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Buying an Investment Property: Is It Still a Good Time?

Buying an Investment Property | Zippy Financial

You might be considering buying an investment property, but the recent interest rate hikes have made you think twice. We have outlined the reasons why now may still be a good time to buy. 

There is no denying that rolling rate rises might have some sections of the media spouting doom and gloom. After all, national property prices have dipped, and higher interest rates can lower your borrowing power. But, if you can buy now, the current climate can provide less competition and more power to negotiate a good price. 

Furthermore, rental tenancy vacancy rates have reached record lows, meaning that the demand for rentals is high. 

Reasons Why Buying An Investment Property is Still GOOD

It is a Buyer’s Market

With rising interest rates and inflation, there has been a softening of the market, and this may reward those who are ready to buy now. 

CoreLogic data shows there are fewer buyers at present, and properties are increasingly sitting on the market. In the three months to September, median days on the market increase to 25 days. That is a big increase from a median of 20 days in November 2021. 

Fewer buyers mean more property options for you to choose from and less competition when putting in an offer. And by targeting properties that have been on the market for a while, you could potentially have more bargaining power (just ensure you do your due diligence).

Low Rental Tenancy Vacancy Rates

Currently there is a high demand for rental properties across Australia. According to SQM Research, with the national rental tenancy vacancy rate currently at 0.9%, it is the lowest it has been since 2006. This means that the likelihood of your investment property sitting empty now is low. People are looking for solid rental properties, and if you have got just the thing, your investment property could have several good tenants putting in applications. 

Flexibility Around Location

When purchasing an investment property, you are not locked into buying in your home state or city. You can set your sights further afield to make the most of what the current property market has to offer. 

You can look to buy in areas where property prices have already dipped and leverage the current buyer’s market to negotiate. Also, consider purchasing in an area with a healthy demand for rental properties. That way, you can make a financially sound purchase and increase the chances of having a good tenant in your property sooner. 

Possible lower cost of entry than for owner-occupiers

When buying an investment property, you can be more flexible, which can open more affordable options. 

Look for the essentials that tenants want such as a safe, comfortable, and low-maintenance property. And with lower competition now, there could. Be more viable properties to choose from. The French door, Olympic-sized pool and ocean-view wish list that usually blows up budgets need not apply!

Frequently Asked Questions

Is it still a good time to buy an investment property despite the recent interest rate hikes?

Yes, despite the recent interest rate hikes, it may still be a good time to invest in property. The current market conditions offer less competition and more power to negotiate a good price.

What does the data say about the current buyer's market?

According to CoreLogic data, there are fewer buyers at present, and properties are increasingly sitting on the market for longer periods. The median days on the market have increased to 25 days, up from 20 days in November 2021.

How are rental tenancy vacancy rates affecting the investment property market?

Rental tenancy vacancy rates have reached record lows, currently at 0.9%, the lowest since 2006. This high demand for rentals means that the likelihood of your investment property sitting empty is low.

Can I buy an investment property outside my home state or city?

Yes, you have the flexibility to buy in areas where property prices have already dipped and where there is a healthy demand for rental properties.

What are some cost-effective options when buying an investment property?

When buying an investment property, you can look for essentials that tenants want, such as a safe, comfortable, and low-maintenance property. With lower competition, there could be more viable properties to choose from.

How can Zippy Financial assist me in buying an investment property?

Zippy Financial can guide you through various financial considerations like your borrowing power, unlocking equity in an existing property, and finding the right loan.

Give Us a Call

If you are ready to dive into property investment, give us a call! We can walk you through what you need to consider when it comes to your finances, such as your borrowing power, unlocking the equity in an existing property, finding the right loan and much more.

Phone: 1300 855 022

Email: clientservices@zippyfinancial.com.au 

Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business. 

About the Author:   

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.   

Connect with Louisa on Linkedin.   

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025). 

Disclaimer:This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial. 

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