Is now the time to invest in property?

February 07, 2018 by Rebecca Crommelin

Is this the year I should start investing in property? Or am I too late?

At Mortgage Choice Joondalup, our team get asked these two questions a lot.

Australians have always had a weakness for property, and over the years, property has proven to be one of the safest and advantageous assets you could invest in.

But, with the property prices stagnating across some markets, many Australians believe the time to invest has now passed.

However, this is not at all the case. In fact, it is still a great time to invest.

With interest rates remaining at record lows, the cost of borrowing continues to stay at affordable levels. In addition, most experts believe that interest rates will continue to stay low for the near future.

So wait, how do we know that interest rates will stay low for longer? That’s a good question.

The Australian economy is performing well during this time of extended rate stability – which the Reserve Bank of Australia is very aware of.

Since August 2016, interest rates have been kept on hold. During this period, there has been an increase in consumer sentiment and business conditions. In addition, the Australian property market has begun to regulate itself across most markets.

Even though these lower interest rates caused a crazy spike in activity in some areas – particularly Sydney and Melbourne – property price growth has begun to slow down in these areas.

Nationwide, property price growth was reasonably quiet during 2017, which simply proves that the low rate environment is not artificially stimulating the Australian property market.

Recent CoreLogic data showed that property values increased 4.2% across the country throughout 2017. Even though this growth isn’t as strong as we have seen previously, it’s still quite good growth. Better yet, when property prices start to simmer down, it allows you to take advantage by purchasing a great property at a great price.

But if you are concerned that the cooling property market last year is a sign of things to come, and so now wouldn’t be a good time to purchase an investment property - don’t be.

The reality is that the property market is cyclical in nature. This means that it continues to go through ups and downs. So, if your game plan is to buy a property, keep it for a couple of years and then sell it for a profit – then you’re doing it all wrong.

As the old saying goes: successful property investment is not about when you sell, but for how long you keep it.

Simply put, the longer you hold onto your investment property, the more likely you are to see a greater return on your investment.

To be a successful property investor, here’s a few things you should do:

• Start researching: Review the historical sales and property data in your desired investment suburb areas. Find out what the average yearly rate of return would be for you.
• Stick with your property: Property investment isn’t designed to be a short-term strategy. Be prepared to hold onto your property for the longer term.
• Speak to your mortgage broker: When entering the investment game, it’s important to get the right advice for the specific type of mortgage you’ll need. So be sure to speak to an experienced professional.

If you’d like to look at your investment property options, give us a call at Mortgage Choice Joondalup on (08) 9485 0090 for a quick chat. We’ll research and compare your options to help you get in the investment game.