The Australian property market is continually evolving, with strong demand for residential and investment properties.
Several new trends are expected in 2018 and people are looking forward to what the Australian property market has in store for homeowners and investors. Here are some reasons why buying a home and getting a piece of the market in 2018 could be a good idea:
Growth of property prices may slow down
After years of double-digit growth, property prices in Sydney are expected to post a slowdown. The property market in Melbourne had already seen slower growth in the latter part of 2017 and some experts believe that it will continue in 2018.
More opportunities are seen for first-time home buyers
Investors are expected to step back and first-home buyers will make a comeback, benefiting from competitive interest rates and new concessions. In 2017, mortgage repricing focused on investor loans (raising their prices), which led to fewer investors going to banks for property financing and owner occupiers getting more competitive lending rates.
Homeowners opting to renovate instead of upgrade
On current property values, a median-priced property in Sydney and Melbourne can come with a stamp duty cost of $50,000. This hefty cost associated with buying a property is likely to push homeowners to stay in their current homes and just do renovation work instead of moving to a new one. In fact, in 2017, the market saw a significant increase in loan applications for renovation.
Take advantage of rental income and yield
Planning to buy an investment property? It can generate regular income. To ensure that investing in property is the right thing to do in 2018, consider comparing your returns from rental income and returns from other assets. Also, avoid losing a lot of money on the sale by making sure that the property is positioned to have an adequate level of capital growth. Investing in property can also come with significant tax benefits. You can deduct investment-related costs from your overall income, possibly resulting in a lower tax bill.
Are you planning to buy a home? Watch out for these trends that can help you make a more informed decision.