The latest global property survey, the International Investment Atlas 2014, makes interesting reading for existing property investors and those looking to dive into the market in Australia. The report is produced by Cushman & Wakefield, and provides an overall summary of recent property investment activity in regions such as the US, Western Europe and Asia Pacific. Basing its forecasts on the previous activity for 2013, the report concludes that investment in property is likely to hit all time highs during the next year or so[i].
According to their data, the worldwide property investment market was worth a staggering US$1.18 trillion in deals during the past two years, hitting highs not seen since 2007. Not surprisingly, the Asia Pacific region was leading the pack with a healthy 25% increase in investment volume during 2013 alone. The report suggests that a number of positive factors were influencing the growth of property investment in the area, and they forecast that growth in the investment property market would most likely continue at a rate of around 8% in the future.
In the residential market in Australia there are indications that it is set for a positive period of growth during the 2014 period and beyond. These include:
- The record low interest rates
- The improved access to equity
- The strength of the Australian economy
- The increased demand from offshore property investors
- The increased developer and buyer confidence
The good news for those considering investing in property and entering the residential property market is that the Reserve bank once again kept interest rates on hold at 2.5% on the 1st April, and there is little indication that they intend to raise rates in the near future. According to analysts, rising interest rates may need to be factored in for next year, however most agree that savvy investors will already be including an increased rate hike in any future strategic plans.
The key to sustainable investment success in this type of rising market is picking the right opportunity at the right time. For example, choosing to invest in the off the plan residential market in a major capital city rather than existing dwellings can greatly increase your chances of increasing your investment over time, but also benefiting from a rise in rental demand once the development is completed. Brand new apartments are highly desirable within the rental market, leading to higher rents (and often better, long-term tenants).
Another key factor is having access to reliable and up-to-date data and research. This should include information on issues effecting residential property such as up and coming areas, rental prices and new property developments. Often the best information is only available to those “in the know” or within the industry. Finding a property investment company who can provide you with the inside “scoop” will help you not only decide what type of investment to purchase but also provide you with peace of mind that you’re making the right decision for you and your financial future.