Invest in the right location in 2024 – here’s how
Looking to invest in the Australian property market this year?
It can be easy to put all your faith into a little tip off from a friend or family member, saying ‘Ooh, yes you should definitely invest in *insert random friend’s childhood town*’, or ‘I know the BEST place no one knows about’.
And yes, it might be done in a kind, helpful spirit, but can you really make an informed decision based upon it?
Rather than rumours and unsubstantiated theories, property investment is all about the analysis and understanding of trends and economic indicators in order to work out what’s best for YOU.
Like with anything, knowledge is a springboard for action – and the more you know the more opportunity you have to succeed.
So, here comes your latest dose of Propell knowledge – we’re going to tackle the 4 key things that are crucial to any investment property location in 2024.
- Economic growth
Why is this such a great thing to look at?
Well, we love looking at economic growth as it provides an excellent indication of the long term stability of a town, or region. And as you might already know, we LOVE long term investment – it’s what builds wealth and helps smash those financial goals of yours. Want to learn more about why it’s so great? Check out our recent blog HERE.
Economic indicators such as unemployment rates, household savings, average weekly earnings and the consumer price index are all great measures of a state or region’s economic potential. We also love looking at employment growth, as this highlights a true increase in the job market, ensuring demand in the area is growing,
Property-specific economic indicators, such as auction clearance rates, annual rental increases and rental vacancy rates provide some great detail into how the property market is looking within a particular area.
- Population growth
In the last financial year, we saw record population growth in Australia – a level that is expected to be reached again in 2024. Population growth inherently means more demand for properties – and provided there is no proportional increase to supply, prices will RISE.
As much as national population growth is an important factor in understanding the overall market, finding an ideal investment location also relies upon looking at localised population changes.
We are now beginning to see an uptick in population growth from overseas migration now that borders have reopened and international travel is more widely utilised. So, it’s easy to say, ‘Yep, the population is going up, so I can buy ANYWHERE’. As much as you may get lucky in the long term, this isn’t the most sustainable outlook. We find it incredibly beneficial to consider population change within certain smaller areas, such as suburb by suburb or city by city.
An excellent example of this occurred a couple of years back, in 2021, when South-East QLD saw a net increase of around 1100 people PER WEEK. This huge influx of people led to major demand increases, and major price increases. In 2021 alone, our friends at CoreLogic highlighted that the Gold Coast recorded a 26.7% jump in house prices.
Understandably, this wasn’t the only factor driving these price increases, but it’s certainly something to be very aware of – population growth can be a game changer.
- Demographics
At the end of the day, we always want our investment properties to have tenants in them. Not just any old tenant – but ideally HIGH QUALITY tenants who appreciate the value of your property and living in a great home.
This is where demographics come in. Australia is an amazing place for all of our different demographics, whether it be culture, race, socio economic or age – it’s truly what makes this country great. When it comes to investment, identifying the demographics that help you best is key. This depends slightly on the type of place you’re investing in, and the price range that tenants will be paying. So by identifying the ideal demographic, for example a young professional family, or maybe a middle class couple, you are able to understand whether an area will suit you or not when it comes to investment strategy.
- Infrastructure
We’re all about quality infrastructure.
For a location to be a strong investment opportunity, it must have a strong and growing presence of high quality infrastructure. We love looking for a combination of great public transport, hospitals, sporting venues, and high quality roads.
Capitalising on infrastructure development, which is put in place by the government to cope with growing population, helps to provide security when jumping into the investment property market.
This is something we’re seeing a whole lot of across South-East Queensland ahead of the 2032 Olympics. With a regional uptick of $8.1 Billion, you just need to look up at all of the cranes in the Brissy and GC skylines to see the growth that’s on the way – not to mention the improvements to roads, hospitals and sporting venues.
When all is said and done, these 4 concepts provide an incredible amount of data and insight into an area’s viability as a property investment option.
Just remember though – as important as numbers are, they mean nothing without a sturdy plan that aligns exactly to your unique situation and goals.
Are you looking to invest in quality property in 2024? Want to learn more about our tailored Propell Property Plans? Send us a DM or give us a call on 1300 776 735, we’d love to help!
