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Empower Wealth Blog post by Empower Wealth

Is it Time to Invest Again?

There is no doubt that residential property has withstood the doomsayers’ predictions of massive price falls of up to 40%, following the GFC.  The reasons it has stood up are well documented; Record low interest rates, a housing shortage, high rental demand, growing population, government stimulus in the form of First Home Owners incentives etc.  So, is it time to be thinking about getting into the market and competing when prices are showing signs of improving?

As an active investor myself and in helping many investors each month secure property, the question of timing is as difficult as the actual decision as to what type of investment one should be buying.

Residential property should always be considered as a long term investment, given its high entry costs (stamp Duty etc) to obtain.  So one must ensure they can hold onto the investment for a minimum in my opinion of at least 7+ years to at least allow for a traditional economic factor to influence the price of their investment.

By this influence I mean, the value and overall return of the property will ultimately be affected by the supply of land the demand and availability of housing stock and finally the ability of the market to afford the rent or purchase price on offer.  The greater the demand and ability to afford the rent or the value to buy the overall better return the investment will deliver.

If you research  the long term price value of property as we have done since 1974, you will learn more about the suburbs that have performed best over this period.  Some suburbs have delivered long term compounding growth returns of over 10% for 34 years.

Now I realise some say past performance is no guarantee, but this long term trend is very hard to argue with.  So in terms of timing an investment property, it is hard to also argue that the right locations, over the long term,  always offer a good time to buy property!

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