It is the dream of many Australians to own a house and have real estate investments. In fact, it has become something of an obsession to be a homeowner. According to real estate agency Hyde Property Group, many Australians spend quality time searching for potential houses for sale.
While others spend their time trying to sell their properties or looking for potential lucrative investments. Well, you can’t blame them because the Australian real estate market has risen in value.
“As of September 2022, it is worth over nine trillion dollars,” a Hyde Property Group worker reported. Hyde Property Group is a real estate firm that is established in Melbourne, Australia. They offer services like the buying and selling of luxury properties (mostly residential) and so on.
Value of the Australian real estate market
The real estate market previously declined from 10.14 trillion dollars in March 2022. However, it rose again to 9.98 trillion dollars in June 2022 and steadily rose till the year ended. This shows that property investment is a valuable and lucrative venture in Australia. Even real estate agencies like Hyde Group, also known as Hyde Property, have more customers than stockbrokers in Australia.
Moreover, Australians prefer to purchase properties rather than buy shares, something noticed by real estate agents in St Mary’s, NSW. This is justifiable because the Australian share market value is four times less than the real estate market value. If you compare both, the share market is worth 2.47 trillion dollars, while the property market is worth 9.98 trillion dollars. So it stands to reason that Australians will prefer real estate to shares.
Why Australians will continue to prioritize properties over stocks
Australians view properties as a stable life investment that they can hold on to even in old age. Unlike the stock market, which is volatile and can fall at any time, something nobody can predict.
Besides, many Australians are cautious about buying or investing in the stock market. They don’t want to use their savings and end up with nothing at the end of the day. This kind of thinking was strengthened when stocks drastically fell two decades back. Hence, they choose to buy properties that will be useful to them instead.
Why you should invest in real estate in Australia
The real estate market has gained a foothold in Australia for many years now. The government and citizens have long recognized the importance of real estate investment to the economy. Furthermore, the Australian housing sector and financial institutions also help to avert possible crises in the future. Several Australians who don’t have retirement funds have heavily invested in real estate to make up for it.
The new generation is not left behind, as they see property investment as a means to earn a second income. They have used the opportunity to buy properties from property agencies like Hyde Property Group, Melbourne. Nevertheless, the number of real estate investors and property owners continues to rise in Australia.
Types of properties you might consider buying in Australia
Apartments or House?
Your business intentions and investment goals will determine whether you should invest in an apartment or a house. So calculate your moves very well to know which one will benefit you more. Look at the return on investment on either property and the rental yield. This will help you to decide if you should pick apartments or houses. Likewise, the purchase and maintenance costs of both properties are very important. Compare the cost of buying and maintaining an apartment and a house, and go for the one you can afford.
An Example
For instance, a 300,000 dollars 2-bedroom apartment has a probable weekly rental yield of $1,000. While in the same area, there is a 300,000 2-bedroom house that has a weekly rental yield of $700. If your purpose for buying properties is for the rental yield, then go for the apartment that has a higher yield.
But if you want to buy a property you wish to reconstruct or renovate, that means you want to make a profit. You are not that concerned about rental yield, but the profit the house will bring after renovating. This means you are more focused on the capital gain. Then buy the house instead of the apartment.
Rentals or owner-occupied real estate?
Buying rentals or owner-occupied properties still boils down to two intentions, rental gain or capital gain. If you want to earn an income through rental gains, it is better to choose a rental property. When you buy a rental, you can rent it out to tenants who will pay you rent. Whereas, if you are after capital gains and might move into the property, purchase an owner-occupied property.
Additionally, owner-occupied properties are more profitable than rentals in the long run. They are less likely to run at a loss, either. Similarly, the resale value for owner-occupied houses is higher than for rentals. However, whichever one you choose, you’ll make profits.
Conclusion
Property agency Hyde Property Group advises Australians to look before they leap when it comes to property investment. That is, they shouldn’t rush to buy the land they see advertised online, in magazines, or on the street. They should make proper findings before investing their money. While real estate is a juicy and beneficial investment, it can also go wrong. Therefore, as an investor, there are some things you shouldn’t take lightly when investing. Things like the location of the property, property value, and property are very important.
