| Many
people question whether property investment in Australia remains
a profitable possibility seeing as the real estate sector
in Australia has been one of the most positively affected
markets during the latest worldwide property boom.
As house prices across the country are now
at record highs in relation to income levels in Australia
this has made property ownership a less achievable goal in
real terms for many Australians, this has pushed up demand
for rental accommodation so far that a rental crisis is now
looming in many major Australian cities - thus creating a
ripe market for the property investor seeking immediate income
and long term growth.
A recent report in The Economist magazine
highlighted the findings of many global forecasters who speculate
that because the Australian property market in the major cities
of Sydney, Melbourne, Brisbane, Perth and Adelaide has expanded
so quickly and so far, real estate is now over priced and
due a correction because in real terms property has become
unaffordable to the local consumer.
Supporting these findings are the Housing
Industry Association of Australia’s own conclusions
that the residential real estate market in Australia is due
an orderly short term slowdown until 2007. In the interim
the HIA’s Chief Economist has introduced a new issue
into the equation and that relates to the fact that many major
Australian cities beginning with Sydney are facing a rental
accommodation crisis.
If demand for rental accommodation in Sydney
continues at its current high level and approval for new property
developments in the city remain at their current low level,
the city will face a critical demand/supply situation by 2007
with other cities hot on Sydney’s heals according to
the Housing Industry Association.
From these findings there are two conclusions
that can be drawn by a property investor. Firstly rental prices
will increase in all the major Australian cities making any
investment made today into a buy to let property potentially
immediately profitable; and secondly, property purchased now
will be in demand from a resale point of view in the medium
to long term and because the Australian market has proved
so popular for so long there is no reason to suspect that
this situation will change.
So, in answer to the initial question posed
about whether property investment in Australia remains a profitable
possibility or not, the answer is most definitely yes! In
a bear market a property investor can still profit if he purchases
carefully.
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