Does property always increase in value?

Hi, I’m Glenn Sharp from Sharp Accounting and welcome to our ‘Ask Sharpy’ videos.

Does property always go up in value?

The common misconception is that property only ever increases in value.

It doesn’t always go up in value. All we’ve got to do is go back to the GFC period to see the most recent examples of property decline. 

If you went to places in Queensland especially, when there was a lot of speculation on property prices. Property prices halved in some areas! Property definitely does not always go up in value. 

People have this idea that, I bought my property 10 years ago, I sold it for double what I paid for it so it must just continue on a straight line. 

When in actual fact, property like any investment has times when it goes up and down.

Similar to a share marketing but with less volatility. Because you’re not checking the prices of that property every single day, you’re not going out and getting evaluation on your property other than when you are ready to sell. People don’t see the fluctuations in the market. 

Short answer, no property doesn’t always go up. 

Long answer, over a long period of time it tends to increase in value. 

Is property a sound investment?

Like any investment, it needs to be as part of a reasonable business or a financial plan.

So if you want to increase your wealth it can be an effective tool to do so. But as always seek some advice and make sure it is the right investment and the right time to invest for you and your own personal circumstances. 

Sharp Accounting is a local accounting firm in Ballarat. Sharp Accounting nurture business growth by adding value through collaboration and shared knowledge.