Nila Sweeney

If there was a bubble in the Australian property market it has well and truly burst. That could be a painful fact if you already own investment properties but it could be great news for first-time property investors.

Experts agree that capital growth could be sluggish for years to come in the Australian residential property market. That’s terrible news for existing property investors who may have borrowed to the max to buy over-priced real estate at the peak of the boom.

If you’ve never invested in property before, however, it could represent an excellent opportunity to purchase at the bottom of the market and hold fast for a return to healthy long-term growth.

Here are the key facts investors need to know about real estate prices in Australia right now:

1. Prices are either stagnant or have been falling in many locations

2. Capital growth could be weak for years to come

3. Rental returns are healthy at the moment so good investment properties continue to produce reliable income even if they are not going up in value

4. There are bargains everywhere for property investors but you need to be a good prospect for lenders and be able to ride out potential interest rate increases

5. New investors will need to be able to weather inflation in the years ahead as the resources boom really gathers pace

6. Strong demand driven by population growth, and a shortage of supply in some areas, will underpin a strong long-term outlook for capital growth but patience and a long-term investment horizon will be essential


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