The number one influencer of any property market
When looking to invest in any area, be it right in the heart of Sydney or all the way in the middle of nowhere, there’s one thing that investors need to keep in mind that will have a major influence in the success or failure of the investment.
Simon Pressley, managing director of Propertyology, told Smart Property Investment that no matter what property market is being looked at, investors need to understand that the area’s economy must be seriously observed.
“They're all aware because it's the one line that's always thrown out there. Whenever there's a downturn in mining, 'Oh, one industry town, you shouldn't invest there, it crashed!' If people understand that with a mining town, why don't they understand that with a capital city?” Mr Pressley said.
“It's always jobs, it's what's driven the strongest property market in the country bar none right now; Hobart.
“It is no coincidence that their economy has gone from, that state was in recession in 2014 … [and] It's now up there with Sydney and Melbourne in terms of most of the economic metrics, so that improvement in the economy is what's driven the property market.”
According to him, Sydney’s economy is what drove up its prices to the point of where they are, and despite its flaws, Mr Pressley sees the capital city as one that will always be expensive.
“The best thing Sydney residents can do is accept that's what it is, and there's nothing that any politician, any industry body can say honestly, 'Where are going to fix that',” he said.
For those that currently live or own property in Sydney, Mr Pressley said these people always have the option of leaving.
“The public have a choice though, because there's lots of good things about Sydney, there's five million people who live here, so it's not like there's an electric fence around the joint and people can't get out,” he said.
“There's the jobs, beautiful harbor and that sort of stuff.
“I'm assuming that's why most of the five million people live here, but they don't have to live here.”
If Sydney’s problems are just too much, then people can leave and find something else in Australia, due to rest of Australia operating differently than Sydney, which he said could be attributed to the recent rise of rentvestors.
“That's partly why we're seeing this big trend of rentvestors these last three years. Some people are going, 'I'll have my cake and eat it,” Mr Pressley said.
“‘I won't buy property here, because I can't afford to or I can't justify it,’ but for reasons that are unique to them, ‘I still want to live here, but I'll buy in more responsible [and] affordable locations’.”
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