4 Reasons to consider investing in property now

Are you considering investing in property but feeling unsure about whether now is the right time?

With all the changes happening in the market, it’s understandable to feel cautious. However, there are some compelling reasons to consider taking the plunge. 

The drop in housing prices may be stabilising 

Firstly, the drop in housing prices may be stabilizing, which presents an excellent opportunity for first-time investors to take advantage of lower property prices.

Property values have been falling for several months following consecutive cash rate increases by the Reserve Bank of Australia (RBA). But recently there have been signs the decline in property prices could be easing. 

According to CoreLogic, the national decline was only -0.14% in February – the smallest monthly fall since May last year. 

CoreLogic’s research director, Tim Lawless, said the stabilisation in housing values over the month coincided with consistently low advertised supply levels and a rise in auction clearance rates. 

“This trend towards a below average flow of new listings has been evident since September last year, coinciding with a loss of momentum in the rate of value decline.” 

Rents are on the rise 

Migration has returned with a bang. With increased demand rents are on the rise, with demand for rental properties outstripping supply in many markets.

Last year saw rents surge to a record high of 10.2%, reaching a median of $555 per week, while rental vacancy rates hit record lows in February, with just 0.8% of rental properties vacant.

If you’re in a position to invest, you may be able to take advantage of the current conditions and find a property with an attractive rental yield. Imagine what you could do with that extra cash flow. 

We may be over the worst of the cash rate hikes 

While nobody has a crystal ball when it comes to monetary policy, some experts believe that the majority of cash rate hikes may be behind us and there may be some relief on the horizon. 

RBA Governor Philip Lowe did indicate recently that the board was considering a pause after 10 consecutive interest rate rises, but the timing would depend on incoming economic data. 

“We also discussed that, with monetary policy now in restrictive territory, we are closer to the point where it will be appropriate to pause interest rate increases to allow more time to assess the state of the economy,” he said. 

“At what point it will be appropriate to pause will be determined by the data and our assessment of the outlook.” 

Potentially less competition 

With all the uncertainty about where interest rates and property prices will go, it has seen many potential buyers stuck in a watch and wait situation. 

We are seeing theis reflected in the seasonally adjusted data as January 2023 saw the value of new loan commitments for total housing fall to 5.3% to $22.1 billion, after a fall of 4.3% in December. This is 35% lower than same time last year. 

Owner-occupier data showed a fall of 4.9% to $14.7 billion, which compared to a year ago was 35.1% lower. Meanwhile, for investor housing, the drop was 6% to $7.4 billion, which is 34.8% lower compared to a year ago. 

With a lower appetite for finance it shows a clear indication that there’s less buyer competition, so you may have a better chance of scoring the property you want.  

Ready to get started? 

Ultimately, whether or not you should invest in property right now depends on your individual circumstances.

If you decide to take the plunge, talk we can assist in determining your borrowing capacity and find an appropriate investment loan to suit your needs.

With all the right essentials in place, now could be an opportune time to invest in property. Get in touch today to learn more.

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