Published on 19 October 2005 at 06:10 pm
Filed under: Australasia:- Australia Property Guides » Australia Property Investment Facts
Many people question whether property investment in Australia remains a profitable possibility seeing as the real estate sector in Australia has been one of the most positively affected markets during the latest worldwide property boom.
As house prices across the country are now at record highs in relation to income levels in Australia this has made property ownership a less achievable goal in real terms for many Australians, this has pushed up demand for rental accommodation so far that a rental crisis is now looming in many major Australian cities - thus creating a ripe market for the property investor seeking immediate income and long term growth.
A report in The Economist magazine highlighted the findings of many global forecasters who speculate that because the Australian property market in the major cities of Sydney, Melbourne, Brisbane, Perth and Adelaide has expanded so quickly and so far, real estate is now over priced and due a correction because in real terms property has become unaffordable to the local consumer.
Supporting these findings are the Housing Industry Association of Australia’s own conclusions that the residential real estate market in Australia is due an orderly short term slowdown until 2007. In the interim the HIA’s Chief Economist has introduced a new issue into the equation and that relates to the fact that many major Australian cities beginning with Sydney are facing a rental accommodation crisis. If demand for rental accommodation in Sydney continues at its current high level and approval for new property developments in the city remain at their current low level, the city will face a critical demand/supply situation by 2007 with other cities hot on Sydney’s heals according to the Housing Industry Association.
From these findings there are two conclusions that can be drawn by a property investor. Firstly rental prices will increase in all the major Australian cities making any investment made today into a buy to let property potentially immediately profitable; and secondly, property purchased now will be in demand from a resale point of view in the medium to long term and because the Australian market has proved so popular for so long there is no reason to suspect that this situation will change.
So, in answer to the initial question posed about whether property investment in Australia remains a profitable possibility or not, the answer is most definitely yes! In a bear market a property investor can still profit if he purchases carefully.
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