The REAL Problem for Property Investors
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Standard property investing is not
living up to expectations.
Looking at infrastructure, migration, and government spending are no longer enough data points to base
investment decisions. We need to look at the way people are living and create living alternatives that
cater to those findings. We need to look at who the people are that are going to rent your investment
and build something to fit – not the other way around.
People looking to rent
right now are either singles, couples or live with friends/family.
dwellings available to rent on the market are 2+ bedroom dwellings
are suitable, both in availability and affordability (supply).
Right now across Australia, there is an over supply of standard family homes.
The majority of people looking to rent simply don’t need what is available and simply can’t afford it. With over 30% of Australia’s population renting, 48% of renters have a personal income of less than $35,000 a year.
It gets crazier …
Most investment advisors still push their clients into family homes and the majority of investors still opt for a 3+ bedroom home. This rut of investment stock is further hardened by our bank’s influence over approving finance. Anything that isn’t benchmarked against the standard home, tends to get undervalued which cripples any new stock providers offering something that the market actually wants.
- Should I buy new or established property?
- Should I buy a house or unit?
- What location should I buy in?
- What are the economic drivers in an area?
- What returns should I be looking for?
- Should I focus on cashflow or equity increase?
- Is negative gearing good for desired outcome?
- How do I ensure I have tenants?
- What happens if my property is vacant?
In the history of Australian property supply vs demand,
we have the largest mismatch on record.
The 4 bedroom family home is the holden commodore of the investment landscape in Australia and look at how that turned out. People refer to the Australian dream and that still applies to families, but more and more people are no longer fitting that ‘family’ mold.
For those that find a studio or 1bed apartment are then struck with a variety of new challenges, affordability, and Social Isolation.
Just because individuals can live in a studio, doesn’t mean that it’s affordable – quite the opposite actually. Per dollar, people who live by themselves are the worst affected in Australia with an average 44.4% of their wages spent on housing.
As a result of being on their own and added accessibility to digital ways of connection, social isolation contributes quite significantly toward mental health issues