Have you been patiently waiting, wondering whether or not to purchase your 1st investment property in 2023?

You’re not alone. Many buyers have been shocked, what with all the changes in the market.
Whether or not now is the right time to buy really depends on your financial situation and objectives, but there are certainly some convincing reasons to at least think about it. Your 1st Street Melbourne Mortgage Broker can discuss these with you.

The drop in housing prices may be stabilising

As a first-time investor, your 1st Street Melbourne Mortgage Broker may be able to help you to take advantage of property prices.
Property values have been declining for several months following consecutive cash rate increases by the Reserve Bank of Australia (RBA). But lately there have been signs the decrease in property prices could be easing.
According to CoreLogic, the national decline was only -0.14% in February – the least monthly fall since May last year.
CoreLogic’s research director, Tim Lawless, said the steadying in housing values over the month corresponded with regularly low advertised supply levels and a rise in auction clearance rates.
“This trend towards a below average flow of new listings has been evident since September last year, coinciding with a loss of momentum in the rate of value decline.”

Rents are on the rise

Migration has resumed with a bang. Demand for rental properties is exceeding supply in many markets and rents are going through the roof.
Last year we observed rents rise to a record high of 10.2%, getting a median of $555 per week.
Meanwhile, rental vacancy rates hit record lows in February. Nationally, just 0.8 per cent of rental properties were vacant.
If you’re in a position to invest, you may benefit from the current conditions and find a property with an attractive rental yield. Imagine what you could do with that extra cash flow.

We may be over the worst of the cash rate hikes

While nobody has a crystal ball when it comes to monetary policy, some experts think that the majority of cash rate hikes may be behind us. 

RBA Governor Philip Lowe did indicate recently that the board was contemplating a pause after 10 consecutive interest rate rises, but the timing would rely on incoming economic data. 

“We also discussed that, with monetary policy now in restrictive territory, we are closer to the point where it will be appropriate to pause interest rate increases to allow more time to assess the state of the economy,” he said. 

“At what point it will be appropriate to pause will be determined by the data and our assessment of the outlook.” 

Potentially less competition

With all the hesitation about where interest rates and property prices will go, many buyers are waiting and watching. 

In January 2023 in seasonally modified terms, the value of new loan commitments for total housing dropped 5.3% to $22.1 billion, after a reduction of 4.3% in December. It was 35% lower compared to a year ago. 

For owner-occupier housing, it fell 4.9% to $14.7 billion, which was 35.1% lower compared to a year ago. Meanwhile, for investor housing, it fell 6% to $7.4 billion and was 34.8% lower compared to a year ago. 

The decreased appetite for finance indicates there’s less buyer competition, so you may have an improved chance of getting the property you want.  

Ready to get started?

Whether or not you should invest in property at the moment comes down to your individual situation, but one thing’s for sure – all the right essentials are in place for opportunistic property investors.
If you do choose it’s right for you, talk to your 1st Street Melbourne Mortgage Broker about your finance options. We’ll go over your borrowing capacity and line you up with the appropriate investment loan to suit your needs.
Get in touch with your 1st Street Melbourne Mortgage Broker today.