Now is the Time to Enter the Market

Enter Australian property market --- Now's the time

 By Michael Bentley,

 Director,

The Citylife Group

 

During the past 12 months the Australian dollar has fallen from a record high against the US dollar, the Singapore dollar, the Japanese yen and Swiss franc to a six-year low, before rebounding to a mid range.

 Australian interest rates have fallen to 30 year lows, yet remain slightly higher than those in the majority of developed nations.

Supply of new property has dropped to record lows, but the population and migration has increased to record highs.

These facts must have an effect on the Australian property market in 2009 -- 2010.  The question is what?

 Low interest rates would encourage Australians to enter the property market as long as they are comfortable with their job security.  On the other hand, foreign buyers will be encouraged to put money into Australian property on the back of rising rents, potential upside in the dollar, and foreign currency loans to purchase in Australia at very low interest rates.

There will be good buying opportunities for astute cash rich investors in 2009.

Although, as any property specialist knows, it is foolhardy to talk about the property market as if it is one homogeneous whole.

There are different markets and cycles in each city.  Every property investment in the end is unique.  For example, in the residential sector, Sydney is set for substantial growth after a long period of little movement.

 There is very strong pent-up demand, and the market is set to fire as soon as confidence returns.  However, even within the Sydney market, certain areas will outperform others.

The traditionally safe areas around the harbour, particularly in the mid-price range, are predicted to greatly outperform the outer area -- although in saying that one should remember that the Sydney market as a whole has traditionally proven to be one of steady growth over the long term.

On the other hand, the Perth residential sector has stagnated for the past few years.

Melbourne is buoyant, and has been one of Australia's strongest markets over the past five to seven years, and looks set to continue to be a good mid to long term bet.

Most analysts are advising their clients to buy immediately in Sydney,  -- all the signs are there to indicate substantial upward movement over the next few years-- supply is low, rents are rising, and interest rates are affordable.

There is a shortage of new developments coming to the market.  There remains a strong pent-up demand.  It is the best time for seven years and to enter the market.

Small commercial warehouse and office space is in Melbourne also predicted to be a good performer on the back of high rental returns indexed to the inflation rate.

Today, the key to success in the Australian property market can best be defined by sustaining your ownership.  The key is to buy a trouble free property that can sustain itself with full occupancy and rising rents over a long period of time.

By taking the long term position, it can mean almost guaranteed property price rises -- security goes hand in hand the patient and long sight pursuit of accumulating wealth.  It is an endeavour that cannot be hurried without risk.