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The Property Outlook For Investors in 2014

The current outlook and commentary from various parties on the outlook for the property market this year will be a familiar story to anyone who has been interested in real estate for any length of time. Demand for housing as well as property investment tends to ebb and flow. According to most experts, including the Reserve Bank, we are currently experiencing an injection of confidence in the market and an upswing of rising housing prices. This is good news for anyone considering investing in property over the next year or so.

A leading indicator of the current state of the real estate market, the National Australia Bank’s Q4 residential property survey for 2013 reported an increased demand among both local and foreign property investors. The survey found that local investors, especially in Brisbane, were becoming more active in the market, with an “increase in demand for all types of new property in Q4 with inner city the best location in all states[i]. This is an important point for investors looking for new and off the plan opportunities: investors are finding that value and a return on investment is best served by buying real estate within the inner areas and surrounding suburbs of capital cities rather than rural Australia.

Additionally, according to strong early earnings results from the Australia Real Estate Investment Trusts (“A-REITs”) such as Stockland, the residential property sector is looking positive for well into 2014-2015.

Most in the industry believe that this confidence is being fuelled by a number of factors, including:

Despite a recorded drop off in first home buyers in the market in the past few months, housing prices are still relatively affordable, with the results from both the REIA-Adelaide Bank and the HIA-CommBank indexes indicating that affordability levels are as good as they have been in around 10 years.

Inflation is low, and we are currently experiencing record low interest rates, as well as increased competition on mortgage loans between the banks and other lenders which is beneficial for investors.

Our economy and that of other countries is experiencing a positive economic recovery which is set to continue even despite a higher unemployment rate predicted this year.

We are also experiencing population growth, with most new arrivals wishing to be based within the major capital cities. This is combined with low levels of new property coming onto the market, especially in cities such as Sydney, and is good news for anyone wishing to invest in property to reap rental returns.

Despite a positive outlook, investors still need to be on the ball about where to put their money. Finding new and off the plan property that will provide a stable long-term investment – one that is located in an inner city suburb or in the surrounding areas – will be made easier with research and due diligence, as well as timely advice, help and ongoing support from property experts.

 

 

[i]http://business.nab.com.au/quarterly-australian-residential-property-survey-q4-2013-5762/