Secure your future wealth through property

The recent ups and downs of the global and local economy have highlighted the need for Australians to have effective long-term saving and investment strategies that protect against market fluctuations.

Research has shown that over the past two decades residential property has provided investors with the best returns of all traditional asset classes. It outperformed Australian and international shares, listed property, cash and fixed interest investments.

“Most importantly, residential property has been found to be a low risk investment,” stated Derek Whitcombe, Director of Residential Project Marketing at Colliers International.

“Investment properties in the ACT have provided owners with strong rental returns and traditionally have strong capital growth,” Mr Whitcombe said.

“The ACT has a low vacancy rate and high population growth. Interest rates have recently come down again and there are some great buys on the market.”

Many Canberra investors are buying apartments off the plan. One of the major reasons is that stamp duty is tax deductible in the ACT for investment property. This is not the case in all states of Australia.

Investors can also claim tax deductions and depreciation on buildings and fittings.

According to Mr Whitcombe, many investors who buy off the plan purchase with the view to on-selling it prior to settlement. This is due to long settlement times allowing for greater capital growth in a rising market.

“Substantial gains can be made when buying off the plan. For example: If you purchase a one bedroom apartment for $400,000 in Barton and the development takes 12 months from building commencement to completion and the market increases by seven per cent per annum, the value of the property will be $428,000.”

“Compared to what is happening in Sydney, this is a conservative analogy.

“Combined, these factors means residential property investment should be seriously considered by anyone who wants to invest in order to protect themselves against future economic uncertainties.”
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