Property investors got the trifecta this week, with some very good news on three fronts.
Property investors can now have confidence and certainty about the benefits on offer for property investing, after the surprising election result.
We will continue to enjoy negative gearing benefits, which can improve the cashflow from our investment properties. We also now know that you’ll be able to hold onto more of our properties’ capital growth if and when it comes time to sell in the future.
The number one handbrake on property prices lately has been the ability to get a loan. This hasn’t been helped by the regulator, APRA, making the banks assess your loan application against a very high 7% interest rate.
APRA will be getting rid of this requirement, which will make it easier for property investors and home buyers to get the loan they need for their next property purchase.
There is almost universal agreement that interest rates will go down - and probably soon.
The reserve bank has given a pretty big hint that they plan to lower interest rates from the current 1.5%, and some experts, like Bill Evans from Westpac, are even predicting up to three rate cuts this year.
The reserve bank is focussed on managing inflation and employment, but in the end it means lower repayments for home buyers and better cashflow for property investors.
All of this news will work together to help support growth and help to turn the price falls more quickly in Sydney and Melbourne.
However the big news will be for many property markets outside of Sydney and Melbourne which are poised for growth right now - as demand increases thanks to making borrowing easier and cheaper, and encouraging property investors and first-home buyers into the market.
For those of us keen to begin and grow our property portfolios, to provide a more secure financial future for ourselves and loved ones, the recent good news offers compelling reasons that this is a great time to take action.