Understanding the benefits of indirect property investment

The COVID-19 pandemic has created a global economic narrative that continues to be flooded with messages of uncertainty, unprecedented times, and challenges, compounded with inevitable cascading economic effects worldwide.  Just how lasting this storm will be, or when the economy will rebound, which it inevitably will, is yet to be determined.   

However, amidst the economic speculation, the predictions, and the sudden worldwide spike in demand for insulating-underground bunkers, there is a sector that continues to stand alone as an asset class, which has historically delivered a strong and relatively stable return during such times, and that’s property.  

Anchored to a real asset and providing a greater sense of security for investors, the tangibility of property investment, while not immune to volatility, does give a degree of resilience during the impact of economic turbulence, making it a clear winner and investment of choice during these times.  

For retirees and investors with self-managed super funds, property investment has always presented as a viable long-term wealth creation strategy (with retirees today having weathered many a storm).   Spanning the generations, Australians have maintained a seasoned affinity with property, proving itself time and time again, as a sector with a strong bounce back. 

In these times, property presents as an opportunity for those seeking to batten the hatches in a wealth protection pursuit.  Compared to other investment options, property offers investors the opportunity to diversify their investment portfolios, minimise capital risks as much as possible, and provide a level of stability and opportunity for wealth preservation.  Wealth preservation is imperative for retirees to maintain independence, quality of lifestyle, and enable plentiful occasions with loved ones – just as it should be during these years ahead.

The Australian residential property market is worth an estimated $7.2 trillion and expected to grow to meet increasing supply demands, including, but not limited to, the increasing population; and, the push to promote long-standing, independent living.  We see a significant and exciting shift in property development, including:

  • the building (and rebuilding) of homes designed with increased sustainable considerations such as renewable microgrids to reduce energy costs
  • the adoption of innovation resulting in smarter homes
  • increased provision of improved accessible housing (for NDIS and essential workers)
  • increased provision of affordable housing.

Investment in property, either directly or indirectly via investment in a property fund, will continue to reign as an investment class known for its security and stability.  Above all, for the benefits it provides to investors.  

For retirees and investors with self-managed super funds, indirect investment in property ultimately removes the unnecessary hands-on management aspect of ownership.  Instead, it provides a beneficial interest in an asset that provides a regular, passive income stream from net rental yields, potential tax benefits, and exposure to capital growth potential.    

While a property’s value may fluctuate, in response to the current market conditions, investors need to remember that this is only a reflection of the temporary conditions spawned by COVID-19 and any fluctuation is less likely to reflect the intrinsic value of a property.  The fundamentals remain the same, and as such, property will again weather this storm and provide wealth protection opportunities for retirees and SMSF’s. 

Discover Avestix property investment opportunities

Avestix Group is an independent, privately-owned investment company based in Brisbane.  Avestix has two flagship investment funds established to provide sophisticated and experienced investors with impact led, sustainable and innovative investment growth opportunities to create long-term value, to protect and create wealth.  To find out more, visit avestix.com

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