Property Prices & Rent Returns Will Go Up
and Interest Rates Could Come Down
Tuesday, June 15 2010
Investors Paradise is here! Are you waiting for the property bubble to burst before you make that leap of faith into the property market?
Are you waiting for the Government to sweeten the pot and come in with another stimulus package? Then, you might want to go back to sleep and enjoy that dream; because in the real world the cold hard truth is:
It just ain't going to happen!
You're currently living through a major property boom, possibly when it's over it will be the largest Australia has ever seen.
Capital Growth rates last year
(Source: Residex)
- Melbourne 22.46%
- Sydney 17%
- Brisbane 4.87%
- Adelaide 7.52%
There is no better time than right now to start building a real estate portfolio and here's why. Australia is now entering into a strong period of growth and success. Australia will go through an amazing property boom for 3 powerful reasons:
- economic growth,
- population growth;
- and a continually growing housing shortage.
How bad is the housing shortage?
It's really bad. The following shows the number of houses each state will require just to fill the immediate shortage. With ongoing record population growth you can be assured these numbers are not going to get better, in fact, they'll get worse.
Shortfall of houses by state:
- VIC - 22,700
- NSW - 57,600
- QLD - 56,100
- WA - 30,200
- SA - 100
How High Will Property Prices Go?
Gauge for yourself from the following historical table:
Median House Values (houses only) to March 2010:
|
1980 |
1990 |
2000 |
2010 |
Melbourne
|
$40,616 |
$140,979 |
$203,287 |
$580,500 |
Sydney
|
$62,246 |
$178,818 |
$336,031 |
$651,500 |
Darwin
|
NA |
NA |
$170,840 |
$513,500 |
Perth
|
NA |
$88,234 |
$158,436 |
$483,500 |
Adelaide
|
NA |
NA |
$148,395 |
$406,000 |
Brisbane
|
$37,490 |
$103,713 |
$153,674 |
$464,000 |
Interest Rates Coming Down
Don't laugh, it just may happen as the Sydney Morning Herald recently reported that consumer confidence is plummeting, with the latest slide - the third in three months - blamed in part on the budget and the proposed resources super profits tax.
Sevanth Sebastian, the Commsec economist said "We are now barely more confident than a year ago and the slide in the share market hasn't helped."
Against that trend though, investment loans have been climbing and are now 26 per cent higher than they were a year ago.
This may suggest that you should be putting your money where the smart money is - property.
David Fleming
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