The Reserve Bank of Australia is raising interest rates because of inflation and a tight labour market. This is making it difficult for people to afford homes. The housing market has slowed because people are losing confidence in the economy and can’t afford to buy homes.
In Sydney and Melbourne, housing values are dropping a little. Property values are still increasing slowly in Brisbane, Adelaide and Perth. This has made many people worry about a housing market crash.
But even with all these problems, our housing market has many good things.
- The number of new listings in Sydney and Melbourne has risen steadily in recent weeks, decreasing the pressure on the market.
- The value of your property is likely to go up when the economy recovers, which most analysts expect to happen by 2024.
- The most recent CoreLogic leading indicators do not suggest any sign of people panic selling their homes.
- Even though monthly sales volumes may be easing, they are still above the average for the last 10 years.
Great Opportunities For Investors
Experts think increasing rental yields will make it more attractive for investors to buy property. The tight rental markets and improving yields will help keep demand for investment properties strong. At the same time, buying conditions are getting better and it is becoming a more favourable time for investors to buy more property.
- The rate of house price growth has slowed and rents have increased faster.
- Tenants are looking for affordable homes, so the demand for medium-to-high-density housing is increasing.
The trend in rising rents is evident across each of the capital cities and broad rest-of-state markets. Rental markets are extremely tight, with vacancy rates around 1% or lower across many parts of Australia. This would be an excellent opportunity for an investor to enter the market.
Learn more about investing in property
When investing in a property, it is essential to be well informed. The following pages on our website will help you understand many areas of property investment better.
- Principal and Interest Vs Interest Only: Which is a better mortgage strategy?
- Depreciation for an investment property
- Inheriting a property
- Investment property documents for tax
- Joint ownership of an investment property
- Offset accounts for investment loans
- PAYG income tax withholding variation
- Turning your home into an investment
- What is capital gains tax?
The Cost Of Property And Renting Will Eventually Normalise
We will likely see a reversal of the trend towards renting smaller households as people try to maximise their savings by sharing rental costs. Whether or not this will help trigger a reduction in housing interest rates is still unknown.
Housing affordability will improve as housing values keep falling in the near future as well. This might make first-home buyers more active as the market shifts to favour buyers.
Should I Invest In Property Now?
In the short term, agents and vendors must be realistic about market conditions. This means they should be willing to adjust their prices and invest in strong marketing campaigns. Property buyers, investors and developers should look closely at their opportunities to move on any options they might have before the market changes again.
Home Loan Experts’ mortgage brokers will be with you to guide you, whether you need help applying for an investment property loan or understanding the property market for investment. Call us on 1300 889 743 or enquire online today.