house dreaming au

The property market in Australia does not all behave in the same way. While Sydney property may have been increasing in value rapidly since 2013, properties in Perth have hit a plateau and are showing a decrease in growth (Source).  When buying property it is important to think about your financial goals, do you want to access your capital by selling soon? Buy and hold? Flip? (I.e. renovate and sell for a profit).

In all instances the ideal situation is to buy low and sell high, but the market can be unpredictable sometimes, so unless you are an experienced flipper or have the time and money to learn, you want to think of property as a long term investment. Over long periods of time, property is a good performer. Make sure you seek financial advice before making an investment decision. While property can be great for many, it is not for everyone, especially if you need liquidity in the short term.

Pros of buying property in Australia

  1. Your investment is backed by a real and tangible asset.
  2. Owning your own home has always been the Australian dream. It is embedded in the Australian culture, this means that home ownership is more valued that renting which helps keep property demand in the uptrend over the long term.
  3. Apart from being a stable economy, Australians do not have a culture of walking away from their mortgage which hold prices more stable than in other countries.
  4. Overseas investors like Australian property which increases demand in the property market and likely driving prices up.
  5. If leveraged properly, a well-chosen property can deliver really good returns.

Cons of buying property in Australia

  1. Property can be very expensive in the main cities and territories.
  2. It is hard to find properties with positive cash flow due to the large demand in home ownership compared to rental demand.
  3. Saving for the deposit can be hard due to the large property prices.
  4. Finding a good home loan can be challenging due to the wide variety of options not all known by buyers as well restrictive policies that can potentially tarnish their credit file. Mortgage brokers can help you uncover really good mortgage deals.
  5. Each state has its own laws on buying property and cooling off periods. This means that if you are thinking of buying off state, you will need to do your research on their laws and cooling off periods.
  6. Zoning is very important. Each council has its zoning restrictions which means that if you want to renovate, you first need to know what you will be allowed to do in the area you want to purchase.

I hope this clears it up a bit. Do not hesitate to contact me if you have any questions. And as always, our best discussions happen in the comments section below.

With a grateful heart,

Juliana Ardila