‘The Perfect Investment Property’ Myth

‘The Perfect Investment Property’ Myth
March 18, 2016 Simon Pressley

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Property and property investing are topics which everyone will have an opinion on.  Ask 5 people at a BBQ on the weekend for their thoughts, and you are very likely to get 7 or 8 responses.  Given we all live in properties we tend to believe we ‘know’ property.

Investors are too often influenced by the media, well-meaning colleagues or family members, poor advisors or their own experiences.  Many confuse ‘reading’ with ‘research’.  We love spending time discussing all of these theories or myths with our valued clients.

We talk every day to clients from all around the world who have differing thoughts and beliefs on ‘the perfect investment property’.  Everything from “houses or apartments?” to the “positively vs negatively geared” debate and even the “what’s better, rental return or capital growth” question.

Another such topic Hari raised with PROPERTYOLOGY, was the “capital cities vs regional locations”. Hari, like nearly two-thirds of people in Australia (including the majority of mainstream media journalists), lives in a capital city.  When he approached PROPERTYOLOGY, Hari thought capital cities made better investment decisions than regional locations. But is this really the case?

Nearly 8 million Australians elect to live in regional locations, that equates to demand for around 3 million properties.  People are attracted to the lifestyle (no sitting in traffic for hours to get to work!!), employment opportunities, lower cost of living, more affordable housing and often connections with family. Saying that, not all regional locations are good investments.  Some of Australia’s best-performing property markets over the last decade have been risky, single industry (generally mining) towns.

With the growth in five of the eight Australia capital cities between 2004 and 2014 being below, or marginally above their respective state average, real research shows that there are certainly opportunities to be had in well-chosen regional locations.

Some of Australia’s biggest regional cities are over 100 years old and have all the essential infrastructure that one would expect from a sustainable community.  These locations are spread across the country and include the likes of Albany, Armidale, Bendigo, Bundaberg, Dubbo, Emerald, Geelong, Geraldton, Gosford, Ipswich, Newcastle, Orange, Rockhampton, Shepparton, Townsville and Wollongong (just to name a few!)

The main reason that certain regional cities have performed so strongly is that the entry price for property is much more affordable.  Furthermore, supply is much more controlled. Compared to larger and capital cities where big developers are flooding markets with huge apartment complexes or major land releases.

Taking the time to understand the benefits of PROPERTYOLOGY studying property markets Australia-wide, not restricting ourselves to capital cities, has meant Hari has been able to secure this property in a location he may not otherwise have considered.

By staying open-minded and acquiring this property in a location influenced by Health, Tourism, Education and Agriculture, we believe you have made a very astute investment decision Hari.  Congratulations again!

Propertyology are Australia’s most respected Buyer’s Agents, not just analysts.


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