Is 2010 a good year to purchase an investment property?
With house prices expected to soften early this year and forecasted to pick up later in the year, 2010 looks like it could be ideal for property investment. Nevertheless, it is important to be aware that these predictions come in spite of solid growth recorded in the house price index.
There was a rise of 5.2 percent in the Australian house price index during the last December quarter. This can be compared to the same time last year which was 13.6 per cent lower than last December’s figure and approximately 2 per cent higher than the median market forecast.
While it was clear that house prices picked up pace through 2009, it is evident that they began to soften towards the end, especially with the expiry of the Government’s first home owners boost. In early 2010 property prices will be constrained as mortgage rates rise. This is partly due to the fact that Australia has not been producing enough homes to balance our rising population, however we should see a correction of this during 2010. Judging by this, we can expect to see a further softening of house prices in the market for the next few months. If this is the case, this potentially makes it an ideal time to buy investment properties.
When thinking of investing in property there are quite a few aspects that need to be considered including:
• Positive and negative gearing
• Raising of funds, will it be a cash transaction or will you need to borrow
• Cash flow- does your rent cover your repayments?
• Tax e.g. Income Tax, GST, Capital Gains Tax, tax deductions etc.
• Conveyancing costs and
• Other pre-purchase costs.
Quinns can assist you with personalised advice for your individual investment property needs. To find out more about how The Quinn Group can help please call us on 1300 QUINNS (784 667) or click here to submit an online enquiry.