7 Reasons to Invest in
Australian Property
Investors can invest in a number of vehicles that can generally be categorised into Shares, Businesses and Property. Here are 7 reasons why investing in Australian property is a low risk profitable option:
1. Above average returns with a hedge against inflation
On October 19, 1987 the Australian all ordinaries index fell by 46%. For 2 years following the crash, property values in Australia soared ahead as investors returned to the stability of property.
Comparing various investment sectors over 20 years, it can be seen that property provides returns higher than many asset classes and provides a hedge against inflation.
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2. Consistent investment performance
Australian property has enjoyed consistent growth with an average annual growth rate of 7% per annum in the last 40 years. The doubling in value of properties every 7 to 10 years, compounded with the leverage that property offers, this is a phenomenal Return on Investment (ROI).
Having one of the most diverse, advanced economies in the world, Australia's GDP growth is expected to continue at a steady 2.5% to 3%, making Australia an excellent investment location.
3. Strong future demand
Household size in Melbourne will fall from 2.6 to 2.25 persons.i Melbourne's population is averaging growth of 1.1% p.a. and grew faster than Sydney at a rate of 41,200 compared to the latter of 29,800. City of Melbourne households are forecasted to increase by 20,975 in year 2021.ii
The increasing population and declining household size will generate demand for an additional 620,000 households before 2030. This expanding demand will continue to push property prices up.
The preference for the majority of the population is to move closer to the central infrastructure of major population centers and be nearer to the beach. Rental vacancies spiraling down to the current 1% further reflects the demand for rental properties.
4. Generous tax advantages for investors (Gearing)
Australian tax law offers generous tax advantages to property investors. KlearPicture provides you with the information and resources you need to ensure you claim all your entitlements. Moreover it is also important to match an investment property to your financial circumstances to ensure you receive maximum tax gains without over committing.
5. Ability to Leverage
Leveraging to invest creates higher rates of return on investments. Lenders lend up to 100% on a property, more than against any other asset classes. Why? Many Australian Properties are viewed as a low risk investment with promising capital growth. There are some postcodes more favoured by lenders than others. As such, investing is now within reach for most people, as only a minimal outlay is required to secure this asset.
E.g. With as little as $150 per week, one can secure a $350,000 property investment and enjoy capital growth of around $20,000 p.a. in prime locations.
6. Properties won't vanish
The most significant difference between property and shares over the last 78 years is that many of the properties upon which that gain is calculated still exist today. Many of the companies upon which the share based returns were calculated on have vanished.
Unlike shares, property as is a tangible asset that won't vanish as a result of poor management or obsolescence. On the other hand, companies and jobs that exist today can be obsolete tomorrow. As building and labour costs continue to rise, so will land and property values.
7. KlearPicture makes the process easy
Investing in property can be a lengthy process. People who have done so alone have had to
- Research the property market
- Locate the property
- Do basic feasibility studies based on personal not expert knowledge
- Research all available 50 plus lenders to obtain Finance
- Research financial markets to ascertain loan structure
- Keep updated with ever changing tax laws
- Process their own loans
- Engage a conveyancer/ solicitor
- Engage a valuer
- Engage a quantity surveyor
- Source a suitable accountant that specialises in their type of investment
- Engage a property manager
- Some manage properties themselves and deal with tenants and repairs
- Negotiate with developers to ensure fair market value
- Ensure property construction meets legal Australian Standards
Secure investing for maximum returns is a full time job. At KlearPicture, we specialise in making this process easy by facilitating all the above.
Speculation is generally investing based on limited and less credible information, e.g. relying on advice of friends or colleagues.
Astute investors, seek education and expert guidance. KlearPicture facilitates this wealth accumulation process one property at a time, and shall assist you to invest rather than speculate to attain the financial freedom YOU deserve.
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