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CATEGORY FINANCE

Spring into action W ith the property market appearing to grow as the pandemic passes and interest rates steady, now may be a good time to invest in residential property. e current growth of the property

Investors’ market e market for residential property is gen erally made up of 30% investors and 70% owner occupiers, the latter of which can be further broken down into rst home buyers and those upsizing or downsizing. First home buyers are disadvantaged in the current market because of the di culty in saving for a deposit, and reduced bor rowing capacity due to high interest rates. Upsizers and downsizers are in a better position, and as Julian points out, they are frequently looking for properties with vacant possession so they can buy and sell seamlessly. “Investors have got a bit of an edge,” he says. “If someone is selling a property with a tenant and they’ve still got six to eight months to run on their lease, it’s not attractive to an owner-occupier. So, that could be an opportunity that sells at a lower price due to less competition.” He points out that the main reason the propertymarket is holding up better than ex pected at themoment is because stock levels have gone down signi cantly. “ e compe tition cooled o when stock levels were low. But stock levels have improved signi cantly. We expect the second part of this year to be an exciting time in the property market.” So investors need to be ready. “ e best opportunity in the property market is always in retrospect,” says Julian. Do your homework e fundamental truth about the property market is, despite uctuations, it has always been very resilient. “Historically, residential property has been a very sound asset,” says Trevor. Julian adds, “ e key thing is to get to the coalface and do your research. Be across the market and ready to buy so you’re not scrambling when everyone else piles back in when sentiment rises.”

Doing your research entails having a long-term goal, for which you can draw up an investment strategy. “It’s about working out where that set of numbers, growth target, borrowing capacity, cash ow capacity and objectives ts into the property market,” says Julian. “Every state has di erent price points, di erent yields, di erent major projects to tap into. ere are de nitely windows of opportunity. I would suggest this year is certainly going to be an opportunity for those that are nancially viable and ready.” Trevor adds that the general principles of picking the right locations still apply. “For example, don’t buy in an area that is ood prone,” he says. “Some councils have fantastic online tools where you can check for this – particularly if you’re looking in a regional or rural area. Make sure the property is not subject to environmentally protected areas. You need to really do your research, and nd out the environmental and legal impacts the property may be subject to, so you don’t get caught short.” u Looking to invest in property this spring? Find out more about BOQ Specialist’s limited investor rate offer today by contacting one of their financial specialists on 1300 160 160 or visiting boqspecialist.com.au/invest. Disclaimer: is article may contain general advice. is article has not been prepared with reference to your nancial circumstances and should not be relied on as such. You should consider the appropriateness of the advice before acting on it and obtain your own independent nancial, tax and legal advice as appropriate. BOQ Specialist is not o ering nancial, tax or legal advice.

market is an early sign that, despite ongoing discussion of interest rates, now may be the time to consider investing in residential property. “We’ve gone through a period where we’ve had no rate changes in the last couple of months,” says Trevor Robertson, BOQ Specialist’s Head of Residential Products. “ e early indications are that things have stabilised. at’s why spring could be a good time to consider investing in the property market. However, you need to be very selective in what you look for.” Residential property has long been an attractive investment option for dental professionals, as such investmentsgenerally generate good returns, and if not, creates a negative gearing situation which may help with tax deductions, depending on each individual’s circumstances. However, as Trevor points out, expectations of high migration levels over the coming year will continue to put pressure on stock levels and property values. “People need to be careful that they’re not paying top price,” he says. “ ere still appears to be a disconnect between expectations of property value and the property’s real value.” “ e sheer movement of population after the pandemic, combined with increased immigration, means that there are signi cantly low vacancy rates everywhere,” adds Julian Muldoon from 1Group Property Advisory. “It also means rents are up anywhere from 10 to 30% over the last 12 to 18 months. at has meant investors have been able to hold their investment properties while rates are rising.”

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