Let’s look at 3 common property investment options.

• Renovating for Profit

One popular property investment strategy is to purchase a property for a lower price than market value and then renovate it. Ideally, the renovations should improve the value, which allows the investor to sell it for a profit. This strategy is commonly known as ‘flipping’.

• Positive Gearing

Another option for using property investment to build wealth is positive gearing. This is where the rent amount you receive from the tenants in the property is greater than the costs you incur to own the property. Essentially, your rental income incurs a profit overall, so you’re generating passive cash flow.

• Negative Gearing

Negative gearing is the term used when the costs of owning a property outweigh the rental income you receive. Any outlay you contribute towards covering the shortfall in costs can be tax deductible, which helps to reduce the amount of tax you pay each year.

So, which property investment strategy is right for you? Let’s look at each option in a little more detail.

Property Flipping

Firstly, let’s look at the strategy of ‘flipping’ a property. When you’re looking to buy a property with the intention of flipping it for a profit, there are many factors to consider. This process is often used to generate short term monetary gains, usually to then reinvest into a similar project and repeat the process.

Flipping involves buying a property that you already know needs renovating just to bring it up to standard. It’s important to research the value of similar homes that have already been renovated in the area. You’ll also need to take into account what type of renovation work is required to get the property up to scratch and the approximate costs to complete those renovations.

When you have an idea of the approximate value your completed property could achieve, you’re in a better position to work out your total budget for the project and whether it’s likely to be profitable or not.

It’s recommended that you engage the services of a qualified Building Inspector to make sure there are no hidden surprises in the property you want to buy that could blow your renovating budget out of the water.

The main features to consider for your renovation project are the bathroom and kitchen, as these are likely to have the most positive impact on the overall sale price.

The renovating and flipping process can be fun as well as challenging. Planning ahead and managing time and costs is also very important. Holding the property for too long can eat into profits, and having insufficient funds to create the outcome desired can also be detrimental to the bottom line.

Positive Gearing

The next option involves generating passive cash flow from your rental income. Property investors who use positive gearing to their advantage prefer to own and hold the property for a period of time.

There are several ways to find or create positively geared rental properties. One option is to pay down the mortgage outstanding on an investment property until the rental income outweighs the costs of owning and managing it. Another option is to put down a large deposit on the property at the time of purchase to ensure the rental income covers all your costs.

Of course, there are ways to buy positively geared properties without having a large deposit or without waiting for years to pay down the mortgage. The key is to have a solid understanding of the rental demand and market values in the area you’re considering buying into.

Know what the rental yields are for similar homes in the area and negotiate for a competitive interest rate on your mortgage to keep your repayments as low as possible. In the current market with an extremely low cash rate, this could be something to consider. The advice of a financial planner to assist is always recommended.

Finding positively geared properties isn’t impossible, but it can be challenging. This is an investment option that is perhaps better suited to an experienced investor.

Negative Gearing

Negative Gearing is the property investment option for people who do not have either the time, money or inclination to follow the first two options.

For many people, the process of buying a negatively geared investment property is usually to borrow 100% of the property purchase price and associated costs. This is usually an option for home owners, as they have the opportunity to secure the new investment loan against equity in another property.

When you borrow the entire purchase price and all the costs of your new investment property, it tends to mean the rental income you receive won’t quite cover all of your costs. The result is a shortfall that requires you to contribute an amount of money each month to cover. The shortfall amount is then used as a tax deduction from your salary or wages, which effectively helps to reduce the amount of tax you pay.

Over time, the amount of rent you receive from the property should increase, which reduces the amount of shortfall you need to cover. Of course, if the rental income increases far enough, your negatively geared property could become positively geared over time.

No matter what investment strategy you use, it is important to find property that will generate the greatest deductions. In most cases, new properties tend to offer more deductions than established properties.

Correct mortgage and tax structures are also important considerations, as you have the opportunity to maximise the effectiveness of the property. The goal is to achieve the positive geared scenario and then generate passive income as the tax deductions diminish.

