House prices still rising, but slow down evident.
Although residential property prices continue to grow, there has been a reversing trend; in particular Sydney and Melbourne. Yes, these two cities have still grown, but their individual growth rates have declined, signalling a possible slow down in these markets.
The Capital city average last quarter was 1.9%, compared to 4.1% in the last December 2016 quarter.
Quarterly and annual price changes for each capital city can be found below:
|
City |
Quarterly growth | Annual growth |
|
Melbourne |
3.0% |
13.8% |
|
Sydney |
2.3% |
13.8% |
|
Hobart |
1.8% | 12.4% |
|
Canberra |
1.3% |
7.9% |
|
Adelaide |
0.8% |
5.0% |
|
Brisbane |
0.6% |
3.0% |
|
Perth |
-0.8% |
-3.1% |
|
Darwin |
-1.4% |
-4.9% |
| Capital city average | 1.9% |
10.2% |
This doesn’t spell relief for prospective FHO’s just yet, but with continuing low interest rates; it leaves a small opening for those that can save for a deposit.
As a broker, I am quite often asked by prospective clients; should we buy an Investment property, especially with record low interest rates available.
My reply has been if you were my son or daughter, I would always advise you to place additional funds available onto your Owner-Occupied property first and foremost. If possible pay this principal property off completely, hopefully making a capital gain; sell, and step up in quality by purchasing a better home to live in.
If the average couple having two incomes, can sacrifice one wage by placing it entirely onto their home loan; I believe they could have their home paid for between 3 to 6 years depending on the size of their original loan.
It is worth playing with one of my calculators on my website called:- “Extra Repayment Calculator”
When planning to save tax dollars by purchasing an Investment property, things to seriously consider are the interest savings on your principal home loan; and comparing that to possible tax benefits, after real estate agent fees, property expenses as well as interest payments on your Investment loan. Some might say, that I am doing myself out of possible deals by giving this advice? But building relationships with clients first, will always return a reward in the long run.
