With interest rates for cash in bank still low and inflation high, the worst thing you can do is keep you cash in the bank. If you are getting 2% interest on your cash in bank but inflation is at 6% you are losing 4% purchasing power each year. A property receiving 4-6% rental returns situated in an area that’s expecting price growth because of great fundamentals is a preferential scenario!
National home prices are continuing to rise. Even the experts do not know when the bottom or the top of the market occurs. What I do know is as at Dec 2023 there is a huge undersupply of homes in Australia at the same time that there is unprecedented demand and the highest overseas migration we have ever experienced making the housing crisis worse. Added to this is the fact that the cost to build is increasing. The banks and economists have all predicted rises in home prices in 2024 so it may be wise to get into the market as soon as you can to take advantage of this perfect storm driving home prices.
All four big banks have suggested that interest rates will likely start to fall sometime in 2024. There is a lot of uneducated investors waiting to “time” the market rather than “have time” in the market. These investors will all rush the market when inflation is under control and interest rates have steadied or fallen at a time when we have extremely low buildings approval numbers and the lowest vacancy rates I have ever seen. This high demand will drive prices up. Panvest Property believes now is the time to buy if you want to purchase at the best prices and beat the hordes who will drive prices up (helping to build your wealth).
With 200,000 Migrants destined for our shores each year over the next 5 years, where will they live? What will they do to rental prices and purchase prices? Panvest Property believes that with 1M migrants over coming over the next 5 years that it will put an even greater upward strain on home prices and rental vacancy rates. Good if you are already landlord.
With upward pressure on building costs caused by inflation Panvest Property believes it will be more expensive to build over the next two years than if you purchased at today’s prices. Look at the prices we are now paying in the supermarket and for energy as an example. Locking in today’s prices could be a wise move.
Panvest Property believes that high migration combined with already high housing demand, low vacancy rates and low build approvals will put upward pressure on housing prices. The housing crisis will not be fixed anytime soon and to take advantage of all these factors coming together, buying a new investment property would take advantage of the pressure building on house prices and rentals.
DISCLAIMER – ANY INFORMATION ABOVE IS GENERAL IN NATURE AND DOES NOT ACCOUNT FOR YOUR PERSONAL FINANCES OR CIRCUMSTANCES. PROFESSIONAL ADVICE SHOULD BE SOUGHT FROM AN INDEPENDENT TAXATION OR FINANCIAL ADVISOR. PANVEST PROPERTY ARE NOT TAXATION OR FINANCIAL ADVISORS, BUT CAN REFER YOU TO INDEPENDENT TAXATION & FINANCIAL ADVISORS.
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