All of these options for building wealth through property investment are great, but finding the right one means getting the right advice.

To work out the best property investment option for you, call us on 1300 832 554 or fill out and submit the “Enquire Now” form on this page and let us help create a wealthier YOU!

MORE INFO:
Glenn Loveday
Sales Manager
e: gloveday@nieuvision.com.au

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Disclaimer: We recommend that you seek independent financial and taxation advice before acting on any information in our articles and newsletters. They contain general information only and have been prepared without taking into account your personal objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply.

The post 3 Ways Property Investment Can Build Wealth appeared first on Nieuvision.

Let’s face it; interest rates are cyclical. While they might be at historic lows right now, there are always points in the economic cycle when they may start to rise again. The threat of being caught in a series of interest rate hikes is often enough to prompt many home owners to jump over to a fixed loan.

Before you make a decision either way, take some time to weigh up the pros and cons of each option. Here is a quick look at the benefits and disadvantages of both fixed and variable interest rate mortgages: 

Variable Rate Loan

A variable interest rate mortgage is a loan where the interest rates can fluctuate in line with the cash rate. Of course, there are also occasions when banks can raise or lower the interest rates even when there are no changes from the Reserve Bank.

Benefits of a variable loan

When your mortgage is on a variable interest rate, the interest you pay can fluctuate at any time. If interest rates go down, your repayments will also reduce. However, if interest rates start to climb, you can expect your repayments to increase accordingly.

Many variable rate mortgages are quite flexible. You have the freedom to make additional payments, which helps to repay your mortgage faster. There are also no penalty fees for paying extra off your home loan balance.   Some banks also offer a redraw facility, which allows you to redraw any additional payments you’ve made.

You may also choose to link an offset account to your variable rate mortgage. An offset account gives you the opportunity to reduce the amount of interest that can be charged on your remaining balance.

Disadvantages of a variable loan

While variable loans offer lots of flexibility, there are also some disadvantages to consider. Perhaps the biggest drawback is that your repayments will increase if interest rates go up. If you’re on a tight budget, it can be challenging trying to keep up with payments when they start to rise.

Fixed Interest Rate Loan

A fixed rate loan allows you to lock in your interest rate for a predetermined period of time. Most banks offer fixed interest rates for varying terms. You can choose to fix your loan for 1, 2, 3, 4, or 5 years, although there are some banks out there that may let you fix for up to 10 years.

While locking in your interest rate can be a good idea for some people, always take into account the benefits and drawbacks before you make a decision.

Benefits of a fixed loan

During the fixed rate term, your interest rate can’t be affected by any fluctuations in the market. This means your payments also won’t change during the fixed term. You’ll know exactly what your monthly payments are, which can make your budgeting easier.

It can be tricky to know how long to lock in your mortgage for. Most banks offer very competitive interest rates for 2 and 3 year terms. However, the 5 year fixed rates tend to be a little higher in comparison, simply because the banks tend to hedge their bets against future increases in the cash rate.

Many first home buyers and families can find it reassuring to know that repayments won’t change for a certain period of time. If the variable rates start to rise, you have the peace of mind that you won’t be affected while you’re protected by your fixed rate loan.

Some investors may also find the certainty of a fixed rate reassuring. Locking in the interest rate for a period of 2 or 3 years can mean knowing the payments remain the same. However, the rental income may increase over the same period of time, which could help to improve your cash flow.

Disadvantages of a fixed loan

While the advantages of locking your mortgage into a fixed rate might be tempting, it’s a good idea to remember there are also some disadvantages to take into account.

When you agree to lock your mortgage into a fixed rate term, you may need to pay hefty break fees if you choose to change the loan before the end of the term. For example, if you switch back to a variable rate, refinance your mortgage, or sell your home during the fixed rate term, break fees may apply.

