Elections are over and mortgage brokers and financial planners in Perth are already busy. As everyone knows, the Coalition soundly defeated Labor, but which side won isn’t as important as the knowledge that we now have some stability in the government.
Let us preface the rest of this blog piece by saying that we don’t care who you voted for. What’s important is that we now have a much better idea of our country’s direction for the next three years. This always results in stability and stability is always good for consumer and investor confidence.
The Investment Outlook
Our financial planners have noticed that a unique set of circumstances currently applies to the Perth property market. While many of them are Australia-wide in scope, some are unique to Perth and WA. We feel that now is an extremely good time for investors to get involved in property. Here are some reasons why.
Less Construction
Currently, 25,000 less homes are being built in Australia than ten years ago. This has two effects. First, it results in less jobs in the construction industry; second, it creates less supply. One of the basic and most enduring tenets of any market is the relationship between supply, demand and prices.
As the population increases, demand for housing increases. Meanwhile, the supply is not growing as fast as the population. This puts pressure on prices to rise.
Will More Australians be Priced Out of the Housing Market?
As prices rise and jobs decrease, less potential first home buyers can afford to buy homes. This increases demand for rental properties. As demand for rental properties rises, it creates more opportunity for investors to buy properties and rent them to people who can’t yet afford to buy a home.
This means the rental market in the near to mid-future could be lucrative for investors.
All-Time Low Interest Rates
As we all know, the RBA has cut its interest rates to an all-time low to stimulate the housing market. It has met with some success, but there is still a great “window of opportunity” for property investors.
Call Purely Finance: (08) 9472 9766
Let our financial planners show you how low interest rates and high rents can produce cash flow for your Perth properties.