Spread the love

In the last two consecutive months, we have seen a lot going on in the finance and banking sector, with the Reserve Bank continuing with rate cuts. now the lowest it has ever been at 1%. This is the rate the Reserve Bank lends money to the banks. It has dropped by 5%. If your banking institution passed this on in full, and with a $400,000 mortgage, it would give you savings of $2,000 per annum or $166 per month.

 

With the cash rate being so low and unlikely to increase anytime soon,  now is the time to review your lending requirements and make sure you are on a competitive rate. There are some amazing rates available for example, 2.99% fixed for 3 years principle and interest.

 

With low-interest rates and the economy slowing, monetary policy is to stimulate the economy and stop the slide in property prices in major cities such as Sydney and Melbourne. In Brisbane we have seen the property market flatten out, not really increasing or decreasing, making this a more affordable market to buy-in. On 15 July 2019, BIS Oxford Economics forecasted Brisbane would have a 20% increase over the next 3 years. Buying in the right suburbs and as close to the CBD as your budget will allow will give the greatest capital growth.

 

We have had some turbulent times in the last 6 months; the Banking Royal Commission, the federal election and the end of the financial year. This has impacted on the decision-making process and whether people move forward to purchase an owner-occupied or investment property. As we know, uncertainty makes us delay decisions and do nothing, thus leaving money in the bank or share portfolio which may not be the best investment strategy.

 

So is now the right time to be getting back into property? Yes, the property can bring good gains,  But, property selection is paramount and we are seeing a lot of duplexes/dual occupancy properties being requested by investors as an advanced strategy property purchase gives great returns or uplifts from the get-go.  Also, infill house and land lots with good townhouses close to the CBD are in higher demand than units or off the plan purchases.

 

With the amount of infrastructure development in Brisbane, Sunshine Coast and the south-east corner of Queensland, there is going to be some great capital gains for people looking to invest in property in 2019. The prediction of 20% growth over 3 years is good, but don’t delay as you might miss the boat. Once the statistics show the property is growing, the train has already left the station and you may have lost out on some of that initial capital growth. With yields for houses in the south-east corner about 5% and interest rates now in the 3%’s, we will see the market stimulated and property prices move upwards. Also, consider regional markets such as the Gold and Sunshine Coasts for great buying and investment returns.

 

Blue Wave Property Strategies can help you:

 

  • Review goals and help with a property strategy
  • Finance and loan restructuring
  • Assist find the right property for your needs and budget

 

Contact us now by emailing info@bluewaveproperty.com.au or call 0434 449 455, we would love to help.

 

Written by Chris Pullen Director of Blue Wave Property Strategies