What Do Increased House Prices Mean For Investors?
Updated: May 18, 2022
For the last 12 months media outlets have been reporting on the increase to Australian house prices, nationally. The 1.6 per cent increase that was experienced in July has bought the national 12 month combined value up to 18.4 per cent. This is the fastest growth rate seen throughout the Australian property market since 2004.
Property expert, Terry Ryder recently announced that more real estate investors have been selling property rather than buying in recent months. Additionally, he stated that one in four homes sold during the month of June were owned by investors. Economists predict this is a result of increasing property prices.
Despite low vacancy rates and high rental yields, it's believed that these real estate investors were motivated to cash in on increased property values. Further to this understanding, Paul Ryan, an REA Group economist stated, "investors are likely selling to lock in gains after strong growth in the past year."
Importance of Real Estate Investors
More investors are needed than ever before to provide for the demand in rental supply. For the second month in a row, the national vacancy rate stands at 1.6 per cent. As explained by Liam Wignell in The Property Tribune, 3 per cent is needed for a balanced market.
Terry Ryder stresses there's a, "serious undersupply of rental properties," which is concerning for property markets. Additionally, this low rate is contributing to increasing rental asking prices, nationally.
While there has been heightened motivation for investors to sell properties (rather than buy) in recent months, growth is still predicted to take place. This is especially relevant for those looking to buy a Brisbane investment property in the decade leading up to the 2032 Olympic Games.
For investors choosing to hold on to their properties or buy to expand their property portfolio, increased rental yields provide promising opportunities to make positive cashflow.
Investors, Take Action!
While the value of property increases; the time to hold or cash in on these opportunities is now! Property prices are only expected to continue increasing across Australian property markets. As we explained in a recent article, investors who take action now are expected to experience a higher rental yield and capital growth from their investment property.
If you're wanting to buy an investment proeprty or grow your property portfolio, we're here to chat. REIF's finance specialists and investment strategists would love to sit down and map out your strategy for wealth creation. To learn more, reach out on the details below or download our eBook, 'Building Wealth Through Property.'
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