Property Investment in Melbourne A Preferred Asset in Downturns
This first half of 2020 has proven to be a roller coaster of a ride. Due to the Coronavirus pandemic that had taken everyone by surprise, the world, as we know now, has been pretty much ground to a halt and has been left unsure as to what the future might bring. This point stands no more accurate as regards to the global market. With most of the general population left unemployed, leaving people barely managing the necessities and rising mental health issues, this global pandemic has slowed down the market and, with its low overall consumer confidence. This means that people are more hesitant to invest, especially when it comes to property investment in Melbourne.
Now the current situation may be real and frightening; there are still financial positives to any downturn. There are a few points that might help you navigate the investment property market during these uncertain times. No need to worry, a property investment advisor can help you weather the current situation
Real Estate vs. Other Asset Classes
The reason why we love real estate so much is that compared to the other asset classes, it tends to be a preferred vehicle for investing. It tends to be a much safer option for a lot of us when choosing the right investment instrument. In every downturn, real estate tends to be ahead against other asset classes, thus, not losing as much as others.
If you look at the recent times in the global financial crisis, specifically the 2009 recession, where the property downturn only lasted for a couple of years, you would see how fast the real estate market bounced back almost quickly. Unlike the previous 2008 – 2009 crisis, which was heavily influenced by housing, mortgages and such, today’s economic crisis, however, is not. Therefore, experts anticipate that the pending recession caused by this pandemic will behave more traditionally.
What does this mean for you as an investor? Well, it means that carrying out a property investment strategy could be profitable in the long run. But you will need a solid plan that involves a good understanding of your local market, amongst other things. Good thing, a property investment advisor can help you with a profitable investment strategy.
One of the safest things about buying a property, whether during a crisis, a downturn, or even during good times, is the rental demand. Due to population growth, it is stronger than ever. And because of the current global pandemic and its effects on the market, people are currently taking a long time to save for a deposit and opting to rent for the time being. Rental properties may be your one stable source of income during this pandemic.
Historically speaking, when a recession happens, housing is often affected, and when people can’t buy houses, they rent. And so, investors might be able to use this situation for property investment Melbourne, especially property rental is a steady source of income during these uncertain times.
But of course, this doesn’t come without its challenges. Given that the majority of the world is currently on lockdown and/or in a modified version of such, businesses big and small have closed down temporarily -and some even, permanently, leaving unemployment on an all-time high. This inevitably jeopardizes the rental industry due to renters who have suddenly lost their income and cannot pay rent.
This presents a whole other set of problems when it comes to rental owners. Here in Australia, states and territories have agreed to a 6-months moratorium on evictions for tenants in financial distress. Details of which differ under each state and territory jurisdiction. But in general, it is better to seek advice from your property investment advisor on how to handle this situation during these uncertain times best.
As more and more people want to rent due to affordability, this creates a more competitive market for investors like yourself. With historically low-interest rates of 0.5%, it’s never been cheaper to have a property investment in Melbourne.
“When people are fearful, be greedy.” This quote, made famous by Warren Buffet, is a great philosophy to live by. It talks about how one should go against the flow, to go against the tide. And no words are more exact than this. Especially in the property investment market, no matter how frightening this may seem.
Investing in Properties
During these unprecedented times, it’s not a surprise that more people are holding on and waiting out on the market than investing, especially if there are financial uncertainties. But if you are financially confident during this time, we highly think that it’s a good time for you to invest, particularly in properties.
Property investment Melbourne may prove better than investing in stocks during this time. But you have to make sure that you are well-prepared liquidity-wise. Meaning, asking yourselves questions like:
- Would you have enough personal savings to weather this pandemic for months?
- Would you have dependents that would need financial support during this time?
- Is your job stable enough, or are you anticipating unemployment?
- Do you have enough to set aside for medical emergencies?
These questions and more -depending on your current state- may help you start navigating your way through the property investment market during this global pandemic.
It is always best to consider the importance of a long-term perspective rather than short-term reactive thinking. You have to consider things like demographics, supply and demand, affordability, and local economic trends to weigh your decisions thoroughly. But no need to worry, because a property investment advisor can help you take advantage of what the market has to offer.
No one knows when this will be all over. As of the moment, there is no known vaccine yet for the Coronavirus though recent tests that have been done by several countries showed promise with specific antibodies produced during the trials. And because of that, the waiting game is pretty much still indefinite and very much on.
But no matter, over the long term, it will pass. And we all come out and move on from it.
Property Investment Melbourne
Here at Logic Property Group, we encourage you—aspiring investors and seasoned ones—to meet with your property investment advisor, and chat with them; seek their advice and reassurance. It’s always a good thing to consult with professionals rather than make long term plans based on the last news announced.
We can help and teach you how to invest in caution in times like this. We understand that there will be people who would rather sit this one out and wait a while, or there will be people who would take advantage of this market and invest. And we can definitely help you work one out properly.
There is no doubt there will be opportunities in the market for those willing to go against the mass. Those who took on such risks will remember the events of 2020 as an excellent opportunity for them.
No one knows what the effects might be of this pandemic in the future, but with the help of a property investment advisor who knows the accurate and recent trend locally, we can turn your decent guess into a strategy. Call us at 1300-LOGICG (564424) or send us a message now.
The information on this post/video is of a general nature. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions.