 Rents have increased in most capital cities over the past year and are likely to continue rising throughout 2024, according to a leading property data expert. Between the December quarters of 2022 and 2023, the median rent on realestate.com.au rose 11.5%. That included double-digit gains in Perth (20.0%), Melbourne (18.3%), Sydney (16.7%) and Adelaide (12.5%), as well as increases in Brisbane (9.1%) and Darwin (1.7%). By contrast, rents stagnated in Canberra (0.0%) and declined in Hobart (-4.8%). During the same period, the vacancy rate fell from 1.3% to just 1.1%. With rents growing and vacancies falling, this is potentially a good time to be a property investor.  PropTrack's director of economic research, Cameron Kusher, forecast that the “tough rental market conditions” would continue.
“We expect supply to remain tight and demand to stay strong, likely pushing rents higher,” he said. “Lending to investors trended higher over 2023, indicating that investors are returning to the housing market. However, many investors continued to sell, resulting in a relatively small pool of rental properties being available for the large number of people seeking accommodation. The rapid increase in Australia’s population exacerbated rental market challenges, as most people migrating to Australia become renters.”  A significant number of borrowers are unclear about lender’s mortgage insurance (LMI), according to a recent survey of mortgage brokers by LMI provider Helia.
The survey found that 85% of broker respondents think LMI can benefit buyers who want to get into the market earlier, while 70% believe it can also help renters who want to transition into ownership. However, 50% of respondents feel borrowers generally don't properly understand LMI. LMI is a form of insurance that protects the lender in case the borrower defaults on the mortgage and the lender can't recover the loan from selling the home. The premium varies, depending on the size, type and location of the property. Lenders generally insist borrowers take out LMI if they want to buy a property with less than a 20% deposit – although, for some professions, such as doctors and lawyers, it’s possible to buy a property with a smaller deposit without paying LMI. The upside to using LMI is you can enter the market with a smaller deposit; the downside is the cost. I’d be happy to discuss both the potential benefits and costs, so you can make an informed decision about whether LMI is right for your personal situation.  There's been a significant increase in first home buyer activity over the past year, based on the latest data from the Australian Bureau of Statistics. There were a total of 9,491 owner-occupier first home buyer mortgages issued across Australia in December 2023, which was 12.9% higher than the year before. First home buyer activity rose in six of the eight states and territories, with Queensland and Tasmania being the exceptions to the rule.  While it can be challenging to buy your first home, this data shows it’s not impossible. Here are four tips to get on the property ladder:
Six things every woman should know about their financial success on International Women’s Day Planning to succeed is integral, you don’t need to be buying a property to speak with a mortgage broker, it could be part of your plan in years to come, and they can be part of your success planning Knowing where your money goes each month, is integral… there are so many cheap, or free money management tools out there, so start tracking, work out where you can improve your cash flow, and move faster towards your savings / investment / home ownership goals The impact of maternity leave on your retirement strategy in years to come can be enormous. Thinking about how you might counter this impact, through additional super contributions, a more aggressive debt reduction, or savings plan, or having an agreement with your partner that during that time away from the workforce you will supplement your super with additional contributions to not leave you behind in later years, is important to forward plan for. Delegating our chores around the home, so you can focus on your work, career and family, and remain hyper focussed on the things you value, is key where you have big goals - contrary to popular belief, you don’t need to do it all! Assuming you cannot buy a home, without consulting a mortgage broker, would be a big mistake. There are a lot of misconceptions in the community, and asking questions, will help you get to where you want to go faster. Having boundaries to ensure your body, and mind are as best as you can be, is integral to success. Remember, you have to put your face mask on first, before you can help anyone else, and you need to be in the right place, to be a great boss, staff member, parent or friend. Running yourself into the ground, never helped anyone!  Many economists believe the Reserve Bank will start cutting interest rates in the final quarter of 2024. So if you're thinking about entering the market, should you buy now or wait for those potential rate cuts to occur? To answer that question, it can be helpful to consult long-term data. During the decade to January 2024, Australia's median property rose 80.1%, according to PropTrack. Prices rose faster in the combined regions than the combined capital cities (92.5% vs 75.7%), while house growth exceeded unit growth (89.4% v 44.4%). But the general trend for all these categories was the same – up. Domain's chief of research & economics, Nicola Powell, believes buyers should take a longer-term view and not get too hung up about how the market is currently performing.  “When you’re purchasing a property, it’s for a long-term investment and you are going to ride multiple property cycles, and that’s how you build financial wealth. So if I would give any advice, it would be to buy when it’s right for you. Housing markets are complex and often impossible to predict.”
Ultimately, the question or whether to buy now depends on your personal situation and goals. For some, now will be the right time; for others, it will be better to wait. I'm happy to have a chat and crunch some numbers for you, so I can present personalised loan options for your situation. |