Have you seen the recent headlines?? BIS Oxford Economics has forecast house prices over the next three years to grow by 6 per cent in Sydney, 7 per cent in Melbourne, 10 per cent in Canberra and a whopping 20 per cent in Brisbane!
Brisbane is appreciating being favoured as the #1 investment market into the next property cycle.
However, caution is required to ensure success.
It is unlikely that the Brisbane market will echo the last few years’ growth performance seen in Sydney and Melbourne. The growth is more likely to be a slower, yet sustained upward trajectory.
There will be many articles promoting “hotspot” locations and developments to lure hopeful investors into the market.
As always, reconnect to the underlying principles of what drives capital growth, and you are more likely to do well.
There are many infrastructure projects announced which spell good news. It is important to understand when they will complete and deliver the benefits to consumers when you select locations for investment. If the delivery is 10 years away, you may be treading water for a long time before the growth is realised.
For example, promises of new affordable estates in Melbourne, with master plans that include transport, shopping centres, hospitals, etc. – have often disappointed early adopters. For the larger infrastructure to be delivered, the government generally waits until the populations can justify it. It’s a catch 22. And it’s generally not in the marketing material.
Therefore, astute due diligence is necessary to understand not only the location fundamentals, the relevant product type, the appeal to owner occupiers and tenants but also the future, deliverable growth prospects.
Added to this, it is increasingly becoming easier to borrow money and interest rates are extremely low. So with forecasting of stronger growth, easing restrictions on borrowing money and a lift in confidence, the spruikers will be out to party.
So often they speak to your emotional sensitivities and good common sense and due diligence are forgotten.
Take the time to gather your team of experts. To begin, you need finance, accounting, property and legal advice. Ensure you understand your objective, your cash flow and possible future variables. There are many great opportunities to enhance your current and future position, if you are strategic and plan well.
The correct structure, strategy and execution of your plan is essential for stress-less success.
Click here to book in for a free 30 minute discovery chat to explore this further and reduce your risk.