"The home ownership aspiration is likely to be increasingly balanced against competing consumer priorities, like being close to work, social hubs and major amenities."
So buying investment properties near to such places would then be a good idea right…. If more people are going to opt to rent than to buy then the limited supply of places to rent means there will be increased demand for them.
Supply and demand….
So inner city investment properties sounds like a good plan.
Which brings up a good point. Places like Manhattan didn't experience the same kind of price deflation as other parts of the USA during the sub prime crisis. Why? I'm no expert but how about;
A) The people taking out sub prime loans and most at risk of default were not buying property in NYC.
B) Demand. Simple. People with money want to buy there.
Now I'm not saying that Australian cities are the same as Manhattan, but I'm in Sydney and there has always been a lot of demand for for people to live in the inner city here and unless something dramatically changes our geographical, political, lifestyle fundamentals then that will not change. Remember I'm talking about demand to live in the inner city. I'll leave it up to you whether that will translate into high property prices.
Remember where you buy is very important...
I'm sure I've heard that somewhere before, something about location...
Property prices will flatten off after this run, that is a certainty. They will probably drift back a bit in real terms over a couple of years. But after such a run that is ok. That said the market has surprisingly not faltered much during winter and if it runs again in Spring / Summer prices will be be getting very high and you might expect a pull back, but from a very high base. So there might be a few that over extend but not enough to cause mass panic, as long as they can still pay the mortgage most will be ok.
But unless we have major unemployment then I can't see 20% price drops from today's values. If we do have major unemployment then price drops in that realm are a near certainty along with a whole spate of other issues. Let's all hope that doesn't happen.
