Melbourne Property Investment

As inner city Melbourne investment property development opportunities lessen, Melbourne developers are turning their sights toward the city's middle and outer ring suburbs. Contact Australian Property Investor Planning for more details of current and future property investment opportunities in the growth areas of Melbourne property market.

2010 Overview:

With Melbourne's property market following the national trend of a stabilisation phase that's set to continue into the forseeable future, its paramount for investors to consider potential long-term real estate prospects based on their overall historic performance.

Stick to property investing fundamentals and ignore opinions as to where the market is going, whether good or bad. Buying strong investment properties is more about asset selection rather than timing. Timing is impossible to consistently get right. Don't wait for the right time to buy. Wait for the right property to buy.

The housing market has performed very well in recent years and Melbourne continues to experience strong population growth from overseas. This, along with the current undersupply of residential dwellings, ensures that pressure remains on residential property prices.

Like any real estate investment, locating and purchasing the right property in the right suburb requires careful consideration and research. Buyers should look for suburbs that have strong positive attributes. For example overall appeal, good public transport, good schools, shops, close to arterials and above all, invest in areas that are conistently showing a growth in population.

Affordability. Melbourne residential and investment property sector is performing well and is predicted to continue doing so. Here are some reasons why:

Melbourne apartment prices have historically been approximately 20-25% more affordable than Sydney, however the current price difference inner city apartments is over 45% meaning there is plenty of upside potential in Melbourne.

Melbourne home prices are rising from a lower base providing a higher proportionate gain.

Pent up demand. Many leading economic forecasters believe there is an undersupply of new housing in Victoria.

High consumer confidence motivates people to make more long term decisions such as purchasing a new home.

Improved immigration numbers. Melbourne's population is now increasing at a faster rate than many other capital cities leading to an increase in the demand for housing. Population growth is around 4%.

Returns on Investment Properties

Real estate investors in Melbourne should be aware that the prime reason for investing in property is capital growth, and capital growth is driven by the scarcity of an asset. When selecting a property for capital growth there should always be a consistently greater level of demand than supply.

CONCLUSION

Remember, that when you select a unit as an investment, succumbing to the lure of tax savings is a fundamental mistake for investors. You do not attain financial independence through saving tax - you gain financial independence through the ongoing capital growth of your assets. So, get the location right and the returns as well as the capital growth should follow.

The Annual Return Index measures the capital growth of an investment property together with net rental income, to give an accurate comparison between Australia's cities. Melbournes residential property will make another steady start in 2010 and continue to do so in the long term. Investors should be very selective in terms of suburbs they consider for property investment. As always, look at the level of infrastructure and population growth of any new areas in Melbourne. Comparisons between the Capital cities are best considered over 7 to 10 year periods with Melbourne, Sydney and Brisbane continuing to be good options for property investment in the future.