{"id":180491,"date":"2025-02-18T16:30:38","date_gmt":"2025-02-18T05:30:38","guid":{"rendered":"https:\/\/propertyupdate.com.au\/?p=180491"},"modified":"2025-02-28T01:29:14","modified_gmt":"2025-02-27T14:29:14","slug":"7-reasons-for-property-investors-to-feel-positive","status":"publish","type":"post","link":"https:\/\/propertyupdate.com.au\/7-reasons-for-property-investors-to-feel-positive\/","title":{"rendered":"7 reasons for property investors to feel positive about 2025"},"content":{"rendered":"

It looks like we\u2019re going to have another good year in property in 2025.<\/p>\n

Last year property prices across Australia<\/a> defied expectations, defying all the predictions of high interest rates causing a market slowdown and hitting new peaks in many locations.<\/p>\n

Strong population growth and defective we are just not building enough houses led to a housing shortage that put upward pressure on prices and rents.<\/p>\n

\"Price<\/p>\n

However, signs of softer market conditions emerged late last year, when the pace of price growth and auction clearance rates eased \u2013 and that is expected to continue until interest rates fall later this year.<\/p>\n

\"Monthly<\/a><\/p>\n

In fact, there is still a wide range of economic challenges that our housing markets will have to contend with in this new year, but there is also a combination of growth drivers \u2013 what I\u2019d call a \u201cperfect storm\u201d \u2013 that should lead to a period of further property price growth in 2025.<\/p>\n

While usually the term \u201ca perfect storm\u201d refers to a highly negative scenario, in this case, it\u2019s a positive one, especially if you are a property investor, because\u2026<\/p>\n

You can always beat the averages.<\/strong><\/p>\n

While it\u2019s likely that property price growth will be lower in 2025 than it was over the last few years, the good news is that if you don\u2019t like the outlook for what property will do on a national level, you can always beat it by investing in the right property in the right location.<\/p>\n

Now by that, I don\u2019t mean look for the next hotspot.<\/p>\n

I mean buying quality properties in locations that will outperform in the long term such as gentrifying suburbs.<\/p>\n

You see...property offers countless opportunities to improve your results through your own time, skills, and knowledge \u2013 so you don\u2019t need to settle for average.<\/p>\n

And there\u2019s more to it than just location. You can add value through refurbishment, or redevelopment.<\/p>\n

Having said that, let\u2019s look at\u2026<\/p>\n

\"Price<\/p>\n

7 factors that will drive further property price growth in 2025<\/h2>\n

1. A mismatch of supply vs demand<\/strong> - continuing strong immigration is creating an unprecedented demand for dwellings, but very little new building is in the pipeline and any new construction will have to be considerably more expensive to make it financially viable.<\/p>\n

This has created a level of \u201cintrinsic equity\u201d in established properties that cannot be replaced at their current market value.<\/p>\n

\"Construction<\/a><\/p>\n

Moving forward, demand is going to continue to outstrip supply for some time to come as we experience strong levels of immigration at a time when we\u2019re just not building anywhere as many properties as we require.<\/p>\n

At the same time, the cost of construction of delivering new dwellings will keep increasing not only because of supply chain issues and the lack of sufficient skilled labour but also because builders and developers will only commence new projects if they are financially viable and currently new projects will need to come on line at considerably higher prices than the current market price<\/p>\n

2. A relatively stable Australian economy with very low unemploymen<\/strong>t rates and with Federal and State Government spending initiatives and infrastructure projects that will keep driving our economic and employment growth.<\/p>\n

\"State<\/a><\/p>\n

3. The security that interest rates are at their peak<\/strong> and will fall later this year.<\/p>\n

<\/div>\n

As a result, if you\u2019re buying a property and the numbers work today, it\u2019s highly likely that they\u2019ll work better for you in the future when rates drop.<\/p>\n

And when rates do start to fall and buyer and seller confidence returns... the property cycle will move to the next stage as pent-up demand will be released as greed (FOMO) overtakes fear (FOBE - Fear of buying early), as it always does as the property cycle moves on.<\/p>\n

4. Historically low vacancy rates<\/a> and continuing rising rents<\/strong> and no end in sight for the rental crisis \u2013 meaning as a property investor your cashflow position is only likely to improve over the next years.<\/p>\n

\"Rental<\/a><\/p>\n

6. Increasing consumer confidence<\/strong> \u2013 the continual conveyor belt of negative news and concerns about the cost of living, rising interest, rates and inflation meant many Australians weren\u2019t prepared to make large financial decisions such as buying a home or investment property over the last couple of years.<\/p>\n

However, in 2025 it is likely that more buyers will enter the market as they realise that inflation is under control, interest rates have peaked and the economy isn\u2019t going to fall in a heap like many of the Negative Nellies predicted over the last few years.<\/p>\n

This creates a current window of opportunity for those who get into our housing markets before the crowd.<\/p>\n

Not that I suggest you try and time the market- this is just too difficult, and in truth, you\u2019ve missed the bottom which occurred two years ago in early-2023.<\/p>\n

But if the market hands you an opportunity like this, why not take advantage of it?<\/p>\n

Taking advantage of the upturn stage of a property cycle has created significant wealth for investors in the past.<\/p>\n

7. A return of international demand<\/strong> for Australian property \u2013 foreign investors are back in the market which is only going to help underpin property values.<\/p>\n

\"Price<\/p>\n

Immovable economic forces are on your side<\/h3>\n

If you think about it, property investment is as close to a game rigged in your favour as it\u2019s possible to get.<\/p>\n

The market is so big that neither the government nor the banks are prepared to let it fail, but more than that every year, inflation puts upward pressure on property prices (as with everything else).<\/p>\n

It does the same for your rental income stream.<\/p>\n

Yet the debt you used to buy that property is not indexed to inflation \u2013 it stays the same,\u00a0 meaning that over the long term, the gains in the property\u2019s value all accrue to you and not your lenders.<\/p>\n

This isn\u2019t an argument for complacency<\/h3>\n

So while the property markets will create significant wealth for many Australians, statistics show that 50% of those who buy an investment property<\/a> sell up in the first five years.<\/p>\n