We have reviewed “reasons to invest’ in Your Property Investment magazine and added our own opinions, from long-time investing, and buying properties for our investing clients – about half of all our buyers each year.
This year houses are performing better than units in the Melbourne market. And while investors often favour units., apartments and other strata property, here are some reasons advanced as to why the Melbourne market is doing well by world standards:
- Undersupply of houses for sale in many some suburbs. EG Ashburton is 30% down in listing from same time in 2015.
- Many suburbs have tight rental markets, e.g. <3% vacancy.
- Very low cost housing finance, which can be rate locked for, say, 5 years
- Immigration and the emergence of a fast-growing population
- The modest performance of other investments, e.g. shares, since the GFC
- The very low return (taxable) on bank cash and deposits
- Investor attraction to yields and growth, locally and internationally, particularly with Asian buyers
- Bricks-and-mortar security, and safe for investment (proved during the GFC)
- Preferential tax treatment through gearing
- Some SMSF buying is creating a new demand
- Melbourne has emerging as Australia’s fasted growing city
- Renters need investors to supply more accommodation
- Our Sydney investors buy in Melbourne for lower prices and better value.
- Buying a house avoids the possibility of apartment oversupply and therefore price reduction.