It is no secret Australians love their bricks and mortar.
Whether it is a dream home or a clutch of income-making properties to fund the good life, real estate is unquestionably this country’s most popular asset type.
Across the nation, bricks and mortar is valued at more than $6.7 trillion today, according to industry data.
Superannuation is worth more than $2 billion while listed equities are slightly less.
According to the Australian Bureau of Statistics, there were roughly 10.3 million residential dwellings across Australia in March 2019. 780,400 of these were in South Australia.
But is property a safe investment? Is it wise to spend big bucks on a single land title?
The answer is a ‘YES’.
Here are 5 reasons why investing in the property market is a conservative investment:
• Our growing population – According to the Australian Bureau of Statistics, Australia’s population grows by a net total of one person every one minute and 24 seconds. International migration is growing by one person every two minutes and 25 seconds. There are currently about 24.6 million people living in Australia.
Everyone needs somewhere to live, which means ongoing demand for new housing is assured.
• A stable government – OK, there have been more changes to Australia’s political leaders in the past decade than at any time since federation. But, in the global context, Australia is still viewed as a steady democratic nation. Our track record for sound governance is respected. People want to live here because they drawn to our multi-cultural, stable and largely peaceful community.
• Record low interest rates – The Reserve Bank dropped its official cash rate to its lowest level in history (1.0%) in July 2019 and is likely to cut it again before the year is through. Many advertised mortgage interest rates are below 5%, even 4%. Economists say the Reserve Bank is unlikely to lift its rates too much in the foreseeable future. This, in turn, means retail lenders’ interest rates should stay about the same. Many investors are enjoying very low interest rates, and therefore greater rental income.
• Steady long-term capital value growth – Over the 30 years to 2015, Australian housing prices grew by 7.25% on average every year, according to ABS data. So while some alarmists may talk about ‘price bubbles’ and ‘crashes’, official figures tell another story. Australia’s property values do move through market cycles: fact. But supply and demand mean the long-term trend is up and this steady movement is forecast to continue this century.
• Upbeat tax climate – Australia’s tax settings encourage investment in property assets. One example is negative gearing, meaning individuals may be able to offset losses from rental property against annual income tax debt.
At Rosie & Rosie we believe in property investment and work with our clients to make it as easy as possible. Our simple approach to investing ensures your portfolio is managed professionally, grows as quickly as possible and with minimal fuss.
For further details, contact Rosie & Rosie at http://rosieandrosie.com.au/contact/