Should you think about buying property interstate?
Just as each of Australia's eight states and territories have somewhat unique climates, populations and cultures, so too they have differing real estate markets. While NSW booms, perhaps Queensland is experiencing a downturn, or vice versa.
Due to various factors impacting the property markets in each state, whether they be down to industry, infrastructure or employment concerns, buying real estate close to your home may not always be the most shrewd move. That doesn't mean you should write off property investment altogether, however. With the assistance of a buyer's agent, interstate property investment is now easier than ever before.
Deciding you want to buy property outside of your home state is a big step.
Why buy interstate?
First and foremost, there are financial reasons for interstate real estate investment. As always when you are considering buying property – no matter where – doing your research is hugely important. Studying market forecasts from respected industry authorities is a great way to get some basic education on where each state's market is sitting, and give you some ideas about where you might like to make your next investment.
For example, QBE's recent Australian Housing Outlook 2015-18 predicts that while the Sydney market has been going through an intense growth period over the past several years, we are likely to see a peak in 2016 and the beginnings of a downturn in the two years following.
In Brisbane meanwhile, the growth over the past decade may have been more reserved than in Sydney, but it is expected to continue through 2018 and perhaps beyond. While there's no sure-fire answer as to where property markets will go, this educated prediction might be enough to make you think twice about buying in Sydney, and instead look at investment in Brisbane.
By bringing in the services of a trusted buyer's agent, acting as your representative in a city outside your own, you can be sure to keep abreast of any real estate opportunities without having to physically be there.
Local knowledge is essential
Deciding you want to buy property outside of your home state is a big step – and you'll want to know as much about whatever market you're looking at, as you would if you were buying close to home. It's all very well to decide you want to buy in another city, but just as there are variations in the property market nationally, each suburb can have different factors pushing house prices up or down.
Take Melbourne, for example. In May 2015, Domain.com.au listed the fastest growing parts of the Victorian capital, highlighting the large differences in growth that can occur from suburb to suburb. While the median unit price in Toorak reached $940,000 following a massive 36.2 per cent growth in the previous six months, the same timespan in Caulfield North only saw 9.4 per cent growth to $552,500. Still solid gains to be sure, but almost four times less than those seen in Toorak.
That's why having a buyer's agent fully immersed in your target market can really pay off. Not only will they be able to advise you on areas with the most potential for returns on your investment, their access to industry insiders and real estate agents also means they can keep ahead of the game, and sometimes even dig up off-market properties you may be interested in.
Having a buyer's agent fully immersed in your target market can really pay off.
In for the long haul
Buying interstate real estate is a long-term investment strategy. If and when you find a suitable property, you'll likely need to employ a property manager to keep everything in order for you, and save you the hassle of travelling to check up on your investment.
Building a relationship with a professional and experienced buyer's agent and investment property manager is a great move, and could lead to many years of profitable, rewarding real estate buying, no matter which state you call home.