WHAT MAKES PROPERTY INVESTMENT ATTRACTIVE IN THE LONG TERM?

27 May 2024, 11:43 am

WHAT MAKES PROPERTY INVESTMENT ATTRACTIVE IN THE LONG TERM?

Despite the current market of high property prices, rising interest rates and inflation, property investment remains an attractive long term investment option.

It is important to know that potential property investors should not be sitting on their hands waiting for interest rates or prices to drop. Simply put, history doesn’t lie, and the statistics suggest you’ll be waiting a while for something that will not impact the benefits of investing now. In fact, the current mortgage interest rates are still below the Australian 35 year average.

In the 1970’s interest rates climbed to then record highs. People waited for them to come down to invest. It took another two decades, during which time the value of properties rose by nearly 400%.

Investing in property is a long-term game, and it is time in the market that influences return. Not the entry price, nor the interest rate you are paying.

If your situation means you can afford to get into the market, our recommendation is to definitely consider it.

This is a general recommendation, and of course will be influenced by your personal financial situation and borrowing ability so you should speak to an expert to asses your specific circumstances and identify if it is right for you.

So, what makes property investment attractive? Here are four key reasons:

1.Property generally goes up

For the past eight decades, property values in Australia have generally doubled every 7-10 years.

Yes, this varies from location to location, but they do rise. Despite occasional fluctuations, property values have generally trended upwards over time, making it an attractive option for long-term investment.

This stability appeals to Australians seeking to grow their wealth steadily.

2.Supply & Demand

Population growth, urbanisation, immigration and limited land availability to develop mean that Australia witnesses a persistent demand for housing.

Recent failures in the construction industry have reduced our ability to build houses and dwellings and this will only place an upward pressure on the demand side as supply is reduced.

This sense of control and visibility can be reassuring for many Australians, especially those who prefer having a physical asset backing their investment.

Additionally, property investment allows for more direct involvement in decision-making, such as renovations or property management, providing a sense of empowerment and control over the investment’s performance.

3.Control and Tangibility

Unlike stocks and bonds, real estate has a certain sense of tangibility that you can see and touch.

4.Beneficial Tax Treatment

In Australia, investors can negatively gear their investments to reduce the tax they pay on their income.

Finwell Group are a goals-based advisor who focus solely on our client’s unique circumstances and find the precise solution that meets their needs.

You can organise a complimentary, no-obligation initial appointment with one of Finwell Group’s Senior Consultants to review your current position and understand the various options available to you to help you meet your long-term goals.

Follow the below link to secure a time that is convenient to you for a complimentary 45-minute initial review with a Finwell Group Senior Consultant:

BOOK REVIEW MEET

You can also email us at better@finwellgroup.com.au or call (03) 9017 3235.

If you’d like more general information, we also invite you attend regular online education webinars where we discuss topics on finances, superannuation, tax and retirement. These are complimentary to attend and you are always welcome.