Do you ever feel that there are so many different messages about the property market that you end up confused, and not sure what to do? If so, don’t feel alone. Many people are confused by the apparent contradictions in what’s happening in the market, and the fact that there is no single set of housing data to rely on doesn’t help matters.

That said however, one thing is clear: the investment property sector is growing steadily, as Australians look for an attractive long-term strategy built on the rock of our strong economy.

So how do the property investors see it? How could we summarise the view from their chairs? What do they see in our current circumstances that gives them the confidence to invest right now, in the expectation of solid returns in the future?

In my view, they are making investment decisions based on the following:

1. The housing backlog currently stands at between 170,000 and 200,000 units
2. This backlog increases by about 30,000 each year
3. The slow release of property development and land releases is unlikely to change
4. Migration to Australia is running at an all time high
5. Even a slowdown in migration won’t affect the situation greatly due to changes in social living patterns and local population growth
6. Rental prices are increasing due to increased population, hence greater demand
7. Property prices have kept rising as a result, even through the Global Financial Crisis
8. The government provides generous tax concessions for property investors that effectively reduce income tax
9. Interest rates are not high – they are now regarded as ‘normal’
10. The Australian economy is leading the world in recovery from the global slowdown
11. First home buyers are withdrawing from the market
12. The ‘heat’ in the housing market is therefore reducing
13. Property investors can pursue their goals with less competition
14. The property market is far less volatile than the share market
15. It is also less volatile than super returns, which are tied to the share market
16. An effective investment property strategy can set you up for a comfortable retirement
17. More and more Australians are seeing that superannuation can never be enough, and are becoming property investors
18. Investors are using equity gains in their homes and investment properties, to serve as deposits for new investments
19. The banks are prepared to lend against good mortgage applications, for well-priced and well-located investment properties, with appropriate loan-to-value ratios
20. The investors, therefore, are buying, and increasing their share of the market.

In summary, what should you be doing? In our view, review the points above, and look at your own situation to see if you are able to join the property investors who see great opportunities in the current conditions. A big plus would be equity in your own home. This is a great starting point, and it is the absence of this (ie a deposit) that is locking first-time buyers out of the market.

You could well be in a position to get in, at a time when others just like you are leading the way.

If you would like to learn more and discuss how McCarthy Group can assist you, click here.