Interest rates, cost of living and rentals are rising; should we sell, buy rent?
- Rent is increasing up to 25% over the past six months and will continue as rental properties supply is very tight.
- Interest rates have gone up and will rise more, along with the cost of living.
A Dilemma: what to do over the next few months and in 2023?
- Sell your properties?
- Buy more investment properties?
- Buy your new home?
- Keep renting?
In various regions such as Sydney, Central Coast, New Castle Region, Gold Coast, Sunshine Coast, and many more, the asking advertisement rents have soared by more than 20 per cent over the past year. In addition, in NSW, the proposed stamp duty reform would tip some new investors and new home buyers towards buying rather than renting.
Not necessary to buy your own home if you are not in the position to pay high-interest rates without rental income or tax deduction.
The property investors are always interested to know what the interest rates will do to the prices of property in 2022/3, and whilst none of us has a crystal ball in general, we are still seeing some growth in the various pockets identified with low risk.
There is always caution when interest rates start to climb together with the high inflation, cost of living and the potential recession; however, people will always continue to buy and sell regardless of the market conditions. With fewer buyers and low competition, we have the power to negotiate and buy bargains. If interest rates continue to climb along with inflation, it will make more sense to buy a property sooner rather than later, which will make your real estate asset more expensive?
On the other hand, when there is a change in the market in general, many sellers tend to sit back and wait to see what’s happening, which means there is less stock available for buyers. This lack of property stock creates competition with buyers, which usually results in higher prices. With a shortage of good-quality properties, it might be a good time to sell?
From an investment perspective, we can do our best to redirect your next investment to the lowest equity risk area, increasing your likelihood of growing your money or protecting it.
There are different scenarios for owner-occupiers, investors, and tenants, depending on each person’s circumstance. What would you do?