(June 2023 Blog) Is Now The Time To Buy An Investment Property?
Australia’s property markets appear to have turned a corner after CoreLogic’s national home price index lifted 1% in the three months to April.
That’s the first quarterly rise in home values since May last year and comes despite 11 cash rate increases from the Reserve Bank of Australia.
Other promising signs include:
Strong auction markets, with the combined capital city auction clearance rate recently hitting 75.9%, well above, the level generally considered a sign of a growing market
Properties selling faster, with the median days on market dropping from 37 days in the three months to February to 33 in the three months to April
This positive momentum hasn’t gone unnoticed.
For instance, Westpac’s chief economist Bill Evans recently declared the downturn “largely over” driven by increased migration, surging construction costs, and low market supply.
As a result, Mr Evans now expects nationwide property prices to hold flat in 2023 (up from a 7% drop) with growth of 5% pencilled in for next year (up from 2%) – as the table below shows.
“What’s more, this optimistic view is increasingly shared by the other major economists, with:
Commonwealth Bank forecasting prices nationally to rise by 3% this year,
ANZ expecting capital city prices to end the year unchanged from December 2022 levels, before tipping a modest rise in 2024
AMP Capital predicting national prices to hold flat in 2023, with 5% growth expected for next year
While it’s too early to tell if the market has bottomed out, keep in mind that Australian property remains a sound investment, regardless of market cycles, with national values rising 382% over the 30 years to July 2022, according to CoreLogic.
Should you join them?
Well, all the indicators suggest a growing window of opportunity for property investors with vacancy rates in many capital city rental markets close to or at record lows in April, according to Domain.
But while supply is weak, rental demand is high.
That, in turn, has seen Australia's capital cities record the strongest annual rental increase in history with prices up 11.7% in the year to April, according to CoreLogic.
But headwinds remain, particularly as the full impact of the RBA’s rate rises has yet to be felt.
That said, there’s no ‘right’ or ‘wrong’ time to jump into the market. Rather, buy when your circumstances allow, regardless of market conditions.
That’s because property investment is a long game – with values increasing by a stunning 382% over the 30 years to July 2022, according to CoreLogic.
So, if you buy a quality property in a quality location and hold it for the long term, history suggests you'll be richly rewarded.
Looking to buy a quality investment property? As an expert buyer’s agent, A Game Property Advisory can help you secure a quality property at a good price. Get in touch with Jim by calling 0422 446 170 or emailing jim@agameadvisory.com.au.