Why should you consider investing in property outside your home state?
Buying a property can be an emotional task, particularly if you’re planning on living in it and making it your home. But when it comes to investing, it is best to remove that emotional attachment and look at the facts.
Although you may know and live in a particular state or city, that does not mean it is the best investment opportunity. The Australian property landscape is dynamic and diverse, presenting many investment opportunities.
Focus on the figures
Australia is not one property market, but rather a series of sub markets. The below graph illustrates how Sydney, Melbourne and Brisbane’s property markets have performed independently over the course of 20 years. Experts suggest Brisbane is a strong growth market. This is because the average house price has risen from an 8.9 per cent difference to Sydney in 2009 to 86 per cent difference to Sydney in 2015.
Many of us could be forgiven for thinking that the whole country is experiencing similar market conditions to Sydney and Melbourne. When in actual fact, while Sydney and Melbourne markets are softening, other locations are gaining momentum.
Do your research
Any investment opportunity requires you to do your homework.
“The most important thing is to do your research and build up your knowledge of particular geographical areas that appeal,” says Tony Brasier, president of the Real Estate Instituteof Australia. ”If you invest interstate, it’s a long-term investment, not a short-term one. Taking a seven to 10 year view, especially when investing in counter-cyclical markets, is a good strategy.”
Understanding and analysing property trends, speaking with fellow investors or seeking advice from a financial planner will assist in your purchasing decision. Being thorough will assist you to find the best investment opportunity to achieve your property or financial goals.
Look at the big picture
Property markets are largely affected by economic conditions within a particular region. Understanding the local economic activity, unemployment rates, new and planned infrastructure will let you know the demand for housing or accommodation. As a landlord, these are important factors to weigh up when determining where to invest.
Ultimately, when it comes to investing, sometimes the best opportunities are outside of your comfort zone and outside of your home state. Seek advice, do your research and examine all opportunities to ensure you’re making the best investment.