If you've been waiting for the right time to start your investment portfolio, or indeed grow it, the latest data from the QBE Australian Housing Outlook shows good things ahead for the state of Queensland. Between now and 2020, house prices in Brisbane are expected to rise by 7.1 per cent and that success could trickle down to the southeast. Buy now and see the equity of your investment grow over the next two years, then use it as a stepping stone for your next purchases.
Buying property on the Gold Coast takes some consideration – you have to make sure you're getting the right place for your needs. It's more than just finding somewhere that fits your budget. Here's why you need to invest now.
While 7.1 per cent growth in two years is extremely good and will benefit any portfolio, it shouldn't be your goal. Aim higher and look for a property with a greater than average predicted growth rate over the next two years. Hard data might be difficult to come by when you're talking specific suburbs, but get a feel for the demand in an area and where people are spending the most money. From that information, you'll be able to see where the best returns can be found.
Look at upcoming development projects as well. A large shopping complex or a revamp of a council-owned park or shopping precinct could drive house prices up. Buying a property before these developments get underway means you'll capitalise at the lower end of the market. Then, you can sit back and watch as the neighbourhood becomes significantly more sought after and the value of your investment increases.
Currently, the cash rate is 1.5 per cent, as set by the Reserve Bank of Australia (RBA). It's been the same since August 2016 thanks to solid financial performance from the Australian markets, but QBE expects it to rise to 1.75 per cent by 2020.
The cash rate is the interest rate at which banks and lending institutions borrow money from the RBA to provide loans (including home loans) to customers. When the cash rate is low, overall interest rates are lower. If the cash rate rises, lenders will have to pay more to borrow money, so they'll likely charge more.
Taking out a home loan now (and setting a fixed term for the next five years) could allow you to take advantage of the current financial position, and avoid the predicted higher interest rate come 2020. This will also allow you to increase the equity in your property more quickly so you can buy a second investment property.
For more information about why now is a great time to invest in a Gold Coast property, speak to a member of the team at Ray White Surfers Paradise.