jordan, one of the dominant trends today is downsizers buying up luxury apartments.
Alex says: “Despite the reported oversupply in Brisbane’s inner city apartment market, we are seeing great strength in the prestige apartment sector.
“The luxury apartment market ($1M+) is driven by owner occupiers, particularly baby boomers and empty nesters, who are attracted to less maintenance and better accessibility.
“Popular suburbs include New Farm, Newstead, Teneriffe, Kangaroo Point, South Brisbane, St Lucia, Paddington and the Brisbane CBD. These areas offer a desirable lifestyle with an abundance of shopping, dining and entertaining precincts at their doorstep.”
South East Queensland has so many options for asset-rich, cash-poor southerners. Many of our customers in Sydney and Melbourne are looking closely at South East Queensland both for investment and a potential sea change. I believe its affordability will continue to attract record levels of interstate migration.
If you live in Sydney or Melbourne and you’re struggling with the mortgage and cost of living, Brisbane is a fantastic alternative. It offers big city job opportunities, high quality education options and the chance to transform your financial future.
The boom delivered Sydney and Melbourne home owners a capital gain of up to 75% – that’s enormous new equity that could be cashed in to fund an amazing new lifestyle with far less mortgage stress up north. Plus, you’d be buying in just before Brisbane’s next wave of price growth. It’s the perfect scenario.
I believe the area from the Gold Coast to Toowoomba and up to the Sunshine Coast is Australia’s golden triangle right now.
Toowoomba, with its expanded airport facilities which have opened up easy access to the south, is the perfect and affordable treechange destination. Known as Queensland’s Garden City, about 2,300 people moved here from Brisbane last year for its cheaper house prices and enjoyable regional city lifestyle.
Both the Gold Coast and Sunshine Coast are also appealing sea change options benefitting from a raft of new infrastructure that will drive further population growth and generate more local jobs.
Brisbane is one of the world’s great cities but I don’t think this is fully realised as yet. If you haven’t been to Brisbane for a number of years, get on a plane. This is a thriving city that offers many of the lifestyle amenities you love about the southern capitals but at a much cheaper price.
I think Brisbane will also become very attractive to migration and investment from Asia in the years ahead.
South East Queensland is offering opportunity everywhere for both owner occupiers and investors alike. Now’s the time to consider what Australia’s premier lifestyle market can do for you!
Why Brisbane property is set for great capital growth
Over the last 10 years, Brisbane has suffered the GFC and floods. As a result, prices are now extremely affordable for a capital city. The Brisbane market has some of the best growth prospects nationwide, so let’s explore why this market is set to take the gold medal for capital growth.
Since the GFC, net migration levels have been very poor for Queensland. However, net interstate migration to Queensland has tripled over the last three years. Interstate migration to Queensland fell to a low of 5,753 in 2014, increasing to 11,581 in 2016 and 15,716 in 2017.
The majority of these people are moving from Brisbane, theCoast and the Gold Coast. This increase in migration levels is due to housing affordability compared to other states, improving employment markets and the lifestyle factors that come with those two factors.
There is a surge of major development and infrastructure projects currently underway in Brisbane, to the sum of $12 billion.
Examples of these major projects are:
- Queens Wharf ($3 billion) – Comprising of 1,000 hotel rooms across five hotels, a residential precinct of 2,000 units, a 100-metre sky deck, 50 bars and restaurants and a pedestrian bridge connection to Southbank. This will completely reshape the Brisbane’s river CBD precinct.
- Cross River Rail ($5.4 billion) – The project will deliver a 10.2-kilometre rail link from Dutton Park to Bowen Hills, with 5.9 kilometres of tunnel under the Brisbane River and CBD, connecting to both northern and southern rail networks in and out of the CBD.
- Brisbane Quarter ($1 billion) – This project is a mixed-use precinct incorporating office, retail, hotel and residential uses.
- Brisbane Live ($2 billion) – A new entertainment precinct located on top of the Roma Street rail interchange hub. Facilities include a $450 million, 17,000-seat arena along with multiplex cinemas, an amphitheatre and proposed commercial, residential and hotel towers.
Last year was one of the strongest years for job growth in Brisbane’s history. In the last 12 months, Brisbane’s jobs growth has increased by 7.6 per cent. As a result, unemployment has fallen across the board to 5.5 per cent.
Recent jobs growth has been driven by Queensland’s service industries. While the resources sector has cut 22,000 jobs over the past two years, four other industries each created more jobs than were lost in the resource sector over that period: health, education, professional services and accommodation and food services (which is closely related to tourism).
The median dwelling across Brisbane cost 6.3 times higher than the median household income. As a comparison, Sydneywas ranked the second worst most unaffordable market in the world. House prices are a whopping 13 times higher than the median household income.
These factors are significant for Brisbane’s capital growth prospects over the coming years. Well-located houses (not units) are expected to be some of the best preforming sub-markets in Australian real estate.
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