Deciding to buy an investment property is a big move, especially in today’s uncertain market.
However, if you’re in the right financial position, now could be a smart time to make that investment.
Here’s why.
Interest rates and market expectations
Interest rates are a crucial factor for any investor to consider. While they’re currently on the higher side, there’s a consensus among market commentators that they’ve probably peaked and we might see a decrease in the latter half of 2024.
This anticipated drop in interest rates is expected to fuel property price growth across Australia’s capital cities with:
Supply and demand dynamics
Another factor supporting the market’s strength is the ongoing imbalance between housing supply and demand.
Despite a recent increase in listing activity, the supply of homes for sale remains strained.
For example, while PropTrack reports that January was the busiest start of the new year for new listings in Sydney since 2011, the total number of properties listed for sale was still about 10% below the decade’s average.
In cities like Brisbane, Adelaide and Perth, the shortfall is even more pronounced, with the total number of properties advertised for sale down more than 40% relative to the prior-decade average.
But while supply is low, demand remains extremely high, fuelled by rapid population growth that’s seen our country add more than 600,000 people over the year to June 2023, according to the Australian Bureau of Statistics.
As most new arrivals rent rather than buy, the Australian rental market continues to tighten, with the national vacancy rate dropping to an all-time low of 0.7% in February, according to Domain.
Limited supply has increased competition among renters, pushing rents up with CoreLogic reporting that national rents grew 0.9% in February, marking the highest monthly jump since March 2023.
Why this suits investors
Let’s break down why all these factors make it a prime time for property investors.
Investing in property now could be a smart move, but it’s important to think about your own financial situation and do your homework before jumping in. An expert mortgage broker, like Shore Financial, can help with this.
Looking to buy an investment property? Shore Financial can help. To discuss your scenario, call us on 1300 416 700, email us on info@shorefinancial.com.au or fill in this online form.