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If so your membership can help your children get onto the investment property ladder. We encourage you to forward this week’s Hudson Report to your adult children that own their own home and for whom an investment property may be the perfect investment vehicle to grow their assets and provide a more comfortable retirement.
Whether you have had luck or not in the property market statistics show that property, over the long term, does increase in value as seen in the table below. Ten years ago the average property price in Brisbane was…. Today it’s ????
Furthermore The Hudson Institute invites them to call us and quote your membership number to have a one-on one consultation with a Hudson adviser to see if an investment property is right for them.
Why invest in property?
Leverage: Investment properties are the best way to leverage into a growth asset. Take someone who has $100,000 to invest. Unlike investing $100,000 into shares or most other investments, with property this could be used as a 20% deposit on a $500,000 investment. If the share market rises 10% you make $10,000 on your $100,000 investment. If the property value rises 10% you make $50,000.
Tax advantages: As with any investment, the interest payable on property loans is tax-deductible. Unlike some investments however (shares), there are significant tax advantages in the form of depreciation, especially in the first five years of purchasing a new property.
Reduced volatility: Generally speaking, property tends to be less volatile than the share market, with less inclination for large peaks and troughs and trend lines more like a “staircase”, with periods of growth followed by times when the market is flat.
Where are we recommending at the moment and why?
You may have already picked up from recent Hudson Reports that we are currently recommending Brisbane. This is not always the case and in our 22-year history we have sourced property developments across Australia. Our current belief regarding Brisbane is based on property analysts that we subscribe to, including:
BIS Shrapnel, who in their current annual publication forecast Brisbane to have by far the highest price growth over the next three years out of the eight capital cities.
Likewise, property mogul John McGrath recently told News Corp Australia that Sydney had run it’s course and that he is telling his clients to buy in Brisbane, due to price affordability.
Reasons why people are looking to Brisbane
- The Queensland Infrastructure Plan (2015) identifies approximately $134 billion to be spent on infrastructure in Brisbane and the surrounding area, making this one of the largest public infrastructure spending initiatives ever undertaken. $97 billion of this is earmarked to improve transport.
- Brisbane’s jobs market is growing at twice the speed of this population increase and accounts for nearly half of QLD’s total jobs growth (60,000 jobs created over the past year). It is projected that between 2012 and 2017 there will be over 232,000 additional people working in QLD, with 128,000 of those in Brisbane.
- More than a third of Brisbane residents are employed in professional occupations, just the kind of tenants you want for an investment property.
- There is once again an increasing disparity between prices in Brisbane compared to those in Sydney and Melbourne, which should again see an influx of interstate migration in to QLD as we have seen multiple times in the past. Net interstate migration to QLD has surpassed that in VIC and NSW.
Property investing is not for everyone. It requires a large deposit, or ideally available equity in your home. It also requires that the investor have a surplus income that they are prepared to forego in order to maintain the investment, especially as we see interest rates begin to rise again.
If you or your children would like to discuss whether an investment property is suitable for your/their situation, and to possibly consider developments that Hudson have recently sourced, please call 1800 804 296 to book in with an adviser.