Smart Investments: Maximising Your Home Equity
In the ever-changing landscape of real estate, staying ahead of the curve is crucial for making informed financial decisions, especially in the context of recent interest rate changes and the evolving property market.
Unlocking the Potential in Your Home Equity
The Impact of Interest Rate Rises
With another 25 basis points of a rate rise, homeowners may be facing an additional $80 per month in mortgage repayments on a $500k loan. This adds to the $1,040 monthly increase observed since rates began rising in May last year. Higher interest rates also lead to a diminishing borrowing capacity, with lenders incorporating a three-percentage point serviceability buffer.
Despite the potential slowdown in housing value growth, the near-term outlook suggests prices are unlikely to decrease. Factors such as a housing supply shortage, record low vacancy rates, and delayed effects on purchasing demand from overseas migration contribute to sustained upward pressure on home values.
Seizing Investment Opportunities
For those considering property investment, the current scenario presents unique opportunities. With prices holding steady and the Sydney market exhibiting substantial home equity, investors can leverage this equity to purchase property in more affordable markets in other states.
Key Considerations for Savvy Property Investors
Population Growth: Monitor both overseas and interstate migration, as areas experiencing an influx often see increased demand for housing.
Rental Yield: Understand the rental income relative to the property's value. A high rental yield can lead to positive cash flow.
Rental Demand: Assess local rental demand, considering factors like reliance on international students.
Infrastructure Investment: Areas with ongoing infrastructure investments tend to experience population growth and future capital growth.
Employment Diversity: Strong and diverse job prospects are crucial for sustained growth.
Liveability: Consider the overall appeal of an area, including schools, public transport, and amenities.
Book a Consultation
Building the right team is essential for making sound investment decisions.
To delve deeper into these opportunities and make informed choices tailored to your financial goals, we invite you to book a consultation with one of our financial advisors.
We are dedicated to guiding you through the complexities of the market, ensuring your investments align with your unique financial journey.
