Is Real Estate still a ‘safe’ investment in our current economic climate?
I’ve just read something interesting I thought I’d share with you.
It’s the latest report on Residential Property Prospects - 2008 to 2011 from the leading economic forecaster BIS Shrapnel.
House prices are tipped to rise in this new financial year due partly to the fastest population growth Australia has experienced in decades. This increase in growth has even outweighed the effects of recent interest rate rises.
The report said our residential property markets would experience marginal growth in prices in 2008/09 as the population was expected to increase by 1.5 per cent, its highest level since the late 1980s.
Apparently we are experiencing “record net overseas migration flows which is underpinning what is already strong underlying demand for housing”
Although BIS Shrapnel are predicting the Reserve Bank will raise interest rates again in the September quarter, they have said that higher rates are more likely to stop growth in property prices rather than force a downturn. Surely this will put the recent media claims of a property market crash to bed?
BIS Shrapnel have also predicted that banks may offer more attractive lending rates in 2009 as the recent credit conditions recover.
Their study author Angie Zigomanis has said that rising rents and improving credit conditions would cause our housing prices to increase in most capital cities.
“This easing will enable house price growth to pick up in many centres during 2009/10 and 2010/11″ she went on to say.
Queensland is expected to grow strongly in the three years to June 2011. Median prices in Brisbane, Gold Coast and Sunshine Coast residential properties are tipped to enjoy a nation-leading 22 % growth.
Predictions for Australia’s highest median house price of $650,000 by mid 2011 is Sydney, with real estate values in the capital expected to climb by 18 % during the next three years.
And the slowest capital city median house price growth is tipped to be Perth, with only a predicted 9% increase in the three years to mid-2011. Perth’s forecast median house price of $500,000 by June 2011 is tipped to be overtaken by Darwin with a median value of $515,000. This would have the Northern Territory capital city experience a 21 % growth in housing prices during the next three years.
Median house prices in Melbourne and Adelaide are predicted to grow by 16 % by June 2011, followed closely by Canberra with a tipped 15 % increase.
And what of Hobart in the southern part of the country? Although house prices are tipped to grow by 14 % by 2011, they would still present the nations lowest capital city median house price with $365,000.
So my answer would of course be “yes, real estate is still a safe investment in the current economic climate”.
And those of you who have attended my seminars and watched my DVD program would know that I believe there is no right or wrong time to buy a property. Trying to time the perfect turn in the property cycle in which to make a purchase is virtually impossible.
When is the ideal time to buy an investment property?
As soon as you are able to! And given that right now we are seeing some of the best buying opportunities we have seen in yonks, I certainly hope you have your finances in place ready to pull the trigger!