A new report by ANZ and CoreLogic has found that there is an undersupply of rental accommodation and increase in renters which is deteriorating affordability across the country. This has also been compounded by the increase in interest rates, inflation, migration and the Covid crisis. The report also found that income required to cover your rental payments is at the highest level since 2014 with approximately 30.8 per cent of income required to service a new lease nationally for a median income household.

The heightened economic uncertainty and increase in interest rates has seen a sharp decline in Sales of properties and an increase in renters seeking accommodation. This is evident in the sharp decline of rental listings of almost 38.1 per cent compared to the previous decade average.

This means the conditions are ideal for investors and this is evident as ABS lending data has shown that there has been an increase in investment borrowing in the months of February & March. Smart investors know this is the best time to jump into the market for the following reason

Key Takeaways

• With increase in interest rates house prices have either declined or flattened. This phase will not last long and therefore it is a good time to jump in and secure an investment property
• Interest rates are high but when you buy an investment property interest rates should not concern you to much as this is tax deductible and also the mortgage repayment is mainly covered by the rental income
• Rents are at an all time high and indications are they will continue to increase due to increased migration and shortage of housing. Which means you will get a higher return on your investment
• If you are in a position to buy a property then securing that investment means you’ll be better positioned when the market changes.
• Focus on the Asset – Long as you buy the right property in a good location with a high rental yield you will have a good investment.

Best of luck with your investment journey. When you are ready, feel free to call Praful on 0431 068 125 for a FREE Property Investment Strategy Session.