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Date Published : Monday, January 28, 2008
Property investments are, traditionally, some of the most secure savings funds in the market. However, with the recent slowdown in house prices, will that statement continue to be true through 2008.
Recently, share prices have dropped like a stone - approximately 24 per cent in the last two weeks - affecting the value of properties across Australia. Those using property as an investment have been hit hard.
John Beveridge, property expert at the Herald Sun, stated that the home loans and fluctuating interest rates will have a big impact on a number of Australian homeowners.
"Housing loans are getting tougher to get as the more conservative major banks take back market share from the non-bank lenders.
"Rising interest rates will further deter buyers, who will want lower prices to get them over the line."
The reasons to put savings or spare money into property are very compelling as sensible investments in property have many attractions. Property can be less volatile than shares - though not always - and it tends to be regarded as a safe haven when other assets are declining in value. A downturn will reverse in the long run.
It has the potential to generate capital growth - an increase in the value of your asset - as well as rental income.
However, as with any investment, there are no guarantees. Property prices go down, as well as up. As with most things, it's a waiting game. Despite the hard hits taken in recent weeks, property venture are generally a sound investment for the future.
Australian savings accounts compared and reviewed.
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