The good: nationally, confidence returns
In the wake of the federal election, positive sentiment towards Australia’s property market has jumped. National housing finance figures have shown some markets with the most significant falls over the last 12 months have reached the bottom of the cycle and are on the way up.
The July ANZ/Property Council Survey saw a jump in confidence and sentiment around credit availability surged as expectations for economic growth turned positive.
The improving sentiment towards residential property is prompting developers to buy sites as they position for the next housing cycle. Savills director residential site sales Stuart Cox says there has been a ‘huge’ increase in inquiry by developers since the election.
The Sunshine Coast is a great place to invest
As a Sunshine Coast local, I think it is the best place in the world and it is easy for me to promote the area to interstate and overseas buyers.
The Sunshine Coast property market has outperformed many property markets across Australia in the last 12 months. This is due to significant and continued population and job growth on the Sunshine Coast from private and public funding.
Although we haven’t seen dramatic increases in property prices, there is a steady and continuing rise month to month.
The bad: challenges remain with borrowing
Following the Banking Royal Commission, which uncovered problems in lending policies of the banks, there have been regulatory changes that cap investor loans and tighter checks on borrowers. Expect scrutiny and extra paperwork as you apply for loans!
On a positive note, the Australian Prudential Regulation Authority (APRA) recently asked banks to relax lending rules. Most banks have made these changes, which means buyers’ borrowing capacity has increased.
This benefit to borrowers is also boosted by the recent reductions in mortgage rates, following two cuts to the official cash rate by the Reserve Bank.
For clients wanting to borrow funds to purchase a property in their Self-Manged Super Fund (SMSF) I strongly advise you to not proceed until you have the correct structure in place. I cannot highlight enough the importance of a team of experts (your MJJ accountant, legal firm) to stay within the tightening Australian taxation laws for borrowing within your SMSF.
The ugly: The availability and scarcity of quality stock is adding to the pressure
Recently there have been signs that point to a real recovery in national prices based on rising buyer demand in a low-volume market.
We have found that the rental market is very tight at the moment. For nearly all our clients who have bought this year, their property has been rented out on completion.
The first question you need to ask is, “what do I want to achieve?”
The best strategy for most investors is to accumulate assets in a growing portfolio of properties and shares.
Investing in property is not a ‘get rich quick’ scheme. People can get it wrong by buying with their heart rather than making a strategic investment decision.
This is why it is essential to gather a team of experts around you. I would encourage anyone thinking of buying property to have a conversation with your trusted advisors at MJJ Accounting and Business Solutions. Note: If you want access to the latest Location Reports for markets across Australia, please contact us at www.triplezeroproperty.com.au
By Danny Buxton