Property Investment in 2020: What Does the Future Hold?
Funding Options managing director Dom Cassisi explains what current Australian housing market trends mean for buyers and property investors in particular.
Adelaide on the Rise
In comparison with other cities, the Adelaide housing market is on the rise, according to a report from QBE Insurance.
A weakening economy and slowed population growth are letting Adelaide’s housing market catch up.
The average market price for units are expected to go up by 3.2% in Adelaide. Compare that with a predicted fall of 3.8% for Sydney.
In fact, most other Australian capital cities are expected to experience falls.
What’s going on and what does this mean for the future of property investment over the next few years?
Why Investors Are Leaving the Big Cities
Experts anticipate a weak housing market for most capital cities like Sydney as we see property prices continue to drop.
There are a couple main reasons behind the trend:
– Tightened lending restrictions are forcing investors out of the market
– Oversupply of new unit developments
Without seasoned investors on the scene, the market is much more inviting to new first-time buyers who can afford only smaller properties. Owner-occupiers can finally break into the market thanks to lowered prices.
Previously, a positive feedback cycle kept driving prices up. Higher price tags meant potential buyers had to take out larger mortgages to qualify to bid. Higher bids, in turn, raised prices further.
In a way, this natural cycle of capping prices is a good thing for debt-ridden Australians.
Additionally, a supply surge of housing will drive down the prices and make property more widely available and affordable.
So that’s all the good news we look forward to by 2020.
But what if you’re looking to expand your investment property portfolio?
What This Means For Your Property Goals
Being locked out of the property market can be frustrating for investors.
But the smart thing to do is to go with the flow and seek out properties in markets that are investing-friendly.
Increased unit production isn’t expected to drive down costs everywhere. This trend is buffered by a population boom in many regions. What’s more, an increasing number of people are gravitating towards the apartment lifestyle, both for buying and renting.
Dealing in the unit market is a way to keep up with current demand, but you have to be doing it in the right area.
That’s why more investors are looking to buy up interstate properties, away from the capitals that were once magnets for investment property.
Adelaide is one of the few cities where apartment prices are expected to go up thanks to a steady demand. So if you have your eye on unit investment properties, Adelaide could be the next place you should look.
Get in Touch
Interested in buying a property or considering property investment? Contact us now for a no obligations discussion about the South Australian market, what it means for you and the best finance options available.
– Dom Cassisi, Managing Director