Property is a more tangible investment than shares or bonds
If you are not planning to live in your new home you need to consider these key points to ensure a safe and successful investment.
Buy where the jobs are:
People need jobs and communities with job growth will show population growth. A growing population means an increased demand for property. Today there are nearly 19 million Australians, this is likely to grow to 25 or even 28 million by 2051. In Melbourne, 200,000 people live within 5 kilometres of the city centre, approximately 3,500,000 live further out, this is a ratio of more than 17 to 1.
Offer the best lifestyle:
While Australians are working harder, they are placing more emphasis on lifestyle and so want better fittings, better appliances and storage for a multitude of sports equipment - bicycles, surfboards, snow skis and room for pets. Families want access to excellent schools, sporting and cultural facilities, health care, transport, restaurants and cafes and access to beautiful countryside and recreational areas.
A home is something special:
If you purchase a faceless unit amongst thousands of other units, even a good location won't get you spectacular results. Living in a flat or apartment in a 30 or 40 storey skyscraper can be claustrophobic and there is little sense of community. People lack privacy and complain of rising noise, lack of carparking for visitors and the inconvenience of waiting for lifts and having to carry shopping bags long distances from the parking bays. There is also the fear of falling from the balcony or being trapped in the elevator.
When purchasing property remember the value is in the land, it makes good sense to buy land that has a special feature such as a view or access to a park or lake. Most important is to purchase large residential lots of 700 – 1500 sqm, these are scarce in new developments and therefore will always be highly prized.
The real estate market does not grow in value consistently year by year, history shows that the property market tends to jump up in steps followed by a levelling out of prices for a few years. You need to give property time to increase in value. On average, Australian houses double in value every 7 to 11 years. The average increase in property values in Melbourne over the last 60 years is between 10 - 14% pa. Therefore, with the right investment those who are patient will do well.
A good property should be located in a desirable area, one that is close to work and the amenities which help to create a lifestyle that will be sought after by renters and future buyers alike.