There have been many reasons why investors have been delaying in buying property in Australia, but now is the time to get buying. The market has been slowing for the last few years, and if you have been trying to sell a property, you will know that there are fewer investors around willing to part with their cash. Historically big profits are available to those willing to take the plunge when the market is uncertain and now is one of those times. Here are our top reasons to start investing in property today.
Property Price Dip
The average cost of buying a house in Australia always increases over time. The goal is to make your purchase when there is a dip in the market. The last significant fall in property prices occurred during the global financial crisis ten years ago, but we have now seen a drop in house prices across the country, making it the right time to purchase. The price drops won’t last forever, and they are expected to start increasing again in the next year. An increase of a few percent can make a dramatic difference to the amount of equity you have in the property, so buying when prices are lowest is highly beneficial. All of the capital cities have had price drops in recent months, and year on year only Hobart and Adelaide had an increase, and this was only marginal. Sydney and Melbourne both had significant price drops compared to last year’s data, with Sydney’s price change, reaching double figures. Don’t wait for the market to rebound before purchasing as you will lose out on some great deals that are available.
Lowest Interest Rates
Along with low property prices, you will also gain from the low-interest rates offered by lenders. The Reserve Bank of Australia now has the lowest interest rates on record at 1.25%, which is substantially lower than the high of 17.50% back in 1990. The low interest rates are passed on to property investors, and insights from the popular lender comparison site Lendi shows that 22% of customers with NAB were on a 3.79% rate. Interest rates will rise again in the coming years, meaning now is the time to get a fixed rate loan on a property.
A Buyer’s Market
There was a time when going to view a property involved competing with hundreds of potential buyers, this, however, has changed, and it has become a buyer’s market. The Australian Prudential Regulation Authority (APRA) has cracked down on lending to big property investors, and this has led to more homes being available to owner-occupied investors. With less competition in the market, you can find it easier to negotiate prices to get the best deal for you. You still need to do thorough investigations and look at what similar properties have sold for and use this as leverage to negotiate a better price.
Future Forecast
The current property price dip will not last forever, and it is expected that property prices will increase later in the year or early next year. Trying to wait for the bottom of the price crash may mean you lose out and will need to pay a higher price for a property. There are a few factors which will encourage the market to rebound, including first-time buyer schemes, more relaxed lending regulations, and the low interest rates on offer. News outlet ABC reports that the Sydney housing market will bounce back into positive territory by the end of this year, and many think the same is true for the rest of the country.
Now is the Time to Act
Many would be buyers are procrastinating and waiting for all the signals to be right as they try to predict the bottoming out of the housing market. The biggest losers will be the ones who wait too long, trying to predict an unpredictable market. The property market will start to pick up again soon, and you should seriously think about getting onboard before it is too late. Those who bought during the global financial crisis are now laughing as they made huge profits while the rest of the market stood and watched, unsure about when to buy.
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