I’m about to make a big prediction here… 2021 is going to be the best of the last 10 years when it comes to investing in property. The markets are already gaining pace, despite four out of our 8 capitals are still recording dwindling values that are lower than previous peaks.
At the time of writing this, Melbourne homes are still below what they were back in March 2020. Sydney needs to go up another 4% to get back to where it was in 2017. Perth and Darwin are down too – 20% and 25% respectively.
But it’s not all doom and gloom…
The experts are buzzing with excitement about Brisbane at the moment. Why are they so excited? Compared to Sydney and Melbourne, Brisbane’s market has previously struggled to gain momentum.
It started getting going in 2020, but then when COVID hit, it tripped that momentum up. But good things are on the horizon, because now Brisbane is definitely back in the game bigger and better than ever.
We’re seeing some massive prospects already in some of the pockets of the city, and the last few months alone have really picked up the pace. In fact, a lot of our Black Belt members are investing in Brisbane right now.
What does that mean for you as an investor?
Keep reading to find out!
Rentals predicted to hit the roof
The lack of immigration thanks to COVID has hit rentals really hard. People who have invested in apartments, are really feeling the pinch. (If I haven’t told you this already – don’t invest in apartments unless you really know what you’re doing!)
But despite this, Australia is facing a housing shortage. We simply do not have enough housing supply. We’ve got 25.6 million people, and most of the country had an undersupply of housing before COVID.
The only place there is a surplus is in Melbourne and Sydney CBDs. But with immigration and overseas students pretty much dwindled to a halt right now, many of them are sitting empty. Their rents are declining.
And the truth is, nobody really wants to live in an apartment. People only do it because they have to so they can be close to school, work, or because they can’t afford to rent a house.
But do you know where people will always want to live? Houses. Townhouses. Places where they have enough space for their families and a bit of a yard. So the supply and demand ratio for Australian housing is being pushed. Economists predict that Australia’s housing market will rise up to 15% this year, that’s going to push rents up even more.
As an investor, that’s a clear sign to buy properties right now before the next boom begins, and reap the rewards of high rents in future years.
Purchasing power is declining
Inflation occurs when prices rise, decreasing the purchasing power of your dollars. When a country’s government begins printing money to pay for its spending, it increases the money supply, and prices rise. That’s been happening recently in America, in Europe, and in Australia too.
So following the laws of supply and demand, when there’s more money being supplied, it lowers the price of money. Money is like property, if you have an oversupply of properties, it reduces the value of those properties.
What’s happening right now is that there’s actually an oversupply of money. If you’ve got money in the bank, then your money is actually shrinking super fast.
Now, I’m not saying that your bank balance is going down and money is missing out of your account. That’s not what this means. What’s happening is that just say you’ve got a million dollars in the bank today, in 12 months time that million dollars is not going to be able to purchase the same amount that it can today.
And that’s a big problem. Let me show you why.
Just say you have a house worth $500k now, and over the next 12 months it goes up 7% in value. That’s a $35,000 gain.
But if you’ve got $500k in the bank today, and in 12 month’s time inflation decreases the value of a dollar by 7%, you’ve LOST that $35,000.
I bet those numbers shock you, and they should. If you’re keeping money in your bank account, it’s not doing anything except for losing value.
You’re getting back 1% or 2% in interest, which is absolutely nothing. Whereas if you invest that money into property – and by this I mean the right property in the right area at the right time – your ROI will be much, much higher.
We’ve currently got Black Belt members getting from 35% to 70% return on their portfolios. Yes, even during the pandemic. The great thing is these properties are only costing them around $30 a week, and they’re able to leverage these investments down the track for even greater growth. You can’t do that if you keep your money in your bank account!
How to get started
Since you’re reading this blog, I’m guessing you’re thinking about property investing as your wealth creation vehicle. Let me tell you – it’s worked great for me, and it also has worked great for the hundreds of people I’ve mentored to build cash-flow positive property portfolios.
To find out more about how Positive Property Solutions can help you invest smart for your future, get in touch with one of our friendly property coaches using this booking link.
Or join our 14 day LIVE challenge where I personally guide you to create a blueprint for getting your first, second, third and fourth (and beyond) property. Click here to find out more about the 14 Day Live Positive Property Challenge.