Historically, real estate is one of the most stable asset classes to invest in. Everyone needs a place to live, and as the world’s population grows, there is increasing demand for housing.
This can be offset in part by building new houses, but in countries where the net migration is inward-bound (such as Australia), demand often outstrips supply. And when there is more demand than supply, people compete for what little supply there is, thus driving up prices.
Add to that the fact that buying a place to live can be an emotional decision. Many buyers are willing to pay a premium for their dream home, further driving up prices.
In addition, current mortgage interest rates are at historical lows, and the Reserve Bank has indicated that they will stay that way for some time in order to boost the economy. This makes borrowing easier, and makes real estate investment an increasingly achievable goal for many.
So, Why Land Options?
We like to think of land – and anything on that land, such as buildings or crops - as ‘Real’ property. And real property (or indeed, real estate) is where valuable investment opportunities can be found.
Ultimately, with greater demand than supply, emotional buying decisions in some sectors of the market, and generally favourable investment conditions, there is a perfect storm of factors that will drive property prices up over time. In our experience, the highest capital growth in property assets is in land value.
Why? Simply, the laws of supply and demand state that when something is scarce, or fixed in supply, and demand is high, prices go up.
Population growth, immigration, and the trend in households getting smaller while the desire for more space increases, all combine to generate high demand in property. And of course, land is fixed in supply – after all, they aren’t making any more of it!
But doesn’t that price me out of the property market?
The short answer is no. The long answer is – no, not if you choose your investments wisely.
By investing in land options, you can buy into a land development at a lower cost, and watch your investments grow each year. Over time, you can develop the land (build on it) and sell or rent, or simply sell the land. Both options will generate profit in the medium (5-10 year) term.
Our 8-point strategy for determining the risk and reward for any land development gives you the confidence that you are making the right decision and growing your wealth.
We will help you navigate the property market, and secure you an investment portfolio underpinned by sound, evidence-based advice to secure your future prosperity.