HTW Property Review Sept 2014

““Safe as”…Strong fundamentals from around the nation”

Here are some highlights:

– Property is generally considered to be one of the safest forms of investment.

– This is due to a number of fundamental reasons common to all residential property markets.

– First off the property market can be very forgiving when compared to other forms of investment such as shares.

– Over time the rising tide of the property market will cover up flaws in the initial purchase.

– Furthermore you can mitigate a lot of the risks of property investing through insurance, such as landlord and building insurance.

– Although property is susceptible to macroeconomic influences, it differs to that of the share market in that you are in direct control of your investment. – Property allows you to have control and make decisions such as renovations, which will directly affect your return on investment.

– Along with these fundamental factors there are also influences that are unique to certain areas in Melbourne that make some regions a safer investment choice than others.

– For example there has been a strong café culture in recent years, which only seems to be getting stronger.

– Properties purchased within walking distance of these amenities (some would say necessities), would not only benefit on sale day but also experience greater rental demand.

– This has been evident in areas such as Footscray and Brunswick, both of which have a strong café culture and have been gentrified in the past few years. – Investors looking for a safe option may want to stay clear of Melbourne’s central business district.

– Overseas investment has led to an increase in demand for new apartments.

– In turn developers have flooded the market and in some areas supply will be greater than demand.

– Apartments provide investors with a lower entry price point compared to houses and can deliver a better yield.

– Look for apartments that are close to Melbourne’s metro system as public transport is becoming increasingly important.

– Boutique developments of fewer than fifty apartments may fare better both in terms of capital growth and vacancy rates as there is less competition.

– Home owners have a different mindset to that of investors and therefore owner-occupiers generally have a different set of search criteria.

– A safe purchase would be located in proximity to infrastructure such as shopping, schools and parks.

– Regardless of the property type it will be a safer investment if it is also backed by underlying positive location characteristics.

– This is especially true for properties in an area that has features that cannot be replicated or manufactured elsewhere.

– Melbourne’s property market is extremely complicated and diverse.


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Thanks to Therese at Alphabroker