It’s common knowledge that the value of property grows overtime.
It doesn’t grow consistently or uniformly, but overall, property prices generally increase.
But how are investors to act in the current market, if they wish to grow their wealth in the safest possible way?
Today I’d like to look back at property prices to help you look forward.
It’s common knowledge that the value of well located property increases over time.
It’s also fair to say that the sooner you start investing in property, the better you’ll end up financially.
“That’s not fair,” I can hear new investors say. “Property prices are so high, I’ll never get my foot on the ladder — let alone be able to build a property portfolio that allows me to retire.”
I can understand your frustration.
And in fact, to compound it somewhat, I’ll share with you this tidbit of information one of my mentors shared with me many years ago…
The best time to get into real estate was 20 years ago.
I would add — the second best time is today.
But that’s not particularly useful information, is it?
Who wouldn’t like to buy their parent’s house for the price they paid for it years ago?
Until we master the scientific breakthrough of time travel, it’s not possible to go back in time and buy property while it’s still “cheap”.
And let’s not sugar coat it — if that were possible, we could snag some absolute bargains.
If we take a look back at what real estate prices were like a few decades ago, the facts and figures are eye-wateringly appealing.
In 1973, the median house price in Sydney was just $27,400.
Renting would cost you an average $26 per week, and according to the Australian Bureau of Statistics (ABS), the average weekly wage was $111.80.
Buying a house at this time in Melbourne would set you back $19,800, and in Brisbane, $17,500.
If you were to purchase in Canberra it would cost you around $26,850, whereas a house in Hobart would’ve been a steal at the low, low median of $15,200.
As for Perth and Adelaide, the housing market was affordable with a median of $26,850 and $16,250, respectively.
Compare that with the pricing of houses these days, and it’s a vastly different story.
- Sydney — $875,816
- Melbourne — $720,433
- Canberra — $594,486
- Brisbane — $492,911
- Perth — $464,238
- Adelaide — $435,042
- Hobart — $430,138
- Darwin — $433,609
The first thing we can deduce?
In the space of 45 years, all capital cities have recorded massive price growth.
Some have performed better than others, clearly.
But the fact remains that anyone who bought property in 1973 and still owns it now, has profited very handsomely from their investment.
The second thing we can deduce?
Time in the market, not timing the market, is a surefire strategy for success when you’re building wealth for your future.
There are a number of factors that influence property prices, but in particular our population growth and the increasing wealth of our nations have driven up values.
When all is said and done, however, the irrefutable truth of the matter is this: if you follow a proven investment strategy, do the right research, choose an investment grade property, in the long-term outlook will be favourable.
This is true no matter how high property prices are in the current market, and regardless of how volatile value movement is over the short-term.
So, rather than fretting about “where property prices are heading’”over the next year or two, focus on the bigger picture.
If you buy well, buy smart, and have a strategy in place, your prospects for wealth creation are strong.
After all, if Sydney property prices increased from around $27,000 in 1973 to $878,000 in 2018 — can you imagine where they will be a few decades from now?!
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