Housing Affordability The Best In 20 Years
According to the June 2019 Housing Industry Association Report, property is the most affordable in nearly two decades across Australia’s major cities due mainly to lower home prices and record low interest rates. The index takes into account a range of factors including wage growth. According to the HIA, for a home buyer with an average income purchasing an average priced property, mortgage repayments will consume the smallest part of their income in almost two decades.
However, this is likely little comfort for home owners and investors, particularly in Sydney and Melbourne. The RBA is cutting rates trying to stabilise a rapidly weakening economy that is already in a GDP per capita recession. There are other signs that households are genuinely struggling with over 650,000 households lodging their tax returns in the first week of the new financial year to receive the Coalition government’s $1080 tax cuts, with 50,000 returns lodged on the July 1 alone. This highlights how tight budgets are across the country, with reasonably tepid wage growth over the last decade eating into disposable incomes.
Nevertheless, those with good credit profiles and enough disposable income to service loans will find banks willing to lend at record low rates and the opportunity to pick up properties in Sydney and Melbourne for ten to fifteen percent lower than a couple of years ago. Investors in high quality suburbs are also focusing on maximising their cash flows given the relatively low yields on offer in other assets, which means ensuring that they have a property manager focused on reducing vacancies and maximising the incoming rent.
If you’d like to discuss how Certainty Property and our property management team can help you get the most out of your investment property, feel free to give us a call on 1300 577 298 or send an email to firstname.lastname@example.org