While a completely risk-free investment is rare, five factors have been identified which justify property as a relatively sound investment.
- Historical Market Corrections: Australia’s property market has always corrected itself in the past. Generally the media portrays the occasional decrease in value as a more dramatic property market decline. Properties tend to keep their value long-term.
- Longitudinal Growth: Even though properties may sometimes slightly decline in value, investors who are prepared to be patient will reap greater rewards. A slight dip in the market should not signal investors to sell as it is common for properties to continue to appreciate in value once the market begins to improve again.
- Historical Crashes: Australia has only ever experienced one real market crash after World War II. The nation’s economic situation was completely different now and compared to the rest of the world our economy is fairing quite well.
- Cities Won’t Crash: Citizens of major cities are not going to move due to a slight dip in the market. Although the Gold Coast has seen a drastic fall in property prices recently, the optimistic investor may see this as a good time to buy.
- Causes: Evidence shows four causes for a property market crash, a severe recession, high unemployment rates, rising interest rates and oversupply of property. However, by researching well and investing in sounds areas most investors will be successful.
What are your tips for great property investment?