Even though interest rates are high, now is a fantastic time to be a property investor in Australia.

Find out why the second half of 2024 is a great time to take action as an investor if you can.

Housing approval slumps

As reported by the Australian Bureau of Statistics, the total number of dwellings approved in Australia fell by 0.3 per cent in April, and approvals for private houses fell by 1.6 per cent. Latest figures showed approvals are down in every state except for WA.

One of the main reasons approvals have dropped for private dwellings and apartment developments is interest rates; it’s not so easy to access the finance required for such a project and some developers and buyers are holding off until rates drop.

The high cost of materials and labour is an issue as well. The pandemic caused an upswing in prices and inflation is still rising at a rate higher than ‘normal’, so new homes are becoming far more expensive to build.

This lack of approvals means more demand for existing homes; if you’re currently an investor or you’re able to buy this year, you can feel confident your place will increase in value.

Migration is rising

Migration forms part of current policies to fill labour shortages, especially in essential industries like transport, health, and aged care.

However, as explained recently in the Daily Telegraph, in NSW last year there were 170,000 new migrants, but just under 47,000 new homes were built. Authorities are trying to catch up by fast-tracking housing projects and changing rules to zoning, but this takes time. The shortfall can’t be filled overnight so investment properties are holding and increasing in value in the meantime.

Rental vacancies are at all-time lows

Landlords and property investors have the advantage at the moment due to rental vacancy rates being under 2 per cent in Sydney, Melbourne, Darwin, Brisbane, Canberra and Hobart, and under 1 per cent in Adelaide and Perth.

This gives you the opportunity to achieve a healthy yield for your property and to work with an experienced property manager to attract a long-term, reliable tenant.

If you’re an experienced investor, you may decide to explore a subdivision or development project. Creating more than one home on a single block gives you additional income opportunities. Loop in your financial planner and a lending specialist to help you figure out the details of this type of project.

Future value growth

Australia has been holding its breath waiting for interest rates to drop for several months now but inflation figures have remained higher than expected, which indicates that a change is not imminent.

However, it’s only a matter of time before rates do come down. When this happens, prices, which are currently reasonably level, will rise. If you’re able to invest in 2024, not only will your repayments become more manageable (if your loan rate is variable), you will be able to take advantage of this change.

Take a look at historic figures and you will see that house prices in Australia always grow over time. This is why property investing is such a trusted strategy.

There are plenty of areas in Australia that still have fantastic growth potential for investors. Reach out to teresa@teresaberger.com.au to discuss investing opportunities and property management.