If you want to invest in real estate in Australia, now is the right time! But you’ve probably heard some conflicting information about the current atmosphere in the property market, so I wanted to share how I see the current situation.
There’s a lot of talk about the current market sentiment in Australia and what it will mean for 2023. If you go online, visit any news website, or turn on the TV, you’ll see a lot of negativity about the economy in general, but particularly about the Australian property market. There is, overall, a high level of pessimism in the mainstream media about the economic state of not only Australia but the world.
There are some very valid points to consider – there’s the war in Ukrain, economic recovery after the pandemic, and in Australia, the highest inflation level since 1990 (source: Australia’s inflation hits 7.3%, the highest level since 1990, with interest rates now likely higher for longer).
But there are still positives to be found.
Many of the experts and people who have predicted property market crashes in the past are saying the same thing – the market is correcting. But some are saying property prices will drop 5-10%, while others are predicting much higher drops and even going as far as warning of a worst-case scenario, 50% decline.
I do not buy into any of that.
I’ve always been a huge believer in supply and demand when it comes to Australian property. And demand for property in Australia continues to be very, very high.
You can never truly predict the bottom of the market, which is why I say that if you want to invest in real estate, it’s always a good time to buy property. Whether the market is declining or appreciating, there’s always good buying to be had – you just need to know where to look.
So, let’s look at some positives of the current market.
- Rental demand is currently the highest it has ever been, particularly in Western Australia and Queensland, where the demand is unprecedented. You only have to jump onto a real estate website and check out the prices of rentals to see this demand in action.
- Vacancy rates in Queensland and Western Australia are fast-approaching all-time lows, and that’s before we begin welcoming more skilled migrants and international students back into the country .
- This demand for rentals is not going anywhere! In fact, it is set to increase dramatically over the coming years. When you think about the current demand, the stock currently available for people to rent, and the several hundred thousand skilled migrants and international students planning to enter the country, this rental squeeze is only going to increase.
These three reasons alone make right now a great time to invest; but if you’re thinking about investing in a newly built property, or a house and land package, there are some additional benefits:
- Your property will be in higher demand than older, established properties. Renters like houses that are new, high quality, clean, and don’t need maintenance – all of which you can find in a new build. In a market where rentals are already attracting a high price, you can ask for a premium for your new property.
- You’ll spend less on maintenance and warranties in the coming years than if you buy an established property, which will allow you to maximise earnings from your rental.
- Construction prices are beginning to stabilise and price rises have stopped, making new builds a value-packed option. I’ve even heard of instances where some builders are offering discounts to secure business, as the market becomes more competitive again.
Don’t forget that it takes time to find the right land, build your property, put it on the market, and find the right tenants – so now is the time to start looking if you want to invest!
Despite what you may see in the media, there are a lot of positives in the market.
You do still have to tread carefully; I don’t want you to enter real estate blindly. But it’s certainly not a time to be put off investing. In fact, it’s a time to dive right in, do a bit of research, and speak to somebody that has experience, so you can get a clear picture of where the market is at, and make an informed decision from there.
