Can you lose money in a booming property market?

Bloody oath you can!

According to the September 2015 quarterly report from Corelogic Australia , 8.4% of all homes resold across Australia recorded a gross loss, compared to their previous purchase price.

On the other hand, approximately 31.4% of homes resold for more than double their previous purchase price.

So while some property owners were making a killing others were making a loss. The key to their success appears to have been length of time of ownership. Those making a loss had an average ownership period of 6 years, those who made profits had average ownership of 10 years and those who’s values doubled had ownership of 16.9 years.

While the old adage of “Property is a Long Term Investment” may get bandied about, the proof really is in the statistical pudding.

These numbers are a broad overview of the national markets, different markets around Australia had their own wins and losses. Including Sydney, where only Hunters Hill and Burwood didn’t record sales that showed a loss. All other suburbs had sales that revealed a loss.

In Regional Australia, loss making resales tended to be centered on markets linked to the resources sector, and the profit making areas have been linked to tourism and lifestyle factors. Some of the best performing areas nationally across city and regional markets have been identified as Sydney, Illawarra, Newcastle and Lake Macquarie, Toowoomba (QLD), Geelong (VIC), Bendigo (VIC), Melbourne, Central West NSW (Orange, Bathurst), Far West and Orana NSW (Dubbo and surrounding towns).

Given the cost of entry into some of these capital city markets, the regional markets are once again becoming the market of choice for the savvy investor. These areas have sustainable capital growth, solid yields and broad based economies, as well as great lifestyle benefits, which appeal to the owner occupier and investor alike.

Like all great investments, the key is research into finding the correct assets which will maximize the potential of the investment. Regional centres are a different animal to capital cities, and finding the right property in the right market sector is critical. If you don’t have an in-depth working knowledge of the local area, engage someone who does.

The longterm return will far outweigh the initial investment. Talk to Aspect Buyer’s Agency – The Regional Property Experts