CoreLogic’s Home Value Index showed a fall in Sydney dwelling values of 1.2% in January, as the average price for homes in the city plummeted below $1 million for the first time since March 2021.
Interest rates are rising, increasing borrowing costs and making homes harder to afford for many, despite lower home values. Most people are waiting on the sidelines because of inflation and the concerns of a potential recession. If you can cope with the bigger repayments for a few years, then buying in a falling market can be beneficial in the future. Keep reading to find out why you should take advantage of lower prices of homes now.
Why Is 2023 A Good Time To Buy Home In Sydney?
If your income is secure and you have the means, then this is a good time to step into the property market in Sydney, while others are sitting on the sidelines. Here are a few of the factors that make now a great time to buy.
The market is declining slowly, so there is a window to make a buying decision, but many analysts expect the bottom to arrive later this year.
Prices are “expected to bottom around the September quarter, ahead of gains late in the year, as the RBA moves toward rate cuts,” AMP Capital chief economist Shane Oliver said.
A strategic investor will use this window of opportunity before the Sydney market picks up again. You can invest now with a lower deposit and take better advantage of capital gains and good rental income.
Fewer Buyers, Less Competition
Sydney had the largest quarterly drop in sales among capital cities over the past three months relative to the same period last year, -40.6%. This decline in housing demand has lessened the competition in the market. Consecutive cash rate rises and reduced borrowing capacity have steered buyers towards units, creating an opportunity for homebuyers and long-term investors to target houses.
While searching for houses, buyers should negotiate on price if the property has been in the market for a while. You should check comparable sales for the past two to six months to ensure that vendor prices have been adjusted for the declining market.
Rise In Demand For Rental Properties
With international borders opening, Sydney will receive the majority of residents, both skilled immigrants and overseas students. The solid overseas migration will escalate the demand for rental homes, which is a good sign for investors looking for rental income. Sydney rents had the steepest annual growth among capital cities in 2022. Unit rents in the city jumped 18.6% and reached an average of $575 a week; meanwhile, Sydney house rents grew 12.1% and reached a $650-a-week average.
The Sydney property market has continued to fetch good prices, especially in some sought-after locations. Expats returning to Australia from around the world are expected to provide a boost this year.
An investment in property at the right time can deliver a long-term capital gain, along with ongoing rental income. You will, however, be taking on significant debt to buy an investment property. It is a big financial commitment that you must carefully consider, and it would be wise to get the advice of a qualified professional.
We Are Here To Help!
If you have decided to step into the property market, then we at Home Loan Experts are here to help you. Our expert mortgage brokers specialise in investment loans and will assist you in finding a home loan that best suits your requirements. They will guide you throughout the process, whether you are just getting started investing in property or looking to refinance for a more competitive rate, we’ll be there with you. Call us on 1300 889 743 or enquire for free online today.