With record low interest rates and stalling property prices, the time to buy in Melbourne is now.
During the GFC in 2010 many buyers held off, expecting the market to bottom out…it didn’t happen. When market slumps occur it can often feel like prices will keep heading south and that there is plenty of time to wait and watch but, as the GFC showed us, things always turn around and head north again — a case of what goes down, must go up.
According to Victorian government data, the projected growth of the population from now until 2051 is expected to be more than double the growth between 1971 and 2011, to a forecast 8 million residents. Depressed property prices combined with a booming population presents a huge opportunity for both owner/occupiers and those seeking capital gains from long term property investment.
Get some advice
If you are unfamiliar with Melbourne or unsure where the best buying can be found, ask those in the know. 21st century Melbourne property managers, should be more than just leasing agents; they will supply advice and tips on how to pinpoint the ideal property for your budget and will work with you to gain the most out of every dollar.
For investors, finding an exceptional managing agent can be one of the most advantageous relationships you can forge to ensure a successful investment outcome. The best agents will utilise technology such as phone Apps to streamline communication, provide real-time property valuation tools and sales tracking, as well as give transparency to financial data such as rental payments.
Invest in the best
Melbourne’s blue-chip property areas are a prime opportunity for those who have the cash or can get their hands on some. Prices in some of these suburbs have dropped close to $500,000 — in five years time it is likely that there will be a lot of people kicking themselves that they didn’t grab the brass ring when it was in reach…. Consider suburbs close to the city which have seen substantial price drops such as St.Kilda and Brunswick or those along the coast such as Mordialloc.
Prepare yourself
Interest rates may be at an all time low in Australia but tightened lending criteria is proving frustrating for many potential buyers. The correlation between mortgage lending and property price growth is real. This creates an opportunity for those buyers who have all their documentation ducks in a row. Potential borrowers will need to adjust to the more stringent lending strictures but once approved they will have front row seats to a buyers market.
Change in the wind
If the Shorten government gains power in the upcoming election, and negative gearing is axed, two things can be expected to happen:
- Investors will raise rents to recoup the difference
- Less property investment will mean less stock which will translate to higher rental prices.
Negative gearing was put in place so the private sector could provide affordable housing to low income earners and those unable to buy for whatever reason. Take it away and the burden will return to the government to take up the slack. The scenario doesn’t bode well for low income earners who may already be spending close to half their income on rent.
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Between cheaper property prices and expected higher yields, this may be the time to dip one’s proverbial toe into the property market. Melbourne has some beautiful, historic areas close to the city, and leafy suburban streets a little further out — it will always be an attractive place to live, so grab your piece of it while you still can!
