Broad
economic base
For property investment to be successful, you need
constant tenancy and upward rental returns. For rentals
to increase there must be demand, which means people
need to be attracted to the area in which you invest.
The broader the economic base the greater will be the
spread of activity, and consequently the higher the
demand for housing.
It is important that the area in which you invest
has broad economic activity. If you invest in an area
that relies on one industry, such as logging or fishing,
and that industry goes through difficult times, then
the incomes, population and demand will decrease. However,
if you invest in an area that draws on a spread of
industries and business activities, the economic base
will be robust and support rental growth.
Limited development opportunity
Despite the vast tracts of land in Australia, prime
property for residential development is in very short
supply. There are many reasons for this, with one key
issue being the demand for properties that meet lifestyle
and economic needs. This strong demand and relatively
short supply means prices increasing as a result.
There is much to be said for investing in residential
properties where the boundaries to future growth are
contained within finite development projects with limits
on the number of plots available for development. This
ensures a measure of exclusivity, limited access and
increased demand, with overall returns benefiting as
a net result.
Lifestyle
Despite the vastness and wonder of Australia as a
continent, 90% or more of the population live within
80kms of the sea. If everyone could do so, they would
be closer still. As a rule of thumb, a property within
10km of the water is considered prime. Lifestyle rules,
and why not in a country that is blessed with the climate
and never- ending sunshine of Australia, coupled with
vast tracts of the most beautiful beaches and rivers
in the world? The attractiveness and resulting population
density of living close to the water means that commercial
investments in these areas are also primed for strong
growth. As a rule the tenancy demand for such locations
is high.
It makes great sense to be aware of this lifestyle
fact, and plan accordingly. "Just add water" is
a principle that symbolises growth in nature and all
living things, and that principle extends to investment
property as well. If you are going to invest, then
do so in a lifestyle location where the majority of
Australians want to be: and as close to the water as
possible!
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