3 Reasons Why House Investing Is at an All Time High
Why is house investing at an all time high? The Australian property market has been going haywire over the last two years, with first-home buyers, property investors and developers all competing to secure regional and city dwellings. Why is this the case? What is driving the market to jump on property to the level they have been? Our experts have looked at the factors, and have outlined the reasons why house investing is at an all time high below.
House prices across Australia have risen dramatically over the last two years. This is partly a result of the RBA holding interest rates at 0.1%. This means that the cost of taking on a mortgage is at the lowest that they have ever been. More buyers have entered the market to invest at these low mortgage rates, and are competing against other buyers for houses, driving up prices.
Another factor that has caused house prices to rise across is the rise of remote working. Workplace culture and policies have changed regarding remote working, with the rise of tools such as Microsoft Teams and Zoom allowing for work to be conducted outside of the office. This has meant that workers do not have to live in consolidated areas surrounding the CBDs of capital cities, driving the demand for property into outer-suburban and regional areas. An example of this is the rise in house prices in the Northern Beaches of Sydney, with the median home value rising by 46.1%
Rising rents are also a factor as to why house investing is increasing. House and apartment prices have been driven up as the cost of owning a home has increased. Few people have been able to get into the market, and are therefore renting. With more renters, there is greater competition for homes, leading to higher rental prices, which leads to more house investors.
Demand for houses as a rental option has been a specific growth area in rental prices, with weekly rents reaching an all time high of $580 in Sydney in Q3 of 2021. This is a result of more renters looking for dwellings that best support an increased time of working from home, with renters wanting office space, backyards, and larger living areas.
Falling Vacancy Rates
Vacancy rates have fallen to 1.6%, the lowest they have been since 2011. This is due to many international students, workers and Australian citizens returning to Australia and increasing the competition between renters. Alongside this, vacancy rates may have fallen due to rental leases becoming longer with renters wanting longer leases due to being unable to get into the property market. These vacancy rates demonstrate to investors that there is a large supply of renters who are willing to rent out properties at higher prices. In turn, this attracts house investors.
Are you a house investor who is looking for an expert team to help arrange a property investment that is right for you? Vision Property and Finance has operated for over 20 years, with our award-winning team helping hundreds of clients secure a home loan that is right for them. If you’re looking for assistance, get in touch with us here.