Required Fundamentals underpinning property have never been so strong!
Property prices in Australia are on the increase due to the following strong fundamentals
- Property pricing strengthening on the back of …
- Recovering and secure Economy.
- Strong Banking Industry.
- Continued Population Growth.
- Migration into Melbourne is currently at 1750 people per week – record levels of population growth experienced nationally at over 2% per annum.
- Aging Population of baby boomers who need to boost their retirement funds through investing in property.
- House prices to high for local Australians to purchase who want to own in the market resulting in the :
- Purchase of a smaller unit or
- Purchase an apartment.
- Or purchasing an investment in an area they can afford to buy in, but chose to rent in the area they wish to reside in.
- Investors have come back strongly into the market
- To purchase now at today’s price.
- Insufficient supply of housing available now.
- Very High Demand vs Total Under supply of accommodation.
- Trend to continue with more migration and immigration.
- Trend of lack of supply will continue as the building industry cannot catch up to the demand.
- Australian Dollar strong!
- Your currency devaluation against the Aussie Dollar, possibly sending you behind the 8th ball as they say.
- For 10% now, secure property at today’s price.
- High demand for Property within 8 to 10km of CBD and spreading outwards due to affordability issues.
- The Australian system to purchase a property (for the majority of purchases) is through an Auction.
- Resulting in :
- Emotional purchasers bidding against each other just to secure a property are inflating property prices.
- Emotional purchasers are out bidding the astute investor who, in today’s economy, should secure at least a 5% rental yield.
- There is an alternative to buying off auction and that is through private listings / sales.
- No auctions, no bidding wars, no emotions … your decision will be based on the numbers.
- Landlords achieving record Rental Returns, and predicted to strengthen as interest rates increase.
- Melbourne rents increased by 12.7% in the last 12 months.
- Rental Vacancy Rates at a historical low of less than 1% (occupancy rates at a high of 99%).
- Capital Appreciation at unprecedented growth rate of 18.3% in Melbourne during the last 12 months.
- Investing in property today has not in our lifetimes presented a more opportune time to do so.
Summary Reminder
- Victorian Government 2030 plan.
- Increased population from 5.4 million up to.
- This growth is planned to stimulate the Victorian Economy.
- Melbourne will become a larger city than Sydney.
- In 2030 there will be a shortage of an estimated 300,000 dwellings.
- Developers, builders and financial institutions are unable to keep up with the excessive demand.
- The economic principle of supply vs. demand will underpin the current value of property ensuring continued capital appreciation.
- The Current shortage of accommodation will evolve into Higher Rentals being achieved which are currently sitting at record highs.
- Current construction levels are below what they have been in previous years. With no solution to keep up!
- For more info on Melbourne 2030 click here
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