Investing in property is still one of the safest ways to boost your assets over the long term.
In Sydney’s eastern suburbs, you’re relatively well protected from any instability affecting the wider real estate market. If investing in the east is part of your financial plans, I’ve got your questions answered.
What are the current trends for property investors?
As a whole, the Australian property investment market includes around 2 million property owners. In Sydney, these investors have continued to ride a wave of capital growth, with property values throughout the metro area increasing 11% year-on-year according to the latest CoreLogic data. Despite continued talk of an eventual real estate slowdown in Sydney, I’ve seen no sign of decreased investment activity across the east over the first half of 2017.
How much capital growth can I expect?
At the moment, investors in Sydney’s eastern suburbs can expect to see annual growth of around 5-10% per year, but this does vary considerably depending on suburb. Surry Hills, for example, saw capital growth for houses of 8% last year, while in Randwick annual growth was as high as 13%.
Expert advice is crucial to get a clear picture of the markets you have on your list. Even though financial forecasters are predicting a slowdown, to single-digit growth over the coming 12 months, there are still plenty of suburbs in the east more than likely to remain strong.
What about the negative gearing factor?
Even though the recent federal budget signalled tougher rules for investors, there are no changes in the coming financial year that will impact negative gearing. The new investor rules are focused on expense claims and depreciation, along with occupancy minimums and Capital Gains Tax requirements for overseas investors. The fact is that investors who are still working can continue to rely on negative gearing to make the most out of their property.
Can I invest using my super?
Nearly a decade ago, super legislation changed to allow investors to borrow with their super to buy property. Today, one out of every three investors I meet is buying through their super fund, with the majority of these buyers looking at units on either side on the $1 million mark.
The rules of your particular fund will dictate whether you can use it to buy property, so while it’s definitely worth considering, it’s important to talk directly with your fund manager before you start making plans.
My key piece of advice to all investors is to research your target markets in detail. Once you have a clear idea of where you want to buy and the type of property you’re aiming for, take the time to talk with an expert in your target area to get the latest on emerging investor trends.