When compared to many other countries, the Australian economy is far healthier and this presents a great opportunity for real estate investors. Yes, our mortgage rates may be higher than those in many other countries, but our strong economy means that we have a much lower rate of default. Yes, real estate prices can be higher, too, but the increase in value is in direct correlation to the rising income level of our population. This is all good news.
Consider looking in Melbourne when you are seeking a good real estate investment. Although some recent news reports are predicting that the housing bubble is about to burst, this is highly unlikely. Look at the facts. In the past decade or so, there has been anywhere from nearly 6% to almost 8% increase in the amount of disposable income reported by Australian citizens.
Similarly, the rate of price increases in Melbourne residential real estate is estimated at 6.8%, with only a 2.6% rise between the years 2004 and 2006 and a decrease in 2008. That overall price gain is largely due to capital gains – certainly a positive in terms of the economy.
A higher disposable income results in amplified activity in the real estate market due to strong purchasing power, driving prices upward. This creates higher property values.
Remember that old real estate adage that claims the three more important factors when buying property are location, location, location? Melbourne has that. And in fact, prices on Melbourne residential properties still tend to be lower than those found in Sydney, Perth, and Canberra even though the values are comparable.
Melbourne is a dynamic city, with growth fueled by the largest aged 20 to 39 demographic as well as a high percentage of single, up-and-coming professionals. A large number of residents are renters, providing an ideal opportunity for the property investor to find a building that has a good opportunity to remain fully occupied over the life of ownership.
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