Have you been considering buying your first investment property in 2023?
You’re not alone – many prospective buyers have been hesitant to take the plunge due to all the changes in the market. But whether or not now is the right time for you to buy an investment property depends on your individual financial situation and goals.
There are a few big positives to consider, however. Low interest rates, fast-appreciating prices, and easier access to lending could all combine to make 2023 a great year for investing in property. These elements may just be enough to tip you into taking the plunge – so why not do some research and find out if it’s right for you?
The drop in housing prices may be stabilising
With housing prices beginning to stabilise, now could be the perfect time for first-time investors to take advantage of lower property prices.
According to CoreLogic, the national decline in February was only -0.14%, the smallest they’ve seen since May last year. This follows consecutive cash rate increases by the RBA and a drop in property values over several months.
Research director Tim Lawless credited this trend towards stabilisation with consistently low advertised supply levels and an increase in auction clearance rates. He said that this “loss of momentum has been evident since September last year,” providing a potential window for those looking to invest in property.
Now could be a great opportunity for first-time investors – so why not check into the market further, and find out if buying an investment property is right for you?
Rents are on the rise
Migration has once again become a major factor in the property market, and it’s driving rental demand to historic highs.
The most recent data shows that rents surged to an all-time high of 10.2% last year. According to CoreLogic, the median weekly rent for dwellings rose to $555 in February 2021 – an increase from $500 12 months ago.
At the same time, rental vacancy rates have also dropped. According to SQM Research, the national vacancy rate fell to just 0.8 per cent – a record low!
If you’re looking for a property investment opportunity then there’s no better time than now. With such strong demand for rentals, investors may find properties with attractive yields and a steady cash flow – making it a lucrative venture indeed!
We may be over the worst of the cash rate hikes
After a decade of consecutive interest rate rises, the Reserve Bank of Australia (RBA) appears to have put an end to monetary policy hikes. This shift was signaled by RBA Governor Philip Lowe, who stated that they are ‘closer to the point where it will be appropriate to pause interest rate increases’.
The decision largely comes down to assessing the incoming economic data and making an educated guess on how it’ll impact the economy in the months ahead. While there’s no crystal ball when it comes to these sorts of predictions, experts believe that a majority of RBA cash rate hikes may already be behind us.
For those looking for mortgage relief or hoping to invest in property soon – keep a careful eye on any changes in monetary policy and make sure you’re prepared. With some smart planning and research, you might just come out ahead!
Potentially less competition
With the current economic and property market uncertainty, many potential home buyers are taking a wait-and-see approach. But according to the latest figures from Australian Bureau of Statistics, this increased caution is having an effect on housing loan commitments.
In January 2023 loan commitments for owner-occupier housing fell 4.9% to $14.7 billion – 35.1% lower than in January 2022 – while investor housing dropped 6% to $7.4 billion and was also 34.8% lower than the same period last year.
This reduced appetite for finance may mean that there’s less buyer competition out there, so if you’re already looking at buying a property then now might be an ideal time to take advantage of these relatively low interest rates and decreased competition!
Ready to get started?
If you’re considering taking the plunge and investing in property, there are plenty of factors to consider. But right now, all the right elements are in place for astute property investors to take advantage of an opportune moment.
To find out if a property investment is the right choice for you, why not get in touch? We can explain your borrowing capacity and provide bespoke loan options tailored to your individual needs.
With our help, you can make the most of this potential opportunity – so don’t hesitate and reach out today!
