Talk in the market place that property prices will be slashed in half has been discredited by yet another strong month of house sales across Australia.
Whilst economists differ in their opinion, the media gave widespread attention to Jonathan Tepper, a US researcher, who claimed house values would drop by 50% this year. However, if you go to any Sydney auction, or any of the capital cities, it is obvious that this prophecy is not slowing consumers down.
For many years the property market has struggled to keep up with demand and as such prices rose significantly. However, now that the population growth has slowed and the construction across Australia has grown, we will start to see a more balanced market place. This combination will result in a slowdown of property prices, that does not mean properties will necessarily lose their value, but there will not be any further inflation in prices for the time being. The slowdown is a welcome relief to first time home buyers who are struggling to enter the market place. Whilst properties seemed like they were on a never-ending rise in value, it is now starting to settle down and become a much less volatile market, where buying your first property seemed almost impossible.
Investors will have more options, however so will renters, therefore location is definitely the key to success in this market. Go where demand is and try to find places that are planned to boom, this is where the real financial benefit lies.
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