It really annoys me that there are so many misconceptions and myths about property and specifically investing in property.
I talk to clients every day and these are some of the common held beliefs that are kicking about…
What a load of rubbish!
I admit there needs to be a drop in property prices in many overinflated areas of Sydney and Melbourne but that’s because they've had ridiculous high growth for the past 5 years. Some areas have had 60 – 70% growth. These properties need to drop and probably by about 25 - 30% to bring them back in line with normal rates of growth of about 7%.
Sorry Sydneysiders but your $1mill property in 2012 went up to an artificially inflated $1.7mill by 2017/8 but has now come down to what it should be which is nearer $1.3 – however the end to 2019 and probably well into 2020 prices are again on the increase but more for prestige high end homes.
5 years at 7% would be about 35%, which is where a lot of those Sydney and Melbourne suburbs should be - and probably will end up.
For all the other regions in Australia who have experienced consistent average growth of between 4 – 8%, these prices should continue along this trajectory.
Remember, those headline-grabbing, so-called property experts, have been predicting that the Australian housing bubble would burst for the past 10 years.
Once again, a totally incorrect statement.
Every single day banks are writing interest-only loans and at competitive rates. Sure banks are encouraging investors to do principal and interest loans by offering slightly lower interest rates but to say lenders are not doing it is political scaremongering.
In fact now coming to the end of 2019 some banks are offering 95% interest-only loans!
All major Australian lenders are still offering interest-only loans to investors!
This is simply not true.
As an investor, you are entitled to claim these very lucrative depreciation deductions in your tax return, come tax time.
Brand new residential properties (both newly constructed and purchased brand new from the builder) have the most deductions available to be claimed, as all of the structural elements of the property and smaller fixtures, fittings and appliances can be claimed for.
An amendment to the tax legislation in 2017 by the Federal Government has changed some of the eligibility rules for investors that purchase a property ‘second hand’, and as a result, some of their depreciation deductions have been limited.
It’s true that since the 90’s this has increased but so have our demands for luxury living. However 30 years ago the average Australian was spending over 30% on housing, now that figure is below 20%.
That's because interest rates were so high. From the mid 70’s to the mid 90’s rates were above 10%, which peaked from 1986 to 1991 when they are averaging about 15%. That's nearly 4 times what they are now!
No wonder our parents were stressed out trying to make ends meet.
So if you're over hearing about these myths too and would like to have a chat, I'd love to talk with you.
If you're interested in the myth-free side of property investment, click here and have a look at the properties we have available now.
Or if you'd just like a chat about what's happening in the property market, I'd love to hear from you. Here's my best number...1800 088 437