The property market in Australia can be rather tricky to gauge as the key influencers comprise of the media, property developers and marketers. These influencers work together to create confusion among investors by presenting past data to predict the future success of the properties.
For example, they stipulated that the hot spot for property investments is Sydney, though due to the high prices of its properties, Sydney has fallen behind as the preferred investment location. Trailing behind Sydney is Melbourne followed by Brisbane, Perth, and Adelaide. These statements are rather conflicting at times and as a result, investors become wary in building and diversifying their current property investment portfolio. They do not dare to take the risks.
And while the influencers advocate the use of the traditional investment method, which is to wait and hope for the price of the property to inflate, a better solution for investors is to find out when and where is the most profitable property located and choose to purchase that instead.
Every investor has to understand that every suburb in Australia has its own potential primarily due to the fact there are many economic factors that will influence its market value.
One such example is Core Logic published an article indicating all dwellings in Sydney has been going down since October 2017. The article is quite inaccurate in the sense they mentioned it was all dwellings and the dwellings are not distinguished into asset classes and land size.
For a better understanding, the article indicated a 1-bed house in Liverpool south west of Sydney did not fair a good economic indicator as compared to a 5-bed house with a 700m2 land size in Sydney eastern suburbs. However both houses are reported to be going down, when the fact is the economic indicator of the house located at the eastern suburb has remained stagnant.
Some influencers use the “Down Term” of Sydney and Melbourne to promote Brisbane and QLD as the next big thing, while others promote this is the opportune time to purchase units and townhouses in Melbourne inner city.
Then there are companies that only promote Brisbane and Melbourne because they claim Sydney is too expensive. They present their case with information on affordability, past statistics and other seemingly relevant information to attract and convince investors to purchase properties at inner cities.
The fact is the commission base in Sydney is very low – close to 1% to 2% while in the Brisbane and Melbourne, the commission base is 6% to 8%. A huge difference.
False information, or inaccuracies in reporting from these influencers make it all the more difficult for investors to make solid investments.
If you ask me, I believe the property market is still good and rising. Now is still the best time to invest in properties, but as an investor, you have to be more cautious to not fall into the trap of influencers, mainstream sellers and wealth advisors.
Get independent advice as to where is the best place to invest in. Opt for good locations with high demand and better economic factors. These considerations will contribute towards the success of your investments.
Contact us to analyze your current property portfolio and for independent advice in understanding more about the property market in Australia.