It is clear that property will continue to be the best investment you can make, even when performance has its variations from time to time
An interesting article recently discussed the long-term outlook for the Australian property market. (Yahoo Finance, 28th June 2019).
“While Australian property values have dropped 5.6 per cent nationally over the last 12 months, this correction is both normal and expected when considered over the longer term.”
CoreLogic figures show national property values have grown 19.4 per cent in the last five years and are actually up nearly 200 per cent in the last 20 years.
“It is clear that property will continue to be the best investment you can make, even when performance has its variations from time to time.”
Drivers of Growth
Population - Annual growth will see 340,000 new people living in Australia.
Household Size - Have been shrinking – from 4.5 people a household 100 years ago to 2.6 today – which will significantly push up demand.
Ageing - Life expectancy is increasing, and along with it the pressure for housing numbers and housing type. By 2055, Australians are expected to live into their mid-90s.
Flexibility - The internet age and a transitioning workforce will see a much greater demand for flexible ‘work from home’ arrangements and an evolution of the home office, as well as smaller options.
Lifestyle - Technology is making work more flexible than ever, and it’ll mean people will be looking for properties in the locations offering the best lifestyles.
Value growth Predictions indicate the average national housing growth rate of 6.8 per cent over the last 25 years will continue – and that’s a conservative estimate. It means a property worth half a million today could be worth $965,000 in a decade.
The article suggests the Australian property market will continue to grow strongly in scarce, high demand areas over the next decade.
“To be successful you just need to ensure you are buying at the right time of the cycle in that location.”
“As prices bottom out in pricier suburbs and cities, now is the time to buy property if you can afford to.”