Six Powerful Reasons Why Right Now is the Best Time to Invest in Melbourne
Don’t listen to the media opinion. The news is not there to educate you about how to become a successful investor. In fact it’s main purpose is to sell newspapers. If you open to the main page, it always has the worst news. And we all know that bad news sells. The person who writes an article is a journalist. What is their role? A journalist is in fact not a property investor expert. Their role is to write bad news, so don’t listen to the news !
Always base your decision on facts…
Here are six powerful reasons why now is the best time to invest:
1. Huge Population Growth
Population in Melbourne increases by about 1,400 every week. Where do people rent? Where do people buy? This mean the demand is always there.
So how many more dwellings do we need every week?
Average Melbourne household size is about 2.7 people per property.
1,400/2.7 = 518 new dwellings needed every week to cater for the demand.
When there is a strong population growth, what happens to the value of property? It goes up in value.
2. Shortage of Properties
Currently Melbourne has shortage by 20,000 dwellings. What this will do with the rental? It pushes rent up more and more. What does this mean to the property value? Property price increases.
3. Rising Rent
Over the last few years rent has rising significantly due to shortage of supply and rising demand. This mean as an investor you’ll get more rental yields, therefore you win ! As Melbourne population continues to increase and not enough properties are being built, rental continues to rise.
4. Low Interest Rates and Strong Economy Growth
Today interest rates is about 7.25%, it is still one of the lowest interest rate in decades.
Why interest rate increases? It is to control inflations. Normally when interest rate increases meaning that we have a strong economy. This is good for real estate. However many people are fearful when interest rate rises. As an investor, you do not be fearful. Here’s why? When the interest rate increases, the rent will also increases, so you pass the cost on to the tenant. You will also get more on the tax benefits, so really as an investor, you win !
5. Know Where to Buy
Not every locations is a good location to buy. You have to look at the key growth drivers in that location. Who will rent in the location? The vacancy rate in the location. The population growth in the location. When there are shortage of properties and rising populations, it pushes prices up in the location. Other factors to consider are: is it close to public transports, shops, employment and facilities?
6. Long Term
According to the ABS statistics, property prices in Australia doubling up every 7-10 years over the last 80 years. We had World War 1 and 2, interest rates went up and down, the economy went up and down. But the property prices continue to doubling up in every 7 to 10 years. Here are the key reasons: Melbourne property is still affordable, population increases, scarcity of land, material cost increases and labour cost increases. Therefore property prices have to increase. Invest for the long term, don’t speculate. Don’t wait to invest, but invest then wait. When you invest, time works for you. But when you don’t invest, time work against you. You don’t need to be rich to invest, but you have to invest to be rich. Why you need to invest? Simply is to build wealth for you and your family. Property is the safest vehicle to invest, compare to shares or other businesses. Finally when you invest for the long term, you will never go wrong, as property price increases in the long term.
Don’t be fearful, as an investor you can always win in any property market, if you have successful property investors to help you.
A helping hand to property investors…
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