Is now the time to invest in property?April 30, 2021
There has never been a better time to invest in property in Melbourne. With the events of 2020 and the impacts of the coronavirus pandemic within the state, the property market has seen prices drop significantly. This is particularly true in the case of apartments and unit blocks. Whilst there hasn’t been a significant reduction in house prices, there is currently an increased opportunity to make profit off of an apartment as an investment property or to purchase your first home. With government incentives such as the HomeBuilder scheme, many people have decided to build their new homes or substantially renovate their existing homes, therefore increasing resale value, during this time. There are a number of reasons that apartment prices have dropped, including the lack of international students entering into Australia, the decreased number of young people moving out of their family home and the lack of younger people coming from overseas to live on a working or temporary visa.
Here are some of the reasons why now is the time to invest in property within Melbourne.
Level of uncertainty leading to impacts on the property market
With so much uncertainty last year many people decided to hold off on purchasing property or making any large investments. Nobody knew how the events of COVID-19 were going to pan out and nobody knew what consequence would be on the overall state of the economy. Therefore, many people decided to hold back on spending money in order to make sure that they had a safety net in case anything went wrong, such as being laid off from work. Search uncertainty has led to a drop-in house prices, as supply outweighs current demand.
Lack of international students entering Australia and studying here
With international borders shut and tough restrictions in place regarding people entering into Australia, there has been a drastic reduction in the number of international students entering the nation to study here. As a result, there has been a decrease in demand for apartments surrounding universities, as well as units located in the city close to supermarkets, public transport and other essentials. Consequently, property prices have dropped as supply outweighs demand currently. Therefore, these types of properties are now selling for less than ever in recent years.
Young people are now moving out of the family home later than ever
Young adults and now leaving the family home later on in life. With constant lockdowns last year, many decided to postpone moving out of home or even moved back into the family home. With uncertainty around work and jobs, young Australians for the most part relied on their family members for support. Furthermore, singles living alone throughout the lockdown often moved back in with others as the isolation became too much to handle. This has caused an abundance of properties for both rent and sale, which has switched the market power into the buyer’s hands. In turn, this is resulted in price decreases in properties across the market.
Reduction in the number of temporary visa holders living in Australia
Similar to international students deciding not to study in Australia this year, many people overseas that were considering moving to Australia on a temporary working visa have reconsidered. currently Australian residents struggling to return to their country of birth which means that non-residence will find it even more difficult to be able to enter into the country flights and quarantine costs are extremely expensive therefore it is a considerable amount of money to pay to move here.
Should you buy?
If you have not been too heavily impacted upon by the events of 2020, and have the financial capabilities to be able to afford property this year, then now is absolutely the time to buy. Particularly if you are looking to invest in an apartment, prices are extremely favourable to buyers at the moment. Areas of Melbourne, such as Southbank, are in a prime location and are experiencing price reductions currently. This could be an excellent opportunity to make some money off of an investment property, whether you plan to rent it out or flip the property and sell it. You can make a great deal of money out of an investment property if you get the decor and design right, and make sure that all elements fit the surroundings of the property. Wire work suits industrial styles, whilst a property closer to the beach may suit a coastal interior deign style. Incorporating spectacular wire furniture, comfortable furnishings and unique timber feature walls will ensure that you have a desirable property in your hands.
So, if you have the financial means to do so, now is definitely the time to buy; particularly if you are looking to buy an apartment or small unit. With so many different groups out of the housing market when it comes to these types of properties, it is definitely a buyer’s market and not a seller’s market as it usually is. If you have your property finances and deposit ready to go, then it would be advisable to start looking into the housing market and see what your borrowing capabilities are. It is expected that property value will continue to rise in Melbourne and around Australia as a whole. The sooner you get into the property market, the better off financially you will be in the long run. With the value of property appreciating overtime, it may very well be one of the best financial decisions you make to buy right now. Start looking into rental property management services if you will be considering renting out your place instead of living there. Making sure that you have the right people to look after your investment is so important and can make a huge difference. Furthermore, ensure that you do your research properly before purchasing, as you need to get it right the first time. There are many tools and services that can help you to decide if now is the time for you to buy, so start researching.