Buyer's Agents | Property Investors | Home Buyers | Adviseable

Don’t leave your investment plans hanging for another year
Don't leave your investment plans hanging another year

As we head into the final days of the financial year, something quite interesting has been happening.

You see, there has been an uptick in enquiry from people keen to start, or continue, their property investment journeys because the end of the fin year is looming.

Thankfully, most of them recognise that strategic property investment is not something that can happen at the drop of a hat – and especially not when stock levels are as constrained as they are at present.

However, many seem quite surprised that 30 June was almost upon them, and they hadn’t progressed their property investment plans at all.

Some people may have been waiting for some clarity on where interest rates have been heading and before they knew it several months – and plenty of property price growth – had occurred while they did so.

Much of this enquiry has been from first-time property investors who have known for a while they wanted to expand their financial possibilities but hadn’t done much about it… until now.

Rising prices

While it is always a good time to invest in property in my learned experience, it is common for us humans to procrastinate, especially when there are often myriad moving parts in property markets.

If we look back at this time last year, the cash rate set by the Reserve Bank of Australia was 4.10 per cent, with only one more rate rise occurring in November last year – an increase that many commentators believe was unnecessary – with the cash rate currently sitting at 4.35 per cent.

Likewise, this time last year, the quarterly Consumer Price Index was at six per cent, but that figure has since fallen dramatically to 3.6 per cent, which is within reach of the RBA’s two to three per cent target band with cash rate reductions set to start in coming months according to commentators.

So, as these numbers show, inflation has reduced drastically over the past year, but the cash rate has been mostly static.  That said, the home loan interest rates on offer are generally lower now than they were last year with the peak of the current rising interest rate cycle now believed to have passed.

But here’s the thing: as property investors waited and watched for these indicators to materialise, something much more pronounced was happening in the background.

What I’m talking about here is property price growth in an environment of high interest rates and cost of living challenges.

According to the CoreLogic Home Value Index, dwelling values in Sydney have increased 6.4 per cent over the past year, and increased 14.9 per cent in Adelaide, 15.6 per cent in Brisbane, and 23.1 per cent in Perth over the same period.

Of course, with such strong dwelling value rises over the past year, this means that property prices are tens of thousands of dollars higher now than they were this time last year.

What this fundamentally means is that property investors who decided to make their move at the start of this financial year have achieved stellar capital growth, rising weekly rents, and stable mortgage repayments over the past year.

However, there remains ample opportunity in many markets around the nation, with many of our first-time and repeat property investor clients securing properties with buying budgets of between $550,000 to $650,000 that also offer upside capital growth potential and favourable yields.

So, if you’ve been pondering property investment for a while, there is literally no time like the present to progress your plans – otherwise this time next year, you might be chasing your tail with property prices even higher than they are today. And I will be writing exactly the same blog again 😉

Image credit: Freepik

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