Why Property Is Still The Best Long-Term Investment

Turn on the TV or read the newspaper and the Australian property market is tanking, but step back from the noise and you’ll see it is a different story long-term.

For owner-occupiers purchasing a property is hands down one of the smartest investments you can make thanks to your primary residence being exempt from capitals gains tax.

What does that mean?

Basically, if you sell your house for more than you bought it for you will not have to pay tax on the profit you have made. For other assets, such as shares, the government requires you to pay capital gains tax on any profit you make.

The Long-Term Australian Property Market

Regardless if you’re an owner occupier or investor the long-term outlook for the Australian Property Market still looks positive thanks to the country’s growing economy and population.

The latest projections by the Reserve Bank of Australia show the economy growing an average 2.75 per cent over the next 3 years. Over the same period, unemployment is expected to decrease slightly to 4.75 per cent.

Source: https://www.rba.gov.au/publications/smp/2019/feb/economic-outlook.html

Meanwhile, Australia’s population is projected to increase to between 37.4 million and 49.2 million people by 2066.

Source: http://www.abs.gov.au/ausstats/abs@.nsf/mf/3222.0

What this Means for Property?

Historically in Australia population and economic growth have led to higher housing prices, and this is likely to continue.

Throw in the livability of Australian cities, which should continue to improve thanks to multiple governments investing in large infrastructure projects (link to infrastructure article), and you’ve got a solid case for continued housing price growth.

Melbourne and Brisbane are Australia’s Fastest Growing Cities

Source: https://www.abs.gov.au/ausstats/abs@.nsf/latestProducts/3218.0Media%20Release12017-18

Sydney may hog the headlines, but when it comes to population growth Melbourne is Australia’s fastest growing capital city followed by Brisbane.

So, for those looking to escape the country’s largest city, there are options north and south.

Speak with a Mortgage Broker in Sydney, Melbourne or Brisbane today.