Eview Group

Is now the time to buy an investment property?

Talking about the property market is one of Australia’s favourite national pastimes, and this year there’s been a lot of this discussion including some very mixed messages about whether values are expected to fall, rise, or hold steady.

If you’ve been considering dipping your toe into the property market waters, it prompts a range of questions, with one of the biggest being: is now the time to buy an investment property?

Well let’s take a little tour of exactly what’s going on…

The lending market

Right now, Australia is enjoying its lowest interest rates in history. The cash rate currently sits at 0.25 per cent and the Reserve Bank of Australia isn’t looking to increase this until the economy is well and truly back on its feet.

In the interim, the banks are proving very competitive when it comes to passing on low rates. There are currently mortgages available from 1.89 per cent for owner occupiers, and investor rates aren’t that far behind.

In the meantime, the Australian Government has just announced it is looking to relax the lending criteria that the banks use to assess loan applications.

The aim is to free up access to credit to spur on the economy, and the upshot is it will soon be easier to get a loan during a period when interest rates are highly affordable.

Will property values rise or fall?

Answering this question is a little like gazing into a crystal ball, but history may offer a little guidance. To date, property values have held steady, despite a raft of Covid-19 headlines predicting the opposite.

CoreLogic data indicates that as of August 31, all capital cities other than Perth are recording higher house values than they did at the same time last year.

And let’s not forget the property market tends to work in cycles, but at the end of each cycle, property values emerge higher. That’s why bricks and mortar is consistently seen as stable investment for the long term.

Rental values

Rental values have fallen over the past quarter in many capital cities, with Sydney and Melbourne among the hardest hit, especially when it comes to units.

On the flipside, this fall really depends on where the property is located, it comes off the back of recent rental highs and many regional areas are actually experiencing a tighter rental market and rising rental values.

The key takeaway is, it’s a matter of doing your due diligence when it comes to what type of investment property you’re looking to buy, and the suburb where it’s located. You can learn more about what to look for in an investment property here.

The final word

If you’re looking to invest in property, now could indeed be a good time to buy. But the key things to assess include the location of the property, the type of tenant it will attract, and your own personal financial situation and goals.

In the meantime, if you’re looking to buy an investment property or seeking to rent the one you own, why not chat with one of our friendly Eview Group agent’s to understand the options available.