If you’re looking to invest in Australian property, you’re probably wondering if it’s a good time. The short answer is yes.
The Australian property market is on an upward trend. It will continue to stabilize throughout this year, despite earlier worrying predictions that it’ll crash. Now it is likely that the housing market could move back into positive territory early next year. Australian real estate investment has been so successful in the past year that it is often referred to as one of the better ways to grow your wealth. As Australia is home to numerous significant regional areas, property investors have many options when choosing an investment.
If you are wondering about the future of Australia’s housing market, we’ve got your back. So why should you invest in Australian property? There are four reasons why investing in the Australian property market might be the best move of your life:
Property prices are on track to increase
Are you ready for prices to go up again? In the Australian property market, it’s not just about how much you can afford but also when you can afford it.
The Australian property market has experienced a significant boom in recent years, with prices increasing by an average of 6.5% per year between 2010 and 2023. It is expected to continue for the next few years as supply increases and demand remains strong.
Property prices have been growing faster than wages for some time now. So, it will soon be more challenging for people to save enough money for a deposit to buy a house or apartment.
After we finally farewelled lockdowns and movement restrictions, property experts believe prices will start climbing again. This is because international investors will re-ignite the market after they’re finally allowed back into Australia. The total effect of this adjustment won’t be felt for a while. Sellers and home builders won’t realize they missed their chance in the post-pandemic real estate market until 2023 or 2024.
RBA predicts interest rates will fall
Even though the Reserve Bank of Australia predicted that interest rates would rise at least three per cent by the end of this year, they are on the road to decline in 2023. Now is the right time to buy if you’ve been looking to get into the property market. When there’s high demand for houses, property prices rise. And it is even higher if you’re looking for a specific property type such as apartments or townhouses.
Plus, lenders are starting to account for interest rate hikes and implementing buffer requirements on borrowers’ income and financial position. That means if you have a mortgage with a lower interest rate, you can stay competitive and outbid others in the market who are trying to purchase higher-priced properties.
Auction clearance rates continue to bounce back
The Australian property market is one of the most popular investment options in the world. With a high quality of life, stable economy, and low-interest rates, it’s no wonder that people want to invest in Australia.
While many other factors can affect a property’s value, one of the most important factors is how quickly it sells at auction. If an auction clearance rate is low, this may indicate potential problems with the property itself or how it has been marketed.
In recent weeks, auction clearance rates have been bouncing back after several years of decline. In fact, they have increased by 15% over the last five years. This shows that even with a sluggish economy and high unemployment rates in somearts of Australia, investors still find ways to make money on their properties!
The market has been on a tear lately due to the pandemic. However, auctions are still strong, and the buyers are out there. Many overseas buyers are looking for a piece of the pie.
And if you’re looking for a property around Australia, you can’t do better than going to an auction sale.
Australia’s solid rental returns
In Australia, the property market has been booming for more than a decade. This has led to strong rental returns for many investors.
The high rental results are due to Australian property markets being relatively affordable compared to their international counterparts. The average rental yield in Australia is around 3% in cities but higher in regional hotspots. This makes it an outstanding investment opportunity for many people.
Investors can get good returns by buying apartments in Sydney, Melbourne, and Canberra because they are among the best-performing cities in terms of property prices over the past few years. Investors can also consider investing in rural areas such as Devonport, Mulgoa, and Tamworth. Properties in these areas are more affordable but still have good rental yields compared with other cities across Australia.
In the past, the rental market was tough to crack. But now that’s changing. With tight rental vacancies and strong rental returns, you can afford to take the time to find your perfect tenant.
However, if you think this is just a typical boom and bust cycle in the local housing market, think again. The Australian economy grew at 4.3 per cent last quarter, the fastest pace since 2013, and unemployment is at the lowest level since the late 60s. While there may be some temporary dips along the way, this is shaping to be a great investment time in Australian property markets.
You’ve probably noticed that property prices in Australia are on their way up. Well, there’s no doubt that the best time to have bought into the market was a while ago, but don’t despair just yet. This still could be the opportunity to invest in Australian property and make a substantial profit.
If you’re considering buying a property, especially in Sydney, don’t take unnecessary extra risks and have your prospective property checked for defects and problems that include roof, rising damp, pest control, cracks and movement in the walls, etc. According to Pestworks Sydney pest control experts, termites can wreak havoc and destroy all wood in your newly acquired real estate investment. These pesky pests can reduce property value, wipe out a significant portion of your investment returns, and prevent you from walking away with a pretty penny.