December 21, 2022 UFinancial

Is now a good time to invest in real estate?

By Leigh Deledio.

It seems the seven consecutive official interest rate increases by the Reserve Bank of Australia haven’t curbed the appetite of property investors.

PropTrack’s most recent Property Market Outlook reported that lending to investors increased in the first half of 2022 and is expected to continue to climb over the
coming months.

Investor activity in the market is increasing for a few reasons. Here are some of them:

 

Record low rental tenancy vacancy rates

The current national rental tenancy vacancy rate is 0.96%, the lowest it has been since 2006, according to SQM Research. That means the chances of your investment property not being rented are very low.

 

Location flexibility

When it comes to property investment, you’re not looking for a place that matches your lifestyle. You’re probably thinking about which investment would improve your cash flow or give you the highest return. When purchasing an investment property, you’re free to explore it nationally.

 

It’s a buyers’ market

The latest PropTrack Listings Report released at the beginning of November showed that the total number of properties listed for sale was increasing in most parts of the country, giving buyers plenty of choices. Canberra and Hobart led the list with increases of 26.3% and 87%, respectively.

Higher interest rates have also affected buyer demand which means there is less competition from other buyers when making an offer.

 

Owner-occupied rates can be applied to investment loans

Because lenders view investment loans as riskier, the interest rates attached to them are usually higher.

To mitigate the impact of rising mortgage rates, some lenders are currently offering the option to get owner-occupied pricing on investment home loans by bundling both loans together. This means lower owner-occupied rates apply across the entire loan and it is available for both purchases and refinances. Note that terms and conditions will vary depending on your lender.

 

If you are considering investing in real estate, remember that doing your due diligence is an essential part of any investment.

 

Find out how much you can borrow

Understand how much you can borrow to buy an investment property in 60 seconds. Get started.

 

This article was published by My Coastal Home.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced, or republished without prior written consent.

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