Research conducted by a national home loans provider – Mortgage Choice, suggests that now is a great time to purchase a property.
According the research results, Australia currently has a very low rate of rental vacancy, while there are genuine expectations of rising rents due to expected economic growth coupled with healthy levels of immigration. Property investors could do very well by entering the market at the present time.
Kristy Sheppard, representing Mortgage Choice, said figures from RP Data found that capital city rents increased by 4.2 per cent in 2010 and they are expected to rise by 7 per cent in 2011.
“To put this into real terms, in Sydney it equates to an extra $33.60 on the average weekly rent of $480 for a house and $30.80 on the average weekly rent of $440 for a unit,” she said.
“Then consider that it looks likely we’ll see interest rate rises of around 0.5 per cent by the end of 2011. For a 30-year $300,000 principal and interest home loan at 7 per cent – by no means the lowest rate available – this means $31.30 extra on the required weekly repayment of $460.29.
While it can be challenging keeping up with rental repayments as well as home loan repayments. If you are a property holder, at least you can look forward to benefiting from the expected capital growth. Landlords, have furthermore the flexibility of rate increases to offset some of the extra holding costs they may be facing.