In some cases, the bank may also charge you break fees if you make substantial additional payments throughout the fixed term. Many banks will place limits on the maximum extra repayments you can make each year. In many cases, the limit is between $5,000 and $20,000.

It’s also worth noting that the fixed rate offered by many banks is often higher than the variable rate. If the variable rate drops, you’ll miss out on reaping the benefits of reduced payments.

In most cases, an offset account is not available to fixed loans, but there are some lenders who will offer a partial offset during the fixed term. Some banks may also not allow you to redraw any extra payments you’ve made until after the fixed term has ended.

Split Loan

If you’re unsure whether to choose a fixed or variable loan, it is possible to split your mortgage and take advantage of both options. You can keep a part of your mortgage variable to take advantage of the flexible options and fix the remaining part to take advantage of locking in a low interest rate.

No one can accurately predict how interest rates will move. Likewise, your individual financial situation isn’t the same as anyone else’s, so what works well for one person might not suit your financial goals.

The best way to check which option might work best for your financial circumstances, your budget, and your goals is to discuss your home loan type and structure with a mortgage specialist. 

Call us today on 1300 832 554 or click here to request a FREE Home Loan & Finance Structure Health Check.

MORE INFO:
Karyn Reddick
Loan Manager
e: karyn@nieuvision.com.au

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Disclaimer: We recommend that you seek independent financial and taxation advice before acting on any information in our articles and newsletters. They contain general information only and have been prepared without taking into account your personal objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply.

The post Fixed vs Variable Interest Rates: Which is the Best Option for You? appeared first on Nieuvision.

Step One: Ask for Advice

Your local bank might be a good starting point, but how will you know you’re getting the most competitive interest rate or the right loan type to suit your needs? It pays to ask a mortgage specialist for advice about the different interest rates and loan types on offer from a variety of banks and other lenders.

Be sure to ask plenty of questions. After all, it’s your home loan so it’s in your interest to be sure you get the answers you need.

Step Two: Get Your Documentation Together

Before you rush into your local bank branch, take the time to get your documentation together. Remember, the bank assesses your ability to repay the money you borrow based on the information you provide them.

You’ll need to provide at least two current payslips and last year’s tax assessment notice to verify how much you earn. If you earn any other types of income, you’ll need to provide evidence of that too.

If you’re buying your first home, the bank may ask to see bank statements proving your savings history. Alternatively, if you’re refinancing an existing home loan from another bank, the new lender may want to see statements showing that you’ve kept up with all of your repayments.

Step Three: Choose the Right Loan Type

Once your documentation is in order, it’s time to check that you have the right loan type to suit your financial goals and your individual circumstances.

If you’ve taken the time to ask for advice from a mortgage specialist, you’ll already know whether you want a fixed rate home loan or whether you’d prefer a variable interest rate with a linked offset account.

You should also have a fair idea whether you’re getting a competitive interest rate compared to what else is available from other lenders. There’s also the decision of whether you want your mortgage repayments on principle and interest payments each fortnight or on interest only payments once a month.

Step Four: Check Your Borrowing Capacity

Before you submit your loan application, it’s a good idea to check how much you can borrow. Just as different banks offer a range of differing home loan options, they also have varying policies for how they work out your borrowing capacity.

Your mortgage broker will use the income documentation you provide to work out how much you can borrow from a range of different lenders. Some may allow you to borrow more than others, so it’s worth checking whether the bank you want to use will give you the loan amount you need.

Step Five: Choose the Right Lender

Aside from using different policies to work out how much you can borrow, different banks also have varying home loan options, so it pays to choose the right one to suit your needs. For example, some banks may require you to put down a larger deposit on your home purchase than others. Some may not offer all of the home loan features you want, while others may have additional fees and charges you didn’t expect.

Step Six: Apply for Pre-Approval

Submitting an application for a pre-approval is a great way to make the process a little easier for you. The lender you choose will assess your application and let you know that you’ve been conditionally approved to borrow a specified amount of money.

