Newspaper article Gympie Times, The Qld.

Taking the Market's Pulse

Newspaper article Gympie Times, The Qld.

Taking the Market's Pulse

Article excerpt

THE new cycle of growth on Australia's eastern seaboard has begun. Reality is, the best time to buy in places like Sydney would have been about six months ago. But by no means have buyers missed the boat -- there are still plenty of reasons to buy today. Here are some things to think about for specific buyers looking to invest, buy their first home, upgrade or downsize.

Investors

Not only are rents continually growing, we are also at a stage in the market cycle where there is real potential for good capital growth in the very near term. And all at a time when interest rates are incredibly low, enabling many investors to achieve positive cash flow -- or very close to it, from day one.

Don't have the money for a deposit? Banks are offering 95% LVR loans again and there's also the option to buy through self-managed super. Plenty of today's investors are taking this path -- in fact, there's been a 23% surge in the amount of money invested in residential property via SMSFs since 2011. One in 25 Australians now has a SMSF.

First Home Buyers

Since the removal of the $7,000 grants for established properties, first home buying has slumped to just 4% in NSW and 6% in QLD -- well below the long term average of 15%.

I really believe that some young people are missing the point. Today's low interest rates make property far more affordable than it was when the grants were around. Add to this, rents are rising at a time when it is actually cheaper to buy in a huge number of suburbs.

According to RP Data's latest Buy vs Rent report, there are 692 Australian suburbs where it is cheaper to buy than rent, based on a P & I variable loan of 5.4%. On a fixed P & I loan of 5.15%, this goes up to 864. Sydney and Brisbane both offer more than 70 cheaper suburbs.

Upgraders

The great news for upgraders is that the market is stronger at the bottom and tends to be weaker at the top, so upgraders have the opportunity to secure a great price for their current home then buy in at greater value for money further up the price scale. …

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