WHAT IS THE BEST INVESTMENT CHOICE DURING VOLATILE TIMES? PROPERTY IS THE RUNAWAY WINNER

Over the last few weeks, economists, investors, and anyone paying attention to the news are seeing black clouds moving in from the horizon. The overall feeling is uncertainty, which leads to hesitation when it comes to spending and investing. However, even during volatile market shifts, Australian property continues to be a strong performing, safe asset for investing.

For investors, there are four main choices when deciding where to invest their money - cash accounts, bonds, stocks, or property.

“Putting your money into the banks or bonds is a safe, but slow burn, sometimes earning as low as 1 or 1.5% in a year, says Matt Sully, CEO of APFG. “I can understand why they may seem like the best option when there are downturns in the market. Investors may want to just sit and wait it out.

“However, history has proven that property investing is safe and can earn returns that are on par with stocks, but without all the risk. If anybody decided that the property market was too risky for them and they invested in the Australian or American stock market, they regretted it last week, when prices went south overnight” says Sully.

According to the Vanguard Index Chart, Australian listed property has become one of the strongest performing asset classes, with a 8.4% p.a. return over the last 30 years. However, this chart was for the period ending 2021, and during the last year, property prices have increased an additional 14.1% nationwide. Conversely, at the time of this article’s publishing, the ASX 200 has fallen 12.72% over the last year.

Australian property investors will continue to earn returns, even as the market slows.
Australian property investors are very pleased at the moment. Not only are they seeing their wealth grow without lifting a finger due to the increasing property values, but they also have the added benefit of rental income as well.

According to the Australian Bureau of Statistics, Australia’s soaring property prices drove household wealth to a record high, up 4.5% to A$14.7 trillion in the final quarter of 2021. Home values contributed 3.5 percentage points to the quarterly increase.

See More: One In 10 Australians is a Millionaire. Are you one of them?

With the Reserve Bank of Australia raising the borrowing rate this month along with expected steady increases over the coming months, the property market is expected to cool. Experts predict that housing prices will fall, with ANZ predicting only a shallow fall of 6% for housing prices in 2023, while CoreLogic warns that some markets could see double digit decreases.

“Unlike stocks, property is not going to go down 20% overnight. While we will see a leveling off next year, investors do have time to adjust and plan. If it does go down you put your rent up, it’s not a get in-get out, quick fix. It’s a long term wealth strategy,” says Sully.

“If you are concerned about the coming slow down, a safe, easy solution is purchasing properties that come with periods of rental guarantees. So no matter what happens with the price of the asset, you are still earning a positive yield every week.”

APFG Investment Options for Safe & Guaranteed Returns

• 25 Year Rental Guarantee - Liberty One by Bensons Property Group is an exclusive collection of 375 elegant inner-city apartments, overlooking Flemington Race Course in Footscray, minutes outside the Melbourne CBD. Currently, the project is offering a 25-year rental guarantee.
• 8% Guaranteed Return with Bensons Investment Fund - Bensons Property Group offers an opportunity for their projects (Chevron One and Liberty One) that earns guaranteed 8% returns during the build phase
• 1.0% Owner-Occupier Rate - Pay off your current mortgage faster with the lowest investor rate on the market.
  
  Contact the team at APFG for more information on our investment properties that also include high demand House & Land and Co-Living developments.