The question on every keen investors lips!
Is it the right time to buy property in Australia?
The very first question you need your ask yourself, is were you planning on buying property before the current health Pandemic, Coronavirus took over?
If your answer to that is yes, then my answer is, absolutely! You should be pushing through with your planned purchase AS LONG AS you have a strategy that’s firm and concise and you know what you’re looking for.
If you’re being emotionally driven, and you’re in it just because you think you’re going to get the next bargain, then now is not the right time. This is when bad decisions are made and mistakes happen. You must always stick to your strategy and have the long-term game in mind.
So we know that property, like most asset classes we should be investing in, are ten, fifteen, twenty year stories. Be patient, let them do their thing. If you’re feeling rushed, in my opinion, whether you buy this year, or next year, I don’t believe there’s going to be massive difference and if there is, it is a long term play as I mentioned. Historically, trying to pick the market rarely works.
Interest Rates are at an all time low! So again, if buying is part of your strategy, make sure you take advantage of that in these times, because long term, they’re going to be hovering around that six or seven percent as an average, and between you and me, these low interest rates aren’t going to stay around forever.
In most cases at present, buying an investment property with a 4% gross yield or higher (which is quite common) will give you a positive cashflow position after tax. Furthermore, if you used cash as your deposit, there is every chance you can even factor in paying the principal if you choose too. This was unheard of 5-10 yrs ago and may not be repeated for years to come, if ever.
There’s also a housing shortage in the country right now, and that gap is actually widening, so there’s opportunity in many States of Australia right now. You just need to get the research done and get the knowledge under your belt to be able to take action.
Simply put, there are more people being born and moving into the country than there are people leaving and dying, so they need to be housed. Construction rates are not where they need to be to keep up with this demand and the gap is actually widening. Business Insider reported earlier this year that Sydney alone is building 10,000 dwellings less than they need to per year to keep up with demand.
There are also less buyers in the market now, because of the fear and emotion that’s grappling so many people at present, and the uncertainty of what’s happening in the next three, six, nine, twelve months and forward.
Emotional decision making may affect people’s lives forever. That’s where the savvy property investors come in. With their strategy in place and their clear foundations set, they can really take advantage of the markets over the next year or two.
You don’t want to be the one sitting back thinking, if only I acted when I should have!
Disclaimer: This article should be used as a guide only. It does not take into account your personal circumstances. This article is not intended to be your sole source of information when making a financial decision. It is advised that you consult a professional financial advisor before acting in any way.
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