Capital growth is the increase in value of a property over time. Although rental yield and tax benefits are significant financial advantages of property investment, capital growth is generally the most significant financial reward. Capital growth not only provides a healthy profit when the property is sold, it also enables the owner to leverage against the increased value of the property to borrow money for further properties or other lifestyle choices such as a holiday or renovations.
Although it is sometimes possible to make money in a short time, generally to benefit from capital growth, a property should be kept for 5-10 years to experience a significant increase. Different types of property will experience different levels of capital growth and it is not uncommon for investors who buy 'off the plan' to experience an almost immediate increase in capital growth between paying their deposit and completion of the property.
There are certain characteristics of a property and location which are indicators for greater capital growth. We are expert researchers in all factors regarding investment property and capital growth, as well as making predictions about the next investment 'hot spot'.
Over the longer term, property in Australia has historically shown strong capital growth in all capital cities. RP Data's Tim Lawless reports that the average Sydney property has increased in value 12.2% since 2004. Increases over 2010 were 8.4% for Melbourne and 6.6% for Sydney. Capital growth is trending in an upward direction.
Economists are predicting modest capital growth gains for the remainder of 2011. In contrast, rental yield is set to increase over this period. It is a perfect time to buy property now at a great price, enjoy high rental yield now and experience strong capital growth in the future.
Speak with a ParkTrent professional today to realise your investment goals.
If you would like more information, please contact our Customer Service and Sales team on 1800 652 224 or email contact@parktrent.com.au