Once you receive your pre-approval, you can go house hunting with confidence.

If you’re ready to start the home loan process, why not call us and speak to a good mortgage broker about your options today on 1300 832 554 or click here.

MORE INFO:
Rick Nieuwenhoven
CEO
E: rick@nieuvision.com.au

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Disclaimer: We recommend that you seek independent financial and taxation advice before acting on any information in our articles and newsletters. They contain general information only and have been prepared without taking into account your personal objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply.

The post Demystifying the Home Loan Process appeared first on Nieuvision.

What many people don’t realise is that car dealers often have the discretion to set their own interest rates unfairly just to boost the commissions they earn.

Recently, the Australian Securities and Investment Commission (ASIC) decided to ban flex commissions in the car finance market in an effort to stop car dealers charging unfair interest rates on car loans in order to increase their profits.

The term ‘flex commissions’ refers to car dealers setting higher interest rates than the actual rate offered by the lender. In some cases, the finance officer within the car dealership could set an interest rate as much as 7% higher than the standard interest rate offered by the lender.

The result is that the car dealer earns higher commissions, while the customer ends up paying potentially thousands of dollars more in interest charges over the term of the loan than they needed to pay.

In an effort to stop shady car dealers from overcharging consumers to line their pockets, ASIC has now prohibited flex commissions, using its power to modify various sections of the National Credit Act. Car dealers will no longer be able to increase their profits unfairly by using flex commissions.

Instead, the lender will determine the rate charged to the customer. Lenders will also pay a standard commission to the car dealer based on the loan amount.

It still pays to shop around for car loans

While the ban on flex commissions may help keep interest rates in line for many customers, it doesn’t automatically mean that getting your car finance from the dealership will mean getting the best deal.

It’s true that the lender will set the rates offered by the finance officer at the car dealer. However, it’s important to remember that car dealers may only have affiliations with one or two preferred lenders.

It’s also worth keeping in mind that the loan terms offered at the dealership may not always be in your best interests. Steep exit fees, early repayment penalties, or other hidden terms and conditions may apply, so it pays to read the fine print before signing on the dotted line.

By comparison, a good mortgage broker or financial consultant may have access to a panel of multiple lenders with broader financing options to choose from.

If you’re serious about getting the best deal on your car finance, it still pays to shop around. It may be possible to locate a lender willing to offer a reduced interest rate or better loan terms to suit your individual needs.

Take the time to discuss your needs with a mortgage broker before submitting a finance application.

MORE INFO:
Kym Russell
Finance & Property Consultant
e: krussell@nieuvision.com.au

– – – – – –

Disclaimer: We recommend that you seek independent financial and taxation advice before acting on any information in our articles and newsletters. They contain general information only and have been prepared without taking into account your personal objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply.

The post Car Buyers Benefit from Ban on Unfair Commissions for Car Loans appeared first on Nieuvision.

Can I use a home renovation loan or can I get a home loan to include renovation costs?

Yeah, well of course you can. We’ve got to be careful that you’re not classed as an Owner Builder.

The banks aren’t particularly fond of lending to Owner Builders.

So we’ll take that out of the equation, and let’s just assume that you are a normal purchaser, got a new house, but you want to put some add-ons

Yes, you can get a loan that includes renovation costs.

The banks may ask to see invoices for the works that you are going to do, and also have that work reflected in evaluation for improvement in the cost or the value of the property.

Another option is to get a home renovation loan Australia that includes a little extra for renovations and have a component of that loan sitting there for renovations, that might be an easier way.

All this is dependent on the equity that you do have.

If you’re under an 80% LVR, most banks will allow you to take your loan to that, and really not ask any questions about the nature of why you want that additional money.

Another loan structure you could do is have that additional money sitting in an offset account and that way, it’s just waiting there for when you want home improvement loan.

The post Can You Get A Home Loan That Includes Renovation Costs? appeared first on Nieuvision.

