Why You Need to Invest in Property NOW (Hint… Prices Are Going Up)

Why You Need to Invest in Property NOW (Hint… Prices Are Going Up)   Do you want to know what’s really happening with the Australian property market? Just know that you can’t immediately believe everything coming from the media   It’s going to crash! The Australian property market has been on the precipice for years. […]

Written By freedompropertyinvestors

On February 11, 2020
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Why You Need to Invest in Property NOW (Hint… Prices Are Going Up)

 

Do you want to know what’s really happening with the Australian property market? Just know that you can’t immediately believe everything coming from the media

 

It’s going to crash!

The Australian property market has been on the precipice for years. And now, the bubble’s bursting and we’re going to see property values drop dramatically… the worst case scenario is inevitable.

At least that’s the impression you’d get if you listened to our media. 

The papers love a good story about the fall of the Australian property market. However, they’re not always so keen to highlight the real truth of what’s happening.

And that truth is that you need to start investing today.

This article explains why in just a moment. But first, let’s look at what the so-called experts keep telling us.

What They’re Telling You

 

Simply put, they’re saying that property values in Australia are falling at amazing rates.

And they’re quick to present graphs and charts that prove their assertions. Take the chart below as an example:

This chart comes from a CoreLogic report on the state of the property market. And if you take it at face value, it shows a pretty bleak picture.

We can see massive increases over the last five years in almost all of the major cities, save for Perth and Darwin that showed decreases. And in both cases, there are underlying economic issues that caused problems for them.

Next, look at the last 12 months.

Almost every major city sees declines, with only Hobart and Canberra recording minor increases.

But if you take a closer look at that graph, you’ll see that minor is a key word. Beyond Perth and Darwin, the biggest drop is the 2.5% seen in Sydney.

Now, compare that to the 20.3% increase the city experienced in the last five years and this talk of a crash may seem premature.

But we’ll get to that later.

Here’s another chart from the same report:

What we see here are the Gross Rental Yields for the country and its capital cities. We can also see the situations for the regional areas of Australia’s states.

This chart doesn’t paint a pretty picture, does it?

What we see here is a market that supposedly peaked in 2012 and has been on a pretty consistent decline ever since. We’ve gone from rental yields in the 5.5% to 6% region, down to in the 5% region, for regional locations.

The cities also saw a drop, from 4.5% to a little over 3.5%.

That doesn’t look too great for the rental market. It appears that investors make less money today than they did a little over six years ago.

And that’s the spin that the experts would place on a chart like this. Of course, they’d ignore the recoveries that we’re seeing at the end of 2018 and into 2019.

Those don’t quite fit the doom and gloom narrative. In fact, they suggest a rental market that’s starting to grow, rather than one that’s on the decline.

You may have already picked up a few hints about the point that we want to make here. While both of these charts look pretty bad at first viewing, they actually show that things aren’t as bad as they seem.

And if you look a little deeper, you’ll see that there are actually signs of a recovery on the horizon.

What’s Really Happening?

 

That very same report provides us with the following chart:

This shows us the movement of property prices as recorded in October 2019. Of course, we see the annual declines recorded in the previous chart.

But take a look at both the quarterly and monthly figures. They tell us an entirely different story.

For the quarterly figures, we actually see some pretty massive gains in both Sydney and Melbourne. Most of the major cities, barring Perth and Darwin, recorded gains of their own, too.

This is not suggestive of a market in crisis. Instead, it tells us that the market’s been in a corrective phase for about a year and it’s now starting to grow again.

The monthly figures show the same thing. And in this case, even Darwin has seen a slight improvement to property prices, which means that Perth is the only outlier.

What we see here are signs of growth. Even better, many major financial institutions reckon that this will continue into the coming years. Take this forecast from Moody’s as an example:

In 2020, we’re going to see a growth of over 5% in the value of both houses and units throughout Australia.

At the state level, we’re seeing the potential for growth everywhere. Both Melbourne and Sydney will experience substantial growth of about 7%. And every other major city, barring Perth, will record growth in at least one area.

Even Hobart’s getting in on the act with a 1% growth in house prices.

So you see, we are not in a market that’s in a crisis. We’re in a market that’s on the verge of explosive growth right now.

What Does That Mean For You?

 

Simply put…this means that you need to get moving.

This projected growth could mean great things for you as a property investor. 

If you buy today, you’ll see marked increases in the value of your property by the end of 2020. In Sydney and Melbourne, this could equate to increases of between $5,000 to $10,000 per month.

If we go with the conservative $5,000 estimate, that means a growth of $60,000 in the space of a year.

Can you really afford to miss out on nearly $60,000 to 120,000 of growth?

The Australian property market is not in a crisis. It’s simply undergone a period of price cooling, predominantly brought on by external forces.

Now, we’re about to enter the recovery phase. But if you wait too long, you’re not going to be able to benefit from that recovery.

You need to invest now so that you maximise your profit throughout 2020.

Freedom Property Investors can help you out. We work with busy professionals so that they can make sound investments. To find out more, get in touch with our team today.

 

Wishing you success with your investing,

 

Scott Kuru

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