The World Business

The Australian property market can be a lot tougher than the starry-eyed version pushed in the industry papers. It can be risky, and if you’re working on margins, it can be brutal, particularly now, when it’s treading water and prices are looking iffy. The fact is that recitals of market values moving up or down a few percentage points doesn’t mean anything, relative to debt. Professional property investment advice isn’t a luxury in this market, it’s a necessity. The tough side of the Australian property market Whether you’re investing in residential or commercial property, the Australian property market has a lot of potential minefields: Commercial properties: The market is based on very high rental rate values. Commercial rentals are big cashflow exercises. They’re also a very negative element in a highly sensitive market. Some commercial properties are absolute bombs, quite useless for retail purposes. There are dead commercial spots all over Sydney suburbs. These aren’t good deals, they’re good ways of losing money in large amounts. Wholesale commercial properties and industrial: Arguably better, but still not exactly a sure bet, the wholesale and commercial properties are also highly dependent on individual circumstances. Some properties are definitely hot, others are undeniably not. Residential properties: The residential properties are highly charged. Market values are reactive, and it’s a stop/start market. This is a very high volume capital market, and it’s fair to say that while it does produce excellent returns during its seasons, it’s really not a “gimme” market at the moment. Upmarket properties can sit on the market for ages. Rental properties: The rental market is hyperactive, and it can get messy. There’s a shortage of rental properties in the cities, high rents and also a lot of resistance created by high rents. The mainstream rental property market is best in the mid range rentals and less impressive at the lower and upper ends. This is an often litigious and sometimes nasty market, and losses are not unknown. Getting the advice you need When you bear in mind you can be sinking a lot of money into these often messy markets, it’s a good idea to get your facts straight. You need reliable professional investment property advice, not purely because it’s industry best practice, but because it’s a highly mobile, erratic market, and current property-specific information is critical. Market research and property research are basic requirements in any form of major investment. The basic requirements for investment in a touchy market are checking facts. This type of investment can be risky, and it means a major capital commitment in any event. Professional advice and guidance includes technical assistance with acquisitions and managing sales. The fact is that not all property investors become millionaires. Property investment is a real business, and failure isn’t unknown. Successful investors in the Australian property market are themselves expert professionals. Talented as they are, they learned from experts. Professional advice is the real difference between success and failure in this market.

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