It is time to get up and do something! It is time to think about buying that new car, go on an Australian holiday or buy a new house or investment property. Do something for yourself and you will be starting to do something for your country. If you are a small business owner, get creative, get some more work and get some more staff. If you are just starting out, now is the perfect time to borrow money – it is as cheap as it will be in a generation.
Now is not the time to hibernate! Anyone with any equity in their own home should be thinking about an investment property. Those of you who are first home buyers wondering if you can really afford to buy, remember that a nice home in an estate suburb might cost you $350,000, the interest of which could be as low as $300 p.w. You cannot rent for that figure in the same area.
Everyone can take pot shots at our government. And whilst the message is not clearly being put out by Canberra, the correct thoughts are there. We need to stimulate the economy without being reckless. This is exactly what anyone thinking about their own future should do. If everyone who has been paying down debt over the past 4 years spends some of their accumulated wealth, then everyone benefits. When houses are purchased, and it doesn’t need to be new, people also spend money on white goods, on paint, on garden tools, even the new letter box! This in turn increases turnover in the retail industry, which in turn increases turnover in local manufacturing which means all of these sectors need to increase the labour force. More tax is paid by workers and less people take handouts who are on the dole!
IT IS AN ABSOLUTE WIN – WIN.
This is starting to happen already in the property market. There is no question that buyer interest has jumped to levels not seen since 2007. Already the market in the $400k – $800k has started to lift. This is traditionally the “Mum and Dad” investor market. $200k equity in the family home equates to most banks lending $500k for an investment property without straining the Loan to Value Ratios that make banks nervous. There is no real shortage of stock at these levels, and reasonable growth can be expected with very good yields. Many properties in this range should be revenue neutral even when borrowing the full amount of the purchase price plus on-costs.
At the other end of the market, there is a distinct lack of stock. Asking around many of the agents through Boroondara and Stonington, the over $2M range of prestige homes that are currently on the market have had open for inspections bulging at the seams. There are many people out looking for these homes and not many on the market yet. Whilst I believe the very top end market will be more driven by the rising and falling stock market, currently there seems to be many people looking in this sector.
Overall this is a very good sign for our economy. Whilst we are being told there are woeful problems with our economy, the message should say “There will be woeful times for our economy – IF WE DO NOTHING” This is the part of the message that is not getting through loud and clear. If everyone gets out and spends money we, as a nation, will do very well. Our housing sector employs a large portion of the workforce. And its growth helps many other sectors grow as well. Buying property will help secure your own financial future and it will help to lift Australia’s economy as well.
If you are considering a property purchase, whether it be an investment or a home to live, please give our team a call and we can have a chat. There are some excellent opportunities in the market place at the moment. We can talk to you about different options that would suit your financial plan.
Ian James
Director
JPP Buyer Advocates
