HTW Commentary On Melbourne Property May 2014
– With interest rates at record lows and property prices in many regions beginning to increase, now may be the perfect time for first home buyers to enter the market.
– Suburbs such as Werribee, Deer Park and Cranbourne are fast becoming a mecca for first home buyers and young families due to the affordability of these suburbs.
– However there may be an oversupply of new house-and-land packages in the western suburbs, which could intensify given the recent job losses in the surrounding area.
– Investors on the other hand are seeking properties with different characteristics than those of first home buyers such as proximity to public transport, infrastructure and strong rental demand. Investors therefore are interested in different suburbs.
– Many investors are seeking out properties in established suburbs such as Bayside’s Highett, where they can manufacture equity by renovating an existing dwelling.
– Both domestic investors and first home buyers are steering clear of the CBD, as international purchasers from countries such as China, Malaysia and Singapore are paying premiums for off the plan inner city apartments.
– The oversupply of certain properties has resulted in Melbourne now having the softest rental yields of any of the capital cities.
– In order to overcome the affordability issue, first home buyers have been using various strategies in order to enter the property market.
– A popular method at the moment is to purchase a property and then lease it out.
– The rent helps cover the mortgage and the owner can take advantage of tax savings through negative gearing.
– Another way of easing the financial burden of a property is to purchase it with someone else, such as a parent, sibling or partner.
– This assists with another income helping meet monthly repayments and can also avoid incurring extra bank fees.
– When parents or family help out when gathering a deposit, Lenders Mortgage Insurance (LMI) potentially can be avoided, by insuring your loan-to-value (LVR) is below 80%, thereby save you thousands of dollars.
If you don’t already, you can subscribe to receive this report directly each month for FREE. Simply jump on the HTW website www.htw.com.au and follow the prompts.
Thanks To Alphabroker