Will My Investment Property Value Always Increase?

Many property investors wonder whether or not their investment property value will always go up. You have a lot riding on your investment property, so you want to know that your decision will pay off in the long term.

The answer to this question, however, is more complex than a simple ‘yes’ or ‘no’ response. There are several factors that influence the value of an investment property, and market trends can be an unpredictable force to reckon with. Thankfully, Property Club is committed to giving our members the advice and insight needed to make informed decisions about their futures in property investing. Here are some key things to keep in mind when considering whether or not your investment property will increase in value over time.

Market Value Trends Are Not Linear

Any given property market value does not rise or fall on a regular, reliable basis each month or year. You cannot accurately predict how much your investment property will fall or rise in value over a 12-month period based on past trends. While you can look at the last year, 5 years, or decade to form a vague impression of where a market is heading, there will be several miniature trends within that timeframe that will dramatically affect the price of a property.

Over a 10-year period, it isn’t uncommon for a local property market to go up and down. Your investment property’s value will likely go through the following trend over a number of years:

• It will decline in value for a while
• It will plateau in value for a period of time
• It will quickly grow in value in a short period

Investing in property really is an investment for the long-term.

Location, Location, Location

The location of your investment property will have a significant effect on its value. Some markets around Australia have historically been stronger than others, while some markets are currently experiencing unprecedented boosts.

In the last year, the Adelaide property market has become one of the fastest-growing in the country. With house prices increasing by 24.8% throughout 2021, and a number of exciting new property developments driving demand, Adelaide has positioned itself as a city to watch for potential investment portfolio expansions.

By contrast, a city like Sydney has seen its property market plateau over the past two years – largely due to the effects of the pandemic. However, with Covid-19 restrictions easing, the market is expected to bounce back to a stronger position.

Investing in Property is a Long-term Commitment

Investing in property is no get-rich-quick scheme, as it takes planning and patience to truly reap its rewards. The value of your property is always going to increase more and more the longer you are its owner, even if there are occasional dips in value from factors such as interest-rate hikes.

You can look at the annual and monthly growth rate changes for each property market, but at the end of the day, if you are committed to putting in years of your time, money. and energy into your investment portfolio, then you are guaranteed to walk away in a better place than where you started.

Being a successful property investor is not about timing the market, but time in the market.

Become a Property Club Member

If you are wanting to learn more about investment property values and how they may affect your investment plans, join Property Club today. Our club has the people and resources to help you build the investment portfolio of your dreams.

Sign on as a member today by contacting our team at enquiries@propertyclub.com.au.