Now Is The Right Time To Invest In Property

by | Sep 8, 2020

Should you invest in property this 2020 while there is a pandemic?

As people the world over panic and the economy grinds to a terrible halt with Australian property experts painting a grim future for the property market, you most probably have set aside your plans to invest in property.

If you’re watching the property market closely though, you also probably heard of other experts saying the exact opposite thing. So, should you or should you not suspend your plans to invest in property indefinitely?

 

The Australian Property Market in 2020

Don’t let conflicting reports you hear about the property market muddy the water. Pandemic or not, what you hear in the media is the average condition of all the properties in the country.

Keep in mind that there are about 8,800 suburbs in Australia. This is why there is no “one property market,” so sweeping statements you hear are typically just that.

If you want to accurately measure the impacts of a crisis on the property market, checking how it performed in the past is worth the exercise.

Check the historical responses of property to economic crises and check the particular area you want to invest property in. As it is, stock market crashes and economic recessions aren’t always precursors to a decline in housing values. See the graph below.

Invest in property

Positive Government Incentives
Further to the unlikelihood of a downturn, and in response to the current global crisis, the government and banks have staved off massive price reductions. Incentives, such as the JobKeeper package, have acted in a strong and powerful way to ensure we don’t experience a significant drop in prices. In terms of leasing performance, these incentives have also gone a long way towards alleviating investor concerns.

With comprehensive research and knowledge, wise investors understand that 2020 could be the right time to invest in property.

Supply and Demand
What does alter property prices is supply and demand. Currently, there’s a lack of supply due to owners pulling properties off the market, with mixed results. For example, recent auctions in Sydney and Melbourne have produced prices significantly above reserve. Yet, in other suburbs, oversupply and high vacancy rates in units have led to a drop in prices.

One of the biggest things on the horizon is overseas immigration, which may reduce by about 85%, with regard to demand coming in. This will result in an oversupply of certain residential apartments in the immediate future. However, the pipeline is already slowing down towards market equilibrium.

CORE LOGIC | AUGUST PROPERTY VALUES

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Chan & Naylor, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information

Chan & Naylor
Chan & Naylor

Chan & Naylor is Australia’s leading property, business, tax-accounting & wealth advisory group with offices nationwide.

The Chan & Naylor Group has national offices in South West Sydney, Sydney CBD, Pymble and Parramatta in New South Wales, Wheelers Hill, Melbourne and Moonee Ponds in Victoria, Brisbane in Queensland, and East Perth in Western Australia that can assist you with your accounting needs. Contact us here today.

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