Most claims of hotspots end up being bland-spots. Genuine ‘booms’ only come around once in a while. But, that won’t stop people constantly spruiking about the next hotspot.
Maintaining a steady supply of new housing is vital to keep up with population increases, household formation rates, and to avoid the price spikes that occur when demand outstrips supply. Residential construction also creates much-needed jobs.
When the commentary becomes relentlessly bullish and you hear the words “It’s different this time” or the more pompous “It’s a new paradigm” then it will be time to head for the exits or reduce debt. In the meantime, the wall of worry is distinctly good news.
The buyer frenzy is starting to dissipate after a continued rise in property values, though a recent increase in stock hitting the market has provided a more even balance to buying prospects. In such times it is customary to see clearance rates fall as a by-product of supply being greater than demand.
For Chinese nationals, this latest announcement means that leaving cash sitting in a bank account today is a negative wealth creation strategy. And with the local property market far from an attractive proposition, many people in the country’s vast middle class are looking further afield for places to invest.
Capital is cheap and buyers are spoilt for choice so it appears to be favouring those who are choosing to move.
The RBA has taken the sensible move to check more local and international data before tweaking the monetary policy levers again.
It is probably just too early and they won’t want to be boosting bank profits as there is no guarantee now that they would follow the RBA.
Buyers crave ease when searching for property and are seeking as much information as possible when considering a property purchase—a price, position and the next available viewing time.
If the government does not participate in the controls and oversight of the profession then the potential for detriment exists.
One of my biggest tips would be to find a mortgage broker with plenty of experience with first home buyers.
Rental growth is particularly important for mature investors who are looking to purchase high yielding rental properties that will help fund their retirement.
As well as increasing interest rates, lenders are also reviewing their credit policies to ensure lending standards are maintained. This may mean you need to do more work and provide more documentation to obtain a loan approval.
With inflation under control and a moderating housing market, home buyers can expect a stable outlook with the possibility of a further rate interest rate cut.
The truly astute property investors don’t have the blinkers on and they recognise that 8 million Australians elect to live and work in alternative locations to capital cities.