Staying Positive

Staying positive when it comes to property investment in the current market may seem impossible; but there is always a silver lining if you’re willing to look for it!  It was just over a year ago when we were commenting on how the price of building was at it’s lowest years.  As a result of COVID, shortages of labour and materials, coupled with increased demand brought on by the government grants, build prices now at their highest … and we can’t see them falling any time soon.  Most property investors, at this point, will retreat to the sidelines.  However, there are still ways that you can benefit from the current situation.

Let’s start with finding a suitable parcel of land.  The grants for new homes has seen both brown and greenfields developments turbo charged to bring them onto the market at record prices.  While the price of established homes has also risen, due to lack of supply, there are areas that are still more affordable.  Sites such as https://reiwa.com.au/the-wa-market/perth-suburbs-price-data/ will give you an idea of ‘in demand’ areas.  From there, it’s a little bit of detective work to find a suitable property, perhaps in the suburb next door, that still has room for growth.

When it comes to building your new investment property, even though the cost to build is rising, the value of the property on completion is also rising!  With net migration predicted to increase over the next 3 years (https://population.gov.au/docs/2021-22_budget_overview.pdf), it appears that supply will continue to be an issue, especially in such a tight rental market; making it an ideal opportunity for investors to start building now.

And while we may need more money to invest in property, the cost and conditions for borrowing remain favourable.  The big 4 banks are even advertising their investor loan products on the radio!  With borrowing costs and holding costs at their lowest rate in years and likely to remain that way for some time (https://www.rba.gov.au/media-releases/2021/mr-21-19.html), the opportunity to add positively geared properties to your portfolio is ripe.  As with every investment, the best way to stay positive now and into the future is to do your research, speak to your accountant and/or financial planner and plan the best way forward for your situation.