Rateseeker July 2022 Property News Round-up

Rateseeker July 2022 Property News Round-up

With the current vacancy rate, market conditions are strongly favouring property investors, so if you’re looking to buy your next home now may be the time.

It’s also been revealed that buying is cheaper than renting, at least for 27% of homes. Despite the rapid interest rate increases, RBA Deputy Governor Michele Bullock believes Aussie households will cope and tips to plan ahead.

Along with this, Aussies are now building more homes than ever before, with a record 143,037 home builds starting in the year to march.

Missed the latest news? Check out the four latest updates in the property market over the last month below.

Property investors enjoying strong rental demands

According to the latest data at SQM Research, Australia has recorded a national vacancy rate of just 1.0%, meaning it’s a great time to be in property investment.

Over the last year, vacancy rates have fallen 0.7% from 1.7% to 1.0%. This means that for everyone 100 rental properties, there is only one vacancy.  Even more extraordinary is that the vacancy rate is even lower in six of the eight capital cities.

When vacancy rates are this low, finding quality tenants isn’t an issue due to high demand. In this type of landlord’s market, rental costs do rise from time to time, and tenants are willing to pay to ensure they have somewhere to live.

Thinking it might be the right time to get into property investment? Talk to us today, we can help you secure finance so when you’ve found the perfect home to add to your collection, you’ll face less buyer competition when it comes time to make the deal.

Buying is cheaper than renting in 27% of homes

Have you ever wondered if it would just be cheaper to buy instead of rent? Well, a new report from PropTrack has answered that question.

Data has revealed that It’s currently cheaper to buy 27% of homes in Australia, according to PropTrack, although the numbers vary significantly from state to state:

• Northern Territory = 98% of homes are cheaper to buy than rent
• Western Australia = 62%
• Queensland = 51%
• Tasmania = 41%
• South Australia = 34%
• ACT = 29%
• New South Wales = 9%
• Victoria = 7%
  

PropTrack’s analysis relied on a range of assumptions, including that buyers would pay stamp duty, put up a 20% deposit, pay a mortgage rate of 4.62%, experience capital growth of 3% per annum and hold the property for 10 years.

While PropTrack found that 27% of the overall housing stock is cheaper to buy than rent, buying turned out to be the cheaper option for 31.2% of three-bedroom houses and 52.6% of two-bedroom units.

Speak to us at Rateseeker today to find out if you’re in a good situation to consider buying your own home and becoming your own landlord. We’ll crunch the numbers for you.

How to manage your household budget in a land of rate rises

Interest rates may be rising, but Reserve Bank deputy governor Michele Bullock is confident most borrowers will be able to manage their bills and cope with the hikes.

Ms. Bullock also noted lending standards have increased in recent years, and that, to qualify for loans, borrowers had to prove they could pay “significantly higher” interest rates.

That said, with interest rates almost certain to rise further, it would be wise for households to plan ahead. Here are some ideas:

• Plan as if your interest rate is 1.50 percentage points higher – pay the difference into an offset account, a redraw facility or a special savings account, so you’re prepared if rates do reach that level
• Reduce discretionary spending – holiday domestically rather than internationally, go out less, cook more meals, switch from Ubers to public transport, buy less ‘stuff’
• Increase your income – ask for a raise, switch to a higher-paying job, do more hours, start a side hustle, rent out a spare room in your home

If you’re looking for a better rate on your home loan, talk to us at Rateseeker about your refinancing options.

Australia is in the middle of a building bonanza

Although the media has picked up on a few negative headlines about some construction companies experiencing financial difficulties, Australia is actually in the middle of a homebuilding bonanza.

A whopping 143,037 new house builds were started in the year to March, setting a new record with the most recent data from the Australian Bureau of Statistics.

Is your financial situation keeping you from buying or building your first or next home? Get in touch with Rateseeker for expert financial advice and take advantage of our obligation-free consultation to get started today.