2021 Property Investment Strategies

As 2020 began, none of us could have imagined what the ensuing twelve months would have in store. Bushfires, Covid-19, lockdowns and fears about the economy have all conspired to make 2020 one of the most challenging in recent history.

However, despite the difficulties, life does go on — more or less as normal — and as this dreadful year draws to a close, now is the time to start planning for achieving your financial goals in 2021.

Remember what’s important when it comes to smart property investment

Our blog written at this time last year, How to Achieve Your 2020 Property Goals, contained a number of key messages for anyone looking to invest in Australian property either for the first time or as an experienced investor:

  • Don’t let fear stop you making your first property investment
  • Don’t put it off any longer
  • Get expert advice to make the process more straightforward and less stressful

Despite everything that has happened in 2020, all of the above still apply, of course. However, there are now some other factors that you should take into account if you want to make sure 2021 is your year for finally achieving your goals when it comes to real estate investing.

What is the outlook for property investment in Australia in 2021?

Although there is no shortage of doom and gloom about, there are in fact a number of very encouraging factors out there for anyone looking to grow a property portfolio, or want to know more about how to invest in real estate. 

Base rates at historic lows

At its monthly meeting in December 2020, the Reserve Bank of Australia (RBA) announced that it was keeping the official interest rate at 0.10% (compared to 0.25% in the USA, Canada and NZ, for instance), meaning borrowing for a home loan is as cheap as it’s ever been. 

Keeping the base rate at 0.1% reflects the RBA’s view that the recession is now over, and so it is using interest rates as a means of supporting a recovery in the economy. It is also anticipated that the RBA will not increase the official cash rate for at least three years. This should give confidence to prospective borrowers that they will be able to continue to afford their loans for the foreseeable future. 

Demand set to outstrip supply

Although some observers thought that restrictions on immigration due to coronavirus would impact the rental market, making it hard for investors to find tenants for their properties, this has not proven to be the case.

This is in part because there has been an influx of expatriates returning to Australia, and they have buoyed the rental market in capital cities and major population centres.

At the same time, it is anticipated that foreign students will begin returning to Australia in significant numbers in 2021, while the flow of immigration is also expected to resume its normal levels. Both of these groups have a major impact on rental markets, ensuring demand remains high, and so this is a further incentive for anyone looking at an investment property in the near future. 

It doesn’t always make sense to keep saving for longer

Many of us have been keeping a very close rein on the family finances during the worst of the Covid-19 pandemic. However, now that the economy is opening up again, although it might seem counterintuitive, continuing to save may not necessarily be the right solution for you. 

Holding on to your savings rather than using the cash to take the plunge and finally invest may not only make it harder to buy an investment property now, but this approach will likely impact significantly on your potential for capital growth in the future as well.

This is especially the case at a time when prices are set to rise quickly. Delaying buying an investment property could mean that you not only miss out on the opportunity to significantly grow your capital, there is the added knock-on effect that, as house values grow, you will likely be prevented from finally getting into the market for even longer.

Infrastructure growth and the impact on property prices

There is undoubtedly a direct correlation between infrastructure development and property prices. For instance, areas that have transport facilities, education centres, health and retail precincts are generally going to have more appeal than a location where they haven’t yet been planned or built.

And with both the federal and state governments upping their infrastructure spending significantly as means of stimulating the economy, there are many high demand areas across the country where new services and facilities have been approved, or are already being built

As a consequence, substantial growth can be expected to occur in these places, while rental markets in these areas are likely to be extremely buoyant as people want to enjoy the new amenities being put in place.

Make 2021 count — talk to Power of Property today

Now is the time to get ahead of the market and put in place positive plans for 2021 that will enable you to take advantage of the variety of favourable factors discussed above.

Our expert property strategists analyse the most up-to-date industry information and market trends in order to identify areas of the country where there is likely to be significant and growing demand, thanks to new and planned infrastructure.

In addition, our experience and expertise means that we have access to information about new property developments across Australia that isn’t always widely available to the individual, everyday investor, and so we can offer a range of opportunities that you might otherwise miss. 

If you want to find out more about a range of options available across Australia in high growth areas with significant potential, our specialist property strategists are here to help. Call Michael Lawton on 0407 785 560 or Danielle Charlton on 0411 268 795, or book an online property strategy session at a time that suits you.

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