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Don’t let your equity go to waste
equity

With each passing week, it becomes clearer that property markets are on the move. Some of them never stood still!

After a short-lived fallow patch last year, capital city and some major regional markets are experiencing property price pressures as competition heats up for the undersupply of listings currently available for sale with our overseas migration program also running hot. 

Even in a higher interest rate environment, there are plenty of homebuyers and investors out there purchasing property with many of them using the solid levels of equity in their homes to make it happen.

Positive data

First, though, let’s take a look at some of the very latest facts and figures from CoreLogic to get a better understanding of where markets are positioned at present.  

  • National home values rose 1% in the three months to April. This marks the first quarterly lift in home values since May last year.
  • The combined capital cities dwelling market value rose 0.7% in the month of April, following a 0.8% lift in March. This takes dwelling values 1.4% higher from a trough in February this year.
  • The amount of time it takes to sell property is starting to pivot. Median days on market nationally is down to 33 in the three months to April. This has fallen from 37 days in the three months to February.
  • At the median level, vendors are now offering less of a discount on their property across the combined capital cities market. The median vendor discount across the combined capital cities has eased from -4.35% in the September quarter of 2022, to -3.88% in the three months to April 2023.
  • At the national level, there were 137,629 listings observed over the four weeks to 7 May 023. Total listings are still markedly lower than the previous five-year average due to the relatively low volume of new selling decisions.
  • Annual growth in rent values held steady on the previous month, at 10.1%. Across the combined capital cities, rent values rose 11.7% in the past 12 months, which was the highest annual increase on record.

The portion of home sales that took place in regional Australia comprised an estimated 37.0% of home sales in the three months to April. This is down from a peak of 42.3% in the three months to September 2020, but remains above the decade average of 35.3%.

Time to make your move?

For anyone who purchased a sound and well-located property prior to the pandemic, you are probably sitting pretty when it comes to capital growth, given property prices continue to be significantly above the level they were back then.

For those people who have purchased in the years leading up to the pandemic, this likely means you may have significant equity that can help you increase your portfolio and your future financial position.

Millennials and Gen Xers aged in their mid-30s and 40s who may have been homeowners for a few years now are the prime candidates to make their equity work harder for them. 

That’s because they are likely in the prime income earning period of their lives, plus they also have plenty of time in front of them to let the magic of compounding capital growth happen. 

Just imagine if you purchased one or even two investment properties while you were still in your 30s or 40s? What could your financial future look like?

As I often talk about, it is time in the market that really matters, not futilely trying to time the market and often ending up doing nothing at all.

Market metrics remain overwhelmingly positive given we have been seeing green shoots of price growth since February this year – even when many doomsday merchants forecast a market bust because of the higher interest rate environment.

Unfortunately, many property buyers stayed on the sidelines last year in particular because of such alarmist predictions.

Now, that the bad news has turned good, it’s vital that anyone considering a property purchase doesn’t find themselves looking back with regret next year when they had the opportunity, and the means, to do something now.   

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