With much debate in the media over the current direction of the economy, you may well be asking yourself whether now is the right time for investing in property. Richard Sheppard sheds some light on the subject…
With such varying views about the state of the economy, the direction of interest rates and the impact of overseas events, it’s often hard to find clarity about the right time to invest in property.
The main thing to remember is that you are investing in one or a few properties in a segment of the market, not the whole economy or the whole property market. While these overall market factors may have some influence on your smaller market, it’s important to remember that in all of Australia’s recorded history, there has always been more than one property market somewhere performing very well. In fact, overall the whole market has been growing at more than 90 per cent of the time.
So the real question is, “Are you likely to find a property now that is expected to give you good and low-risk returns for the foreseeable future?” The answer to this question is absolutely, particularly if you do some sensible research and get some good advice.
I have found BIS Shrapnel one of the most conservative, sensible and qualified economists specialising in property in Australia. BIS Shrapnel are forecasting property in all Australian states to have positive growth over the next three years, but specifically forecast Sydney, Perth and Newcastle to have 18 to 19 per cent growth over the next three years.
My top pick of these areas is Newcastle. Here’s why:
NSW has the highest undersupply of property in the country, more than double that of the second most undersupplied, and far higher than it has ever been before. Newcastle has the highest rate of investment of anywhere else in NSW and is exceptionally affordable with great topography, beaches, and proximity to the Hunter Valley.
The two-speed economy in Australia is in top gear in Newcastle. It is creating great employment opportunities and has more than twice as much the investment Darwin had six years ago before it proceeded to double in value.
So, while there are plenty of areas that I would not invest in right now, there are also many that I most definitely would – it’s just a matter of doing your research and getting professional advice to find the right market at the right time.
Richard Sheppard is the Managing Director of inSynergy Property and Finance Solutions. inSynergy provides professional property investment advice, property market research, specialised mortgage broking services and is an accredited investment property buyers’ agent. Visit www.insynergy.net.au or phone 1300 308 808.