Did you know that the vast majority of property investors make their purchases locally?
There are multiple reasons why this happens, many of which can cause a property investor to miss out on some of the best opportunities our vast nation has to offer. Consider the current environment we find ourselves in: the cash rate is at an all- time low which has stimulated affordability in our most expensive city – Sydney.
Would Sydney be the best place for an investor to purchase in 2015? I’d suggest not. This is because Sydney has just undergone a significant period of price growth, meaning in most cases you are just paying for the growth of somebody else’s asset.
The national property market operates in waves, and typically all cities follow a similar trend or ‘line’. What differs, however, is who is at the top of the cycle each time and therefore where the best opportunities lie. Consider the below table of the last ten years in residential property:
As you can see, there have been six major ‘price growth peaks’ since 2005. If you consider Australia’s top three cities alone, you can see that Brisbane has endured the longest ‘leading peak-free’ period, followed by Melbourne.
What this illustrates to us is that maintaining a mindset of investing locally can strongly hinder a wealth creation strategy focused on property. Focusing on one market individually (say, Sydney) means that an investor will have to wait for their city’s next ‘leading peak’, putting them back years (or a decade) each time. It will be quite some time before Sydney will again lead Australia’s housing market in price growth.
Once the most opportune city or region has been identified, the next step is to determine what property in that area is worth your investment. Operating in different states and cities can be an uncomfortable step for a property investor which is where the professional services of First Link Property comes in.
First Link Property do not operate in the ‘retail market’. What this means is that for you to work with us, you have been referred from the services of another (it may be your financial planner, accountant, real estate agent, investor group or otherwise). We will work alongside them to ensure you are able to make the most of the national property market rather than just the local one you’re familiar with.
It’s a tough job staying on top of the national property market but somebody has to do it! To stay in tune with our thoughts and updates, you should also join us on social media. Just search First Link Property and like, follow and/or subscribe.