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Why invest in property? Why now?

Updated: Jul 28, 2020

Investing in uncertain times is always a challenge. But property, historically, has always been a winner.

Property has been the source of wealth for many Australians. Investing in property funds that deliver superior returns is one way investors can spread their risk.

When to invest?

“Timing means everything and nothing.”

If you had invested in property at the peak of the market in 2007 just before the GFC, you would still be ahead. It's a simple mathematical fact. So, anytime is a good time to invest, but being counter cyclical creates the best potential for returns. So, investing at times of economic uncertainty when values are low, means your investment is likely to grow more than it would if you invested in the middle of a boom.

Where to invest?

You don't have to be an expert to make big return from property.

Investing in funds that invest in property is an easy alternative. Look for funds that provide returns that reflect the risk of their investment.

And, consider spreading your investment across both debt and equity investments to give both capital returns and a regular income from your investments.

Keep a long-term focus

“Historically property values have seen double-digit growth in the 12 month after systemic economic shocks like Black Monday in 1987 and the Global Financial Crisis.”

Australia's property market has traditionally done relatively well during global economic shocks. Big sharemarket losses and recessions are not necessarily predictors of property declines, according to analysis by Eliza Owen, head of research for CoreLogic.

For example, Australian property prices were eventually boosted by the 1987 Black Monday sharemarket crash that shaved 23 per cent off the sharemarket's value.

“Investors switched from shares to property,” AMP chief economist Shane Oliver says. The local market also performed strongly during the Asian financial crisis of 1998 and the "dot-com" bust of 2000.

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