Residential real estate in Australia still appeals to a large group of investors due to a potential of reaping significant returns.
While seemingly attractive, the associated risks in investing in properties are just as prominent, especially if you do not have a clear strategy. For those wanting to preserve their capital, your investment choices will largely depend on your preferred type of real estate.
Apartments, for example, remain popular amongst buyers because of expectations that these could offer good yields in the future — provided that the timing is right.
For those that are on the sell-side of the property market, there is good and bad news about the National Australia Bank’s (NAB) survey prospects for the real estate industry. The bad news involves a price growth for homes that will not increase in double-digit figures in 2017.
The good news? Average home prices in capital cities are still projected to increase 3.4 per cent this year. It is likely better to postpone your plans of selling your assets, given the low price increase. Since your property may not fetch a higher value, there is little to no chance of maximising profit from a sale.
If you have been looking for new house and land packages in Brisbane or freehold properties in Melbourne, the NAB poll’s findings indicated that the housing market would cool down in 2017, thus making it quite a good time to buy properties.
New or Existing?
Similar to the perennial question of buying versus renting, you should determine first whether or not buying a new house aligns with your investment strategy. Buying newly constructed properties are less expensive when they are located far from urban areas.
However, homes that are in city centres offer the most potential to deliver best returns for investors seeking capital appreciation.
There’s no guaranteed way to secure a stable return on investment in residential properties, but familiarising yourself with the associated risks and avoiding them can increase your chances of gaining huge yields.