- Recent first-time property buyers keen to invest
- Some property owners have significant equity to reuse
- Investment lending still remains low historically
First home buyers reached a near record peak in January last year with many of these property owners now also sitting on sizeable capital growth after only one a year or two, courtesy of the extraordinary market conditions we have experienced.
Of course, this won’t be the case for every one of them, depending on where and what sort of dwelling they purchased.
However, with double digit growth recorded in most areas of the nation, many will have seen the equity in their properties grow by a significant figure.
In fact, some homeowners may have experienced a $100,000 or $200,000 uplift in the value of their homes in a relatively short period of time.
With this being a reality for some property owners, we are starting to receive more enquiries from first-time investors who are keen to recycle that equity into an investment property.
The thing is, while they were seeing the value of their homes increase, the volume of investors active in the market has also been rising.
In fact, according to the latest Australian Bureau of Statistics (ABS) Lending Indicators, the value of investor loans hit a record $10.3 billion in December due to the strong property price growth over the past year.
However, while investor lending has been growing over the past 14 months to now represent about one third of the value of new housing commitments, they still remain below the peak in 2015 when they accounted for 46 per cent, according to the ABS.
There is no question that there continues to be robust competition for properties amongst investors, who are keen to make the most of their equity positions as well as the favourable yields on offer in many locations.
For would-be investors going it alone this means that is can be tricky to secure a property because they are up against more seasoned operators, including buyers’ agents.
Amongst our cohort of clients are a number of former first-time investors, who opted to work with professional buyers’ agents after struggling to secure an investment holding themselves.
As well as recommending strategic locations that are likely to offer superior capital growth in the years ahead, our assistance ensured that they were always in the running to become the successful purchaser – no matter how many other interested parties there were.
Sometimes, we walked away from a deal because the sales price reached a level that we didn’t believe was in-line with market reality.
Other times, we were able to secure them a property for a fair price, even when the vendor had a number of other offers on the table.
One of the reasons why we were able to do that is because of the strong agent networks we have in the investment locations where we are purchasing.
These agents know that we only work with qualified buyers who are ready and able to purchase a property, which removes the question mark around finance approval during the offer process.
Our clients, now the happy owners of an investment property or perhaps two, have told us time and time again that they not only found the process easy, but also that it removed the majority of stress from the transaction
On top of that, they were impressed by our guidance, integrity, and ethics, as well as our ability to communicate clearly and honesty within them whenever was needed.