For the first time in years, the planets seem to be aligning for homebuyers and property investors. Interest rates are falling, property prices largely appear to be stabilising and constraints on bank mortgage lending have been relaxed.
In July, home values recorded zero growth nationally, with signs the housing conditions are stabilising. Most tellingly, prices rose slightly for the second month in a row in both Sydney (up 0.2 per cent) and Melbourne (up 0.2 per cent). However, the stabilisation in housing values is becoming more broadly based with Brisbane, Hobart and Darwin also recording rises in values.
Property investing beyond houses…
Australians’ love affair with bricks and mortar is legendary, but there is more than one way to profit from property. If you’re thinking of buying as an investment, rather than as a place to call home, there may be opportunities to invest directly in commercial property or via a managed fund.
Listed property trusts and managed funds offer a way to invest in a diversified portfolio of properties in Australia and overseas.
Unlike the housing market, recent returns from listed property have been strong. Over five years the average annual total return was 13.8 per cent.
That’s no guarantee of future returns, but it demonstrates the benefits of diversification.
Photo by Dave_S.