By mid-2021, tabloid headlines will have gone full circle in a 12-month period, from “market crash” during mid-2020 to “rental and ownership affordability crisis”, a property expert predicts.
According to Simon Pressley, Propertyology head of research and REIA hall of fame inductee, for a big chunk of Aussies, never before in their lifetime will there have been a better set of conditions for investing in one’s future than right now.
But, while it is one thing to recognise the opportunity, it is a completely different skill to execute and optimise full potential.
Accordingly, Mr Pressley offers some general parameters which he believes every investor should respect:
1. “Totally avoid apartments, new and established,” Mr Pressley advises.
According to Propertyology’s research, the financial performance of high-density apartments in Aussie cities has not been great over the last decade. As such, Mr Pressley urges investors to consider the price growth differential between a standard house in their city and apartments that are considered to have produced asset value growth.
2. “Contain one’s own confirmation bias and ignore the opinions of a cast of thousands whom haven’t earnt a reputation as a property market thought leader,” Mr Pressley says.
Confirmation bias, according to Psychology Today, involves embracing information that confirms one’s own point of view while simultaneously ignoring or rejecting information that casts doubt on it.
This bias, warns Mr Pressley, can make people prisoners of their own assumptions.
3. “Be smart when selecting locations,” says Mr Pressley.
That, he opines, begins by properly reviewing the fundamentals of each of Australia’s 183 individual towns.
“The best-performed property markets are almost always in locations that very few investors give the time of day,” Mr Pressley adds.
4. “The individual town that one invests in will always play a much bigger role in financial performance than the individual property,” Mr Pressley believes.
He noted that investors who find themselves obsessing over train stations, shopping centres and brick and mortar of property could be overlooking “a lot of this really important stuff”.
5. Mr Pressley also encourages investors to consider seeking out professional advice, particularly in terms of location and asset selection, but also in terms of building a sustainable investment strategy.