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By the start of the next year, it’s high time you change your opinion about the property ‘hotspots’. Each year, numerous lists of property hotspots come up. Many a times, the prediction of hotspots being the next big growth areas is proven wrong. Is that how it really works? Maybe, it isn’t.
So how should one evaluate property hotspots? How about having a strategic approach? You can find an investment that will outperform the market. Most of the next big growth areas turn under-grown from over-grown. They eventually don’t live up to our expectations.
The dilemma, however, can be dissolved the way we’ll analyse the driving factors of the market. These may include-
- The slowing Australian economy. The answer by the Reserve Bank of Australia about how it is going to respond with interest rates will certainly play as a major driving factor.
- Australian Prudential Regulation Authority (APRA) will probably target investors and now owner-occupiers. Thus, the demand by them and by the new investors and the homebuyers who have been ‘stringy’ paying back their service loans will slow down. In addition, for the investors who possess large property portfolios and are dependent on rent for serviceability, getting a loan will actually turn a ball and chain.
- Population growth will play a great role too. There is no second thought on the fact that population growth will be there, though, slow, but still there. The population eventually will head to the big cities like Melbourne and Sydney, mostly for the jobs and industries that are creating jobs.
- Interest Rates. The investors will certainly look for the then present interest rates. It’s predicted, however, the interest rates in the next year will remain low. It’s also said that they might drop, provided the economy falters.
- The stable federal and state level government can make a difference too. A business confidence is seen increasing because of the stability the government.
All of the above are seen as driving factors in the investment you are planning. Overall, the year 2016 is a year that is predicted not to set the same and good house price growth as the year 2015 did. This makes it easier for people to purchase land packages or houses because there will be a countrywide fall in the price.
Luckily, RBA is not expected to increase the interest rates by 2017. Instead of choosing the hotspots, check out the homes matching your needs and requirements the best.