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When investing in property, having a well-researched risk management plan is essential.

Traditional property investment is not generally considered a high-risk investment.

Investors generally believe that researching location and establishing trust structures is all they need to do before investing in property. However, most investors fail to create a well-constructed risk management plan; investing in property  without a plan is risky.

Here are some essential risk management strategies to consider when purchasing investment properties.

Risk Management Strategies For Property Investing

Understand The Numbers

Investing in property without fully understanding the numbers is a recipe for failure. Knowing your numbers is imperative because it allows you to analyse the risk factors involved.

Once you know the financial risk, you can adequately assess the viability of purchasing a particular property.

Create a Strategy

Plan your property portfolio, purchasing properties without a proper strategy is unwise.

Your investment portfolio plan should include the number of properties you want to buy, is it financially viable?

How much you plan to spend, loan to value ratios, profit, and loss, expected cash flow for each property. Include taxation, time projections, interest rates, etc. You should review and adjust your strategy annually.

Financial Buffers

Think about it like this, when you buy a car, having some extra money in the bank to cover unexpected expenses is essential. Likewise, when you invest in property, it is crucial that you have some additional money saved to cover unexpected costs. Investing in property without financial buffers is risky business.

Location

The location should undoubtedly be part of your risk management strategy. When searching for potential locations, you should be looking for areas that balance cash flow and capital growth.

Also, make sure the property prices fall in line with your budget; make sure you are looking for locations with properties mid-range prices. Pricing is vital because when you invest in property, it is capital growth that will help you to build wealth.

Diversification

Diversification is critical, plan to purchase properties in different locations. Do not put all your eggs into one basket. Gaining knowledge about property cycles is necessary here.

Research

Conduct extensive research on the location you wish to purchase a property. Delve deep into infrastructure development, population growth, unemployment rates, property prices.

Speak to local business owners, make your projections for the next 10-15 years. Just because purchasing a property in a particular area looks good now does not mean that it will be a good idea in the next 15 years.

Do extensive research to make sure you are making the right decision.

Insurance

Planning for insurance is an essential risk management strategy. Do not just focus on the standard insurance plans such as landlord or content insurance. It would help if you also looked into Life insurance and income protection insurance too.

Advice

If you need further assistance, seek professional help. Trying to do everything on your own is unwise,  especially when you are a new property investor.

In conclusion, plan, plan, plan!

You simply cannot build a profitable property portfolio without planning. A risk management plan should include various smaller plans to create a comprehensive property investment risk management strategy that will minimise risk and safeguard you when unexpected issues arise.

Seeking the support and advise of a professional property investment advisor is always a good idea.  Property investment is a relatively low risk investment in comparison to other forms of investment. However, it is still essential for you to seek advice in areas that you lack knowledge and understanding.

Creating a concise, well put together risk management strategy will give you a clearer understanding of how the property game works, and it will minimise uncertainty and risk.

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The Melbourne property market experienced the most significant quarterly decline in ten years. By the end of 2018, the Melbourne real estate market dropped by -4.7%.

The NAB residential property index highlights that property investors are losing interest in the city and as a result of this and the decline in Sydney’s housing market, Australian house prices have dropped by -2.7% in the last year.

Considering the overall state of the property market in 2018, how will 2019 fare? What is the overall market outlook for Melbourne in 2019?

What Happened in 2018?

After five years of steady growth, Melbourne’s property market experienced a sharp decline. Here are some of the possible reasons why the figures dropped:

• Credit restrictions particularly for property investor loans
• Reduced foreign investment
• More properties, fewer buyers
• Clearance rate reduction
• Oversupply of apartment units

Despite the overall decline in the Melbourne housing market in 2018, some outer suburbs held their prices (+6.2%) In comparison, Melbourne’s inner and middle ring suburbs experienced some price reductions with middle ring suburbs declining -5.7% and inner suburbs -24%.

