7 Reasons why Today is the Best Time to Start Investing in Property
by Arina Smith Real Estate 14 February 2022
If you spend some time reviewing the last 30 years of property investment in Australia, you will notice that it has been very successful. For anyone looking to get a comfortable retirement lifestyle, investing in property is certainly a smart decision. In fact, you are unlikely to find a better way of building wealth in Australia at the moment than through property investment. Have you been thinking about venturing into real estate but still have some doubts? The following are 7 reasons why you should invest in properties today.
7 Reasons why Today is the Best Time to Start Investing in Property:
1. The scarcity of Supply and Growing Demand:
For anything to be deemed valuable, it must be scarce and that scarcity must be driven by actual demand. Thus, when demand is more than supply, the value of that thing is likely to rise.
The housing shortage in Australia is one such thing. In fact, research from ANZ revealed that Australia has a housing shortage of over 250,000 dwellings and that the shortage is unlikely to be met any time soon. By investing in real estate today, you will become part of something whose value is only going to increase, for example, in areas like Blue Mountains real estate which provides good demand and price growth.
2. Changing Demographics:
Improved security and advancements in science and technology are lengthening our lifespans. In fact, it is predicted that by 2050, the average life expectancy for males will be 92 while that for females will be 93.
As such, people will need housing for longer. So, what does that mean?
The current housing shortage is only going to get dire since children cannot inherit their parent’s houses while the latter still lives in them. Another important demographic factor to consider is how Australians are choosing to live today. Today, more and more people are opting to stay single for longer. Additionally, and unfortunately, the rates of separations and divorces are continuing to rise.
Thus, instead of a single household containing an entire family, separated marriages are leading to people requiring more houses. While this is unfortunate, it is just how things are, and is creating an even bigger demand for housing.
3. Population Growth:
While Australia might be the same size as mainland USA, it has a population that is roughly 1/10th of the former. Nonetheless, that is soon going to change since Australia has the highest population growth rate in the world. That is great news to a prospective investor since the ballooning population will need a place to live. Forecasts indicate that going by the current growth rate, the country’s population is expected to reach 48.3 million by 2061.
That will be 16.5 million more people to what we currently have. Calculations show that to accommodate that figure, we will need about 156,000 new dwellings every year!
Whenever one is thinking about investing in a venture, their biggest concern is often the risk associated with the investment. And while that concern is legitimate, you will have little to worry about in real estate.
Real estate is one of the most secure investments you could go into. If they weren’t, then why do banks almost always give top priority to loan-seekers who have properties?
This is because the property is considered to be excellent security, and it is the main reason why a bank will lend you up to 90 percent of your property’s value. They know that property value has never fallen over the long term.
Another factor that heavily contributes to the security of the real estate market is its size. At the moment, Australia’s residential property market is estimated to be worth around $7 trillion.
What makes this astronomical figure to be even more significant is the fact that 70 percent of those properties are owned by Australian residents – people owning or paying off their homes.
The other 30 percent is owned by investors. Homeowners have provided the property market with a safety net in that, even if investors were to pack their bags and leave, the market will not collapse.
And while property prices are bound to fluctuate from time to time, the massive homeowner market always underpins property values.
Another factor that adds to the security of property investments is that you can insure your investment against most risks. This is not a luxury you will find in most other types of investments. And considering that more and more people are looking to get houses, you cannot find a more secure investment than real estate.
5. You Have More Control Over Your Investment:
In contrast to other types of investments, real estate allows you numerous options to grow the value as well as the income of your property. Additionally, you get to decide where to buy, how you will buy, and when to sell.
As mentioned earlier, the state of the economy on any given day will have an impact on property values. Nonetheless, it is not that significant since shelter is a basic need and thus people will always need a roof over their heads in spite of the prevailing economic condition. Thus, you can always wait out the condition and make your next move when the dust settles and prices are reasonable, and that is something that you cannot afford to do with stocks or shares.
6. The Taxman Has your Back:
If you have an investment property, it will allow you to claim a range of tax-deductible expenses which will help you cut down on your tax bills thereby improving your cash flow. If you have a good accountant, they can help you cut your tax expenses by thousands of dollars through your investment property. This is another reason why you should approach a buyers to advocate in Brisbane to help you secure a good property deal.
7. Tenants Will Pay Your Mortgage:
The best thing about investing in residential properties is that you can sit back and watch your tenants pay down the mortgage, all while it grows in value.
Property is one of the best investments that you could venture into. However, if this is your first dance in the property market, you need to have the right people around you. Experienced professionals will ensure that you do not make typical rookie mistakes that newbie investors make, costing them a lot of money. Buyers Advocate Brisbane