The new great Australian dream

Building a property portfolio has replaced the great Australian dream of owning the classic family home on a quarter-acre block. At least to the 1.4 million Australians who currently own at least one investment property.

Investing in property is about creating financial independence; to be able to choose whether to work or not, and to maintain a lifestyle.

Michael Yardney is a property commentator, director of Metropole Investment Strategies and author of How to Grow a Multi-Million Dollar Property Portfolio - in your spare time. Here he shares his insights on how to get set on the property investing path towards financial independence.

Take a long term view

"Investing in property is a long term investment prospect, and you are ultimately buying for capital growth. Statistics tell us that well located properties in all capital cities go up 10 percent per annum, which means they double in value every seven or so years on average."

"It's important to understand how to invest for capital growth. Speak to a good accountant and get the structure right first. Buying for investment purposes is quite different to investing in residential property as there are different taxes involved."

Tapping into your equity

"You don't have to sell properties to get money out of them. You can borrow money against the equity in a property to be able to purchase an additional one. You can also manufacture your own capital growth by renovating or redeveloping to add value."

Where should you buy right now?

"The time is right now to purchase property on the east coast of Australia, because we are now seeing the start of the next property cycle," Michael says. "Full cycles run for around seven to ten years - through a boom, slump and a four to five year upturn - and they only happen two to three times in your adult lifetime. Melbourne and Brisbane have now moved into this upturn, Sydney is still in a slump, Perth and Darwin are at their peaks, and Adelaide and Canberra are chugging along."

"Avoid regional areas or small towns where there isn't strong demand, and consider capital cities - Melbourne and Brisbane are the best right now. The inner city and more affluent suburbs are preferable because they are always the first to get going at the beginning of the next cycle."

What to expect in the next decade

"I believe the next cycle will be driven by population growth. Stronger restrictions on immigration will see more skilled migrants coming to Australia in the next 10 years than those who came in the last 10 years. They will be settling here with money and will be ready to buy property."

"Demographics have also changed and we're now living differently. 30 percent of Australians are now living on their own. So in the future we will need more dwellings to house the same number of people, and that will be in apartments and townhouses."

More News
Back to this Issue

Subscribe
If a friend has forwarded you this newsletter. Click here to subscribe.