Debbie Shankar - 26 Sep, 2016

Property Investment Tips for Savvy Buyers

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The Spring selling season is favourable for property investment if investors take advantage of the slower market. Less demand means lower purchasing prices. Therefore, investors could grab themselves a bargain. This approach will put them one-step in front of their competition.

However, buyers viewing the slower market as a time to wait, are making a mistake say real estate experts. Despite strong growth rates declining across the Australian property market, these drops are not to be mistaken for a market downturn. In fact, many property investment advisers suggest the slowdown is merely a property price adjustment. This market correction comes after stronger than anticipated housing price growth peaked in 2015.

Growth rates in many city areas 12 to 18-months ago were extremely high. At this time, investors were buying anything and everything because interest rates were low. Then the Australia Prudential Regulation Authority (APRA) set new regulations. Lenders also raised investor interest rates. These factors slowed down the rate of property buying for owner-occupiers and investors. Now the market is in a period of adjustment.

Are Property Investors Procrastinating?

According to property investment experts, many property investors are taking ‘the wait and see’ approach. This strategy may see them paying far more for their property than those who take advantage of the market slowdown. Financial advisers suggest that there is a lot of procrastination going on. While investors are researching the market, they are waiting as they feel there is no urgency to buy. Consequently, the investor who waits may miss a golden opportunity.

Though an investor who has done their due diligence and is savvy, may place themselves ahead of the investment pack. Property investment needs to be timed well for you to save more, suggest financial advisers. You do not want to be buying when there is a feeding frenzy. So, rather than waiting, if you are in a good financial position, then consider buying now. Take advantage of these opportunities, before the market changes. Sure prices may fall further, but if you wait, say another three months, then the competition may also be stronger. Stronger competition will then lead to a higher price due to demand.

Where are the Best Investment Opportunities?

Data suggests that Brisbane, Melbourne and Sydney will remain strong. Prices in these capitals will be higher than in other capital city markets. Most financial advisers say they believe there will be marginal price correction in these cities. There is also expected to be a great deal of choice for property investors.

Furthermore, many markets will be flooded with apartments over the next 12 to 24-months, according to data. A vast number of investors know that high volumes will flood the market. This oversupply could reduce the capital value of these properties to below off-the-plan prices. Plus, the glut of apartments will make it harder for an investor to fetch a premium rental price. So the property investor who conducts detailed research will find bargains. This investor will also find micro-markets within larger markets that are drawcards for tenants, which may lead to stronger capital gains.

The key to sound property investment, of any kind, is as follows:

Research the market: Always look at sales data to see what is selling and where it’s selling. Most of all, look at sales prices over the last month and up to 3-months. Do not look at last year’s data, as the market is constantly changing.

Find a popular location: Ideal locations are overlooking parks and near recreational areas. Property that has views is also desirable. These factors will reduce vacancy rates.

Look for the unusual: Properties that have unique features will always be more sought after. So, look for an investment that stands out and is not the average. This approach will encourage more potential tenants to view the property when it’s vacant.

Are you considering property investment? Do you want to discuss your options with a professional? Then it’s time to contact eChoice and find the right home loan for YOU today.

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