Melbourne Housing Market Forecast 2019

Property experts predict that by June 2019, the median house price in Melbourne will drop to $820,000, approximately 8.4% less than the recorded median for December 2017. Units are also set to experience a decline, with a predicted 3% drop expected.

By June 2021 the median unit price is forecast to be at $545,000, which works out 2% less than the recorded median in June 2018.

SQM Research suggests that one of the factors affecting the property market is the reduction in interstate migration in the past two years.

Migration to Victoria has reduced by 4,000 since 2017. Other factors include bank finance restrictions and weakening foreign investment.

Expected Price Changes in 2019

Some property experts have predicted price drops of -9% to -6% in 2019. Here are some of the factors that might affect property prices in 2019.

-9% decline to -6% decline if the cash rate stays the same, slow economy and Labor government elected.

-11% decline to -6% decline if interest rates rise by 0.20 % and Labor government

-3% decline to 0% decline if 0.50% interest rate reduction and Labor government.

If a Labour government is elected, their planned negative gearing repeal policy  could have a significant impact on the property market.

BIS Oxford Economics predicts median unit prices to drop -3.6% by 2020.

Top Melbourne Suburbs to Invest in 2019

It is certainly not all doom and gloom for the property market in Melbourne. These are just some of the top suburbs to carefully consider investing in 2019.

• North Melbourne
• Collingwood
• Ringwood
• Croydon

Growth is more likely on the outskirts of the city, for example, Werribee is up 17.86%, and Officer was up 30.55% in the past year.

Infrastructure development and expensive housing in the city center is luring first time buyers to Melbourne’s outer belts.

Lending restrictions, reduced population growth and weakening foreign investment are all factors affecting the Melbourne property market currently.

However, although further decline is expected in 2019, there is still hope for first time buyers and potential investors in the outer Melbourne suburbs.

Property analysts and major banks have recently modified their predictions for market growth in Melbourne, advising property buyers to tread with caution in 2019.

The post Melbourne Property Forecast 2019: Top Suburbs and Market Outlook appeared first on Nieuvision.

Perth is a picturesque city overlooking the Indian Ocean; it makes a beautiful place to live for young families, retirees and young professionals alike.

With the property market experiencing a downturn in Sydney, Melbourne, and other major cities, Perth has also undergone a slight decline; however, property pundits believe that the market will experience a steady upturn in 2019 and beyond.

Perth Property Forecast 2019

With reference to the QBE Australian Housing Outlook for 2019-2021, the overall prediction is that Perth’s property market should experience some notable growth halfway through 2019 and through to 2021.

There are some crucial  things to consider here such as:

• APRA credit restrictions
• Reserve Bank could decide to raise interest rates if the markets are stable in 2020
• Trade conflict between the USA and China over Iron ore could directly affect Perth’s housing market because Perth’s iron ore industry has recently seen an improvement.
• If the Labour government passes a Negative Gearing Repeal, this might have an impact on rent prices.

Regardless of the issues mentioned, property experts predict that Perth’s property market will experience a positive upturn in the next two to three years.

Perth’s Property Prices in 2019

QBE’s predicts that Perth’s housing prices will drop -1.7% halfway through 2019, increasing +1.9% at the start of 2020, and 4.8% in 2021. The median house price in Perth will level out at $550,000.

These figures indicate a 5% growth between 2019 and 2021. With the mining industry growing at a steady rate, more and more investors could be setting their sites on Perth in the next two years.

With a decline in the property markets in Sydney and Melbourne, property experts predict that the Perth property market could be one of the fastest growing markets in 2019 and 2020.

Unit Oversupply

When the mining industry saw an upturn in previous years, there was a significant demand for unit style housing. However, when the industry experienced a sharp decline, the need for units drastically declined.

As a result, there has been a sharp unit price slump, with prices falling -5.4% in the past year. Prices are set to increase by approximately 2% by 2020.

