By Jamie McIntyre
According to an HIA spokesperson, Australia's projected population of 35 million by 2050, means we will need an extra 70,000 homes a year to cater for demand.
Currently in Australia there is a substantial gap between housing supply and demand; our builders just can't build enough properties to keep up. Unfortunately, the Global Credit Crisis has simply caused this gap to widen, with many developers unable to obtain finance to complete existing developments or start new ones.
Thus the gap is set to widen with obvious consequences for house prices, rent and affordability.
In Sydney, rent will rise the fastest at 7.1% annual growth from 2010 to 2012, followed by Melbourne 5.6%, Brisbane 5.0%, Adelaide 3.4%, and Perth 3.2%. According to BIS Shrapnel the average across Australia will be a 5.8% rise. This is largely due to the continuing increased demand from high immigration and the economic recovery which the Construction Industry is unable to meet.
For property investors this is very good news, boosting yields and leading to further price increases.
With interest rates still low, albeit slowly rising, investing in residential real estate in Australia is a very good option.
Despite the obvious long-term pressures on house prices, there are still a few so called commentators who delight in trying to talk people out of property investing, believing the market will still crash.
As predicted by myself and others, it wouldn't happen and didn't.
Shares crashed by up to 80%, however property remained flat. Some suburbs saw a small drop, but they have largely recovered and are on the rise again.
The larger drops were restricted mainly to the top end, particularly in suburbs like Mosman in Sydney, however even this suburb has seen some significant price rises of late.
Despite this, some experts still claim that Australian Property, based on the US and UK markets, will crash. I feel their analysis is deeply flawed.
I'm not saying property will be all smooth sailing, but I'm strongly suggesting the fundamentals do not suggest a property crash of significant proportions.
Personally I think many of the so called property naysayers also have ulterior agendas. I mean who would have liked to have bought more real estate 15 years ago in Australia? Of course, we all would have.
But that's hindsight.
To become wealthy we have to have courage and show foresight.
Get educated, have courage, ignore those naysayers with agendas or bias, make intelligent decisions and above all, take action. It's what you do today that will determine your results in 5, 10, or 15 years from now.
Taking action even if you paid too much for a property at the time, still means you're better off than not investing. Add some basic due diligence and you'll be even further in front. My millionaire mentor always said:
"Jamie the key in life is not to be cynical and never take a risk, nor to be too gullible and fall for anything, but to have a healthy dose of scepticism and remain open-minded so you do your due diligence and take intelligent action, rather than being paralysed by fear, or doing something you'd later regret."
People fail because they are either too cynical or too gullible. Tread the path down the middle where it's less crowded.
Jaime McIntyre is founder of 21st Century Group of Companies.
21stcenturyacademy.com
