2020 was a year like no other in Australia and, thanks to COVID-19, Australia saw its first recession in over thirty years. But now that real estate markets have well and truly bounced back in almost every major Australian city, many of us are looking towards property predictions and asking ourselves; “what next”? So, is now a good time to invest in property in Australia? Keep reading to find out!
Forecasting is always difficult; a fact that 2020 reinforced like nothing else. At the start of last year, no one could have imagined that we’d all be wearing masks to the supermarket or worrying about the supply of toilet paper. But we got through it and the Australian property market proved itself to be highly resilient, even in the face of chaos.
In fact, despite Coronavirus, property prices in Australia actually rose in every major city in 2020, except Melbourne. Overall, property prices increased by three per cent nationally, according to Corelogic. So, is now the perfect time to invest in property in Australia?
Why invest in property in Australia
The important thing to remember is that Australia is such a diverse market, depending on where you’re looking to buy. As such, not all areas should be treated equally. Louis Christopher, the managing director of SQM Research, expects Australian property prices to rise up to nine per cent throughout 2021. He identifies Perth as likely to be the best-performing capital city, with growth of eight per cent to twelve per cent. This is followed closely by Sydney with a projected growth of up to eleven per cent.
1. Record low interest rates and government incentives
All in all, now is a unique time to look into a property investment in Sydney. Property prices are increasing; it’s set to be a huge year in the property market!
The recession in Australia saw a dip in property prices in mid-2020. Yet prices have quickly rebounded now that the pandemic has, for the most part, been contained.
The Australian economy is recovering, consumer confidence is up and over 70 per cent of the jobs lost during COVD have been restored.
Record-low interest rates announced towards the end of 2020 make buying property extremely enticing for both first home buyers and investors. For the first time in Australian history, investors can keep costs low and pay off their investment quickly; definitely something worth taking advantage of.
2. Future growth potential
If you invest in property in Australia and your property value increases, you’ll benefit from a capital gain when you sell, minus any Capital Gains Tax you are required to pay. The great thing about the property market in Sydney is that it has shown long-term steady growth. Therefore, it’s fairly safe to buy property believing it will continue to do so.
If you buy property in Sydney in a stable area, you’re sure to see capital growth, especially if you’re buying as a long-term investment. The key, like any large financial decision, is to do your research thoroughly and buy what’s best for you. Some property investors might want to purchase a renovated apartment that is ready to rent. Others might prefer a property with the potential to add value with, say a small renovation, in order to guarantee significant capital growth.
If you don’t want to do a full-scale renovation, you can add value by completing a few cosmetic updates. That might include repainting, adding new carpets or changing the light fittings.
3. Long-term security
Last year’s volatile market proved that property is a sage investment decision. It proved the property market has the ability to weather even the darkest storms. Property is widely known as one of the more secure options available to investors. And, by buying property now before major investor activity picks up again in Sydney, you’ll be ahead of the curve. You may even be able to pick up a bargain in certain areas.
Property Investment Professionals of Australia’s (PIPA) chairman Peter Koulizos says that CBD apartments will be far more affordably priced this year. But this window may not last long. Once international students return to Sydney this year, rental markets in the city will pick up. When it does, demand for these properties will increase.
When it comes to making the decision to invest in property in Australia, one thing is for sure; it’s going to be a busy year! By doing thorough research and taking into account your unique circumstances, you can find the investment property that’s right for you.
Boutique Property Agents have a thorough understanding of the Sydney property market. We’re also always willing to provide expert advice for those who are considering buying or selling. For expert advice, contact us directly or start browsing our current listings to find your next investment property.