More often than not, Australian investors don’t use the property cycle to their advantage; instead, they invest in high demand markets, opting to be one of the many sheep instead of the shepherd. Why? It takes more courage and foresight to be a shepherd than it does to be a sheep.
Our capital city markets, although correlated, tend to lag one another with Sydney historically leading the pack. This leaves opportunities to be exploited during most points in a national property cycle. At the moment, those opportunities exist most acutely in some regions of Melbourne, but more about that next month.
In the year ending June 2016, Sydney prices grew at an annual rate of 10.97%, declining from 2015 levels.
Melbourne led the capitals for price growth in the 12 months to June at 12.15%, while the nation’s capital experienced 4.05% growth. Hobart witnessed a 5.73% increase, Brisbane’s prices rose by 6.07% and Adelaide recorded a 2.19% rise.
Darwin and Perth were the only two capitals where dwelling priced declined, with the cities down by 0.14 and 4.59% respectively.
Tax Office statistics show that almost 1.9 million Australians declare rental income, that’s just under 8% of the population. According to the Domain consumer insights study, the average age that Gen Y Australians became investment property owners is 25 years, whereas the average age for Gen X was 35 years and 45 years for the Baby Boomers. In addition, 16% of Generation Ys own two or more properties, compared to 17% of Baby Boomers and Gen Xs.
Interestingly, nearly 75% of investors earned less than $80,000 per annum. I’m often asked about the prospects of negative gearing and my answer always draws on the above. Property investment is no longer the exclusive playground of the wealthy. Australians from all walks of life, many of you reading this now, are opting to invest in property in more affordable markets and rent where they want to live.
In fact, the share of first home buyers purchasing new property for owner-occupation slipped to 13.7% over Q1 2016, down from 15% in Q4 2015. Over the same time, the number of first home buyers purchasing new property as an investment increased over 2% to 10.1% in Q1 2016.
Get educated about property, get the right advice and ensure you have a dedicated and qualified support network. There’s no better time to start than today.
Written and Sponsored by Blue Wealth Property
Blue Wealth Property, property investing is a very powerful way to create wealth and our research is the foundation upon which we have supported thousands of Australians worldwide.