It was 2020. A client, who bought in a project called LaVida in Newstead, Brisbane in 2016 called me, telling me they wanted to sell. Their personal circumstances had changed and they were frustrated that their property hadn’t performed the way they thought it would.
I reminded them that markets are cyclical, and of the importance of holding their investment long-term – markets don’t grow at a fixed rate each year. I also reminded them that LaVida was delivered with amazing amenities and by one of Brisbane’s most reputable developers; Bekaa Group. At the time, Bekaa Group brought a new standard into the Brisbane market, a standard that was not usual, and at the time, wasn’t appreciated by the market and valuers, affected largely by a temporary decline in market sentiment.
I ran them through a holding cost analysis, showing them their property was actually positively geared, as its rental return had been around 5% from day one – returning more than their falling interest rates.
Thankfully, they listened and didn’t sell.
They bought the property in 2016
The property settled in early 2017 at the purchase price of $450,000
In 2020, the bank valued the property at $360,000
In October 2021, a similar property in the project sold for $510,000
This client conversation was not the only one I had over the past few years, and every time, I am reminded that investing in property is a long-term wealth strategy. The current climate of low interest rates makes this affordable, with investments not costing our clients anything to hold, with rental yield being higher than interest rates, and increasing demand, particularly in Queensland.
The reality is that your property might actually go backwards before it goes up, or it might go up before it goes back, or it might remain stagnant before it moves at all. For this reason, we always encourage our clients to hold their property long-term and we never promise that investing in property is a get rich, quick scheme.
One thing I can promise, is that any investment recommended by Blue Wealth is in an amazing location, and the quality is the best in that location.
I would like to wish you all a Merry Christmas and Happy New Year and remind you all that good property will always be in demand, regardless of what the market place is doing. Invest in good property and hold long term.