The last year has seen a 1.0% population growth rate increase; also with an imminent mining industry revival, the oversupply problem could well be a thing of the past.

Best Suburbs To Invest in Perth 2019

House prices are relatively low in Perth at present; however, with forecast growth over the next two years, Perth could be a viable place to invest in property over the next two to three years.

Which suburbs should property investors be setting their sights on?

Stirling and East Fremantle

Stirling and East Fremantle experienced 1.9% growth whereas inner-city Perth experienced a -0.9 % decline. Outer Perth suburbs dropped -2.6%. Properties can be purchased for under $450,000.

Other suburbs to watch:

-Cottesloe

-City Beach

-Kardinya

-Coolbellup

-Bedford

-Kelmscott

-Harrisdale

With the impending mining industry upturn and steady population growth in Perth, it could experience some notable increase in the next two years.

Property investors should keep an eye on the factors mentioned in this article that could have a direct impact on the property market such as interest rates, the trade conflict between the USA and China and possible policy changes.

That being said, Perth is looking like a viable place for property investors to set their sites on.

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Hobart, the capital city of Tasmania, has gained a significant amount of attention from potential investors and first-time house buyers in the past three years. The quaint scenery and quirky architecture and steady economic growth has made Hobart an attractive choice for property buyers.

The market downturn that affected Sydney, Melbourne and other Australian cities had little effect on the capital city of Tasmania. Hobart has experienced the most rapid growth in property prices in recent years, and it still maintains a relatively affordable median house price.

Considering the current market climate, what does 2019 have in store for Hobart?

What Happened in 2018?

Despite the market decline in other parts of Australia, Hobart remained mostly unaffected in 2018. It experienced notable growth, with a strong rental market and steady population growth, Hobart avoided much of the issues that plague Sydney and Melbourne.

QBE’s Australian Housing Outlook 2018-2021 states that Hobart’s median house price was $481,000 in June 2018, a 10.6% increase since June 2017.

The most notable growth happened in Brighton, a 17.3% increase in the past year.

Hobart City recorded a lower growth rate of 6.3% from 2017-2018.

The rental market recorded vacancy rates of 0.7% in June 2018, the same as in 2017.

Hobart Property Market Forecast 2019

Property experts predict that growth will continue in 2019. However, Hobart could experience a slight property market growth reduction in the next two to three years.

QBE Australian Housing Outlook predicts a +8% price growth for 2019-2021, thus bringing the median house price to $520,000. The median unit price is expected to increase to $420,000 which is a +9% rise.

Forecasted figures may vary depending on political climate, economic growth, and bank interest rates. Here are some of the factors that might affect Hobart’s property market in 2019.

+5% – +9% growth if the cash rate remains the same and the economy slows down, and Labor government

+4%- +7% and a 0.20% interest rate increase, no change in cash rate and Labor government

+5%- +9% with a 0.50% rate reduction by banks, and a Labor government

If Labour  government is elected in 2019, this could harm the property market; however, as it stands, Hobart’s property market looks relatively healthy.

Top Suburbs To Invest in Hobart 2019

As a potential property investor, understanding the best areas to invest your money is crucial. Here are some of the suburbs to consider when thinking about investing in Tasmania property.

Focus on affordable suburbs north-west of the city such as Glenorchy and Moonah. These areas provide good vacancy rates and strong rental returns. For example, Glenorchy’s rental yields are 5.4% currently, and the median house price is $365,000.

The outer ring suburbs are often the best choice because they offer the most substantial growth potential and they are less costly.

Kingston is a decent option if you are looking South of the city, with strong price growth, affordability, and 4.7% rental yields, it is a viable choice for potential property investors.

Lindisfarne is also a suburb to watch in 2019, North-east of the city, it provides, excellent living conditions, and affordability. As well as healthy rental yields of 4.6%, unemployment and crime rates are relatively low as well as good schools, shops, and efficient transport links, Lindisfarne is another excellent choice for potential property investors in 2019.

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