With widespread reports on tighter bank lending, restrictions on property investors and the current property downturn, you’d be surprised to hear that now is a great time for investors to buy property. Despite uncertainties in the Australian market, the potential for property to generate long-term wealth remains positive. In our latest blog, Director of Murphy Jacobs Property Advocates, Paul Murphy, answers key questions on property investment, to reveal reasons why buying property right now still offers the potential for long-term wealth creation.
Are investors and first-timers buying property right now?
The majority of existing investors are already in the market and are aware of property downturns having lived through challenging market conditions before. With first-hand experience of the financial crisis and mining boom, investors have rebounded before and are confidant to rebound again. For first-time buyers, buying property is about adopting a long-term view of investment. Rather than placing importance on rent income, first time investors understand property as a high growth asset that will build wealth in the long-term. Potential buyers should keep in mind that buying property isn’t about the timing of the market – but instead spending time in the market.
Does Melbourne’s growing population impact investors buying property?
Strong population growth in Melbourne has been a key factor in its property performance for decades. With the real estate market not blind to the costs and expansion of high population growth, Melbourne is accommodating for its growth by building green and sustainable apartments, developing new estate areas in outer suburbs and renewing industrial areas around the CBD’s fringing suburbs. The growing population in Melbourne is placing high demand on rental properties, which is proving attractive to buyers. That said, Melbourne’s new Metro public transportation system continues to grow each year, providing new and current residents access to transport links in increasing numbers of residential areas.
Should I wait for interest rates to change before investing?
Only time will tell how an increase or cut to interest rates will affect Melbourne’s property climate. However, reflecting on the past 12 months, many economists and forecasters are doubtful that interest rates will change for some time. With unemployment rates recording at an all-time low, secure employment and adequate wages are strongly driving Australians to invest. Reports suggest that a third of households currently have no mortgage and a third of those with mortgages are more than two years ahead of their payments. As for first-home buyers, if house prices continue to fall, buyers are offered a real opportunity to enter the market. In November last year, the Bureau of Statistics recorded 10,500 first-home buyers had taken out a home loan – the highest number of first-home buyers in nine years. With first-time buyers becoming more willing to sit on property for the long-term, now is the perfect time to buy before interest rates change.
When it comes to buying property, investors should consider using a buyer’s agent for expert advice on entering the market. At Murphy Jacobs Property Advocacy, we present buyers with logic-based acquisition plans, to help buyers make informed investment decisions that go the distance. Find out more about how Murphy Jacobs Property Advocacy can support your next property purchase today.