Falling shares make property the right choice for many investors

9 September, 2011

Falling shares make property the right choice for many investors


As financial markets around the world tumble, Australians are again returning to residential property, according to a leading Port Douglas real estate agent.

Raine & Horne Port Douglas principal Travis Schumacher said share market uncertainty was causing concern for many investors.

In the three months to 31 July, the ASX 300 was down by almost 8%, according to research from asset manager Mercer Investment Nominee.

“Recent share volatility is tipping the balance in favour of a property investment for many Australians, and there are good reasons for this,” Mr Schumacher said.

“For instance, the Australian Bureau of Statistics (ABS) tells us that around 24% of Australia’s 7.1 million households are rented – a fact that savvy investors are sure to know.”

But Mr Schumacher added that quality properties in prime, sought-after locations were also sound long-term investments.

“Research shows that residential property values can be expected to increase over the long term at an average annual rate of between 2% and 4% above inflation*,” Mr Schumacher said.

In comparison, Mercer research shows that the ASX 300 has increased by just 1.9% over the last five years.

Also, the Housing Industry of Australia (HIA) reports that Australia’s current housing shortage is in the vicinity of 109,000 dwellings, according to Mr Schumacher. Moreover its projected the shortage could reach 466,000 by 2020.

“The chronic nature of the housing shortage will underpin real estate prices long-term and drive rental returns for investors," Mr Shumacher said.

“In this climate of uncertainty and instability, investors are increasingly doubtful about the short to mid-term outlook for shares and are seriously contemplating investment in alternate asset classes where there is less volatility and risk.

“As a result, many self-funded retirees, self-managed superannuation funds and ‘mum and dad’ investors are returning to the relative safe haven of a property investment.”

For all your property needs contact Raine & Horne Port Douglas on (07) 4087 1800.

*Source: ipac securities

Raine & Horne is an iconic Australian property firm, with more than 360 offices worldwide. Also an established Superbrand along with Qantas, Vegemite, Woolworths and Myer, the company has four distinct property service brands including Raine & Horne Residential, Raine & Horne Commercial, Raine & Horne Rural and Raine & Horne Financial.

-ENDS-

For further media information contact:

Travis Schumacher, Principal Raine & Horne Port Douglas, 07 4087 1800 or 0438 119 188

Anna Truman, National Marketing & Communications Co-ordinator, 02 9258 5448