There is no doubt the Australian residential property market is softening: rates of growth are falling, the time it takes to sell a property is increasing and the level of vendor discounting is rising.
During a market downturn properties become vulnerable to price falls due to the low level of demand in the market. With fewer buyers around, stock can build up, creating an oversupply situation. The buyers that are active have a lot more time to make a purchase decision and they have significantly more leverage in their negotiations.
If you're looking for investments that are likely to weather market volatility, read the latest issue of Your Investment Property magazine where Tim Lawless, RP Data national research director, reveals where to find these property safe havens.
"Just like the sharemarket has 'blue chip' stocks which are largely protected from any sustained downturn, the property market has 'blue chip' locations that will generally provide a safe haven from any sustained market downturn," Lawless said.
According to Lawless, these 'safe havens' are typified by:
1. Proximity to water - seaside, lakeside or riverside, being close to a body of water is one of the best attributes for driving growth.
2. Inner-city 'precinct' suburbs - areas that are well known for their cafes, bars or shopping will remain popular choices among buyers. These 'trendy' areas are appealing to a broad cross-section of the marketplace and also attract strong rental markets.
3. Metro acreage - properties on large blocks of land that are also within convenient commuting distance to the city are always going to be in demand. With higher densities being established within the inner areas of most capital cities, properties on large blocks of land will become increasingly scarce.
4. Properties with views - views of the city skyline, water views or valley views set a property apart from those without views.
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