Is property still a worthwhile investment?

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With the triple challenge of a pandemic, recession and social and political unrest around the world, people are wondering whether property is the way to go.

The economic slowdown caused by our government to control the coronavirus pandemic plus rising unemployment and falling consumer confidence is creating significant headwinds for our property markets.

Despite this they have remained remarkably resilient.Property Invest Money

And it’s true… property values are likely to fall a bit further in certain segments of our property markets (I’m looking at you high rise apartment towers and other secondary properties) before they bottom out.

Of course I can understand why some property buyers have “gone on strike” while waiting for the picture to become clearer.

Many must be finding it hard to foresee strong house price growth at a time when the media is full of negative headlines about property.

But it’s important to keep a big picture view and remember what’s happened over the long term?

So let’s look at how our property markets have performed over the last 40 years…

Have property values really doubled every 10 years as many pundits would suggest?

I remember last year when there were similar concerns and at that time a MoneysaverHQ analysis of 40 years of Real Estate Institute of Australia data has found that a majority of state capitals have indeed doubled every decade.

Around the same time leading finance journalist Anthony Keane @keanemoney  reported that since the REIA data series began in 1980:

  • Sydney median house prices have doubled four times, up from $64,800 to $1.06 million — a 1536 per cent gain.
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About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit Metropole.com.au


'Is property still a worthwhile investment?' have 2 comments

    Avatar for Michael Yardney

    August 19, 2020 Geoff

    Hi Michael,
    I’d be interested to know where you get your figures. I purchased two ACT properties in 2003. 1 x 4b 2b 2c and 1x 4b 1b 2c fixer upper. The former in particular was good quality high set garage under, great views and street appeal.
    Unfortunately a cancer diagnosis meant that I had to sell them to cover treatment and time off work for treatment. I sold them in 2018 & 2019 respectively. In that time, 15 and 16 years, neither of them went anywhere near doubling in price.

    Reply

      August 19, 2020 Michael Yardney

      Geoff – sorry to hear of your illness. I’m quoting city median prices. This means that some properties will outperform the averages and others will underperform. A lot has to do with their location

      Reply


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