Australian Property News
Don't buy for the wrong reasons
Posted on Tuesday, February 02 2010 at 12:10 PM
It has been well reported that Australia - or parts of it - is facing a housing shortage, but that's not necessarily a good reason to buy, according to a property expert.
Many say a housing shortage keeps markets buoyant - in Sydney, for example - pushing up prices and rents.
But Destiny Financial Solutions founder Margaret Lomas is cautious about predictions for housing shortages.
She says the mere fact that it's reported we're going to face a housing shortage in a particular place could be a catalyst for people to decide to settle somewhere else and also for developers to build more stock in that area.
"The predicted housing shortage is just that - it's a prediction - it generally becomes the catalyst for some change that will stave off the shortage," she says.
She says people shouldn't take a predicted housing shortage into account as a valid criteria for making investment decisions upon, nor predictions of a so-called 'boom' in any particular area, which is sentiment driven.
"I wouldn't buy property in a state that has the biggest predicted housing shortfall," she says. "There's no correlation between a predicted housing shortage and better growth.
"It's not a criteria investors should be using. The only way you can make a good investment decision about where to invest is by taking into account a huge range of criteria."
That criteria, she says, includes infrastructure planning, population growth and average median income growth. They foster the kind of growth that continues to occur year in, year out, according to Lomas.
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