Investor Growth In Real Estate Demands A Fine Approach From Buyers

The wild growth of the global real estate market has attracted a new sort of buyer. Bloomberg has tracked a gigantic AU$88 billion spending spree by investors on real estate throughout 2021 as they see money to be made from rising interest rates and low housing stock. Financing a property purchase in such conditions is difficult, yet not impossible. Taking a granular approach to the home financing process is the only way to ensure that gains are made in a sustainable fashion.

Finding your base

There’s considerable upheaval in the home mortgage market. The Guardian recently reported that Australian banks were lifting fixed interest rates despite RBA official rates being kept down. As always, it’s important to use a home loan calculator to estimate at every single stage where your money will go and what you can expect to pay. With the market so fluid and changing at such a rapid rate, this will become your best friend in working out any refinancing project.

An upwards trend

As fixed interest rates disappear, the banks will start to push overall rates up. ABC News highlights that there are no longer sub-2% fixed rate mortgages available at many of the major banks, and it’s likely they’ll continue to push their rates up. This is to counter the impact of inflation, and it’s seeing investors dive in.

Still a good deal?

While the market is not in an ideal place for buyers, you must consider where it is for renters, too. News.com.au have tracked a huge 8.9% rise in rents and now, with investors owning swathes of real estate, these prices may increase again as stock market hedgers take an educated guess on would-be buyers staying put and getting tied into higher rated rental agreements. As such, if you are renting, it may still be wise to move. Rental money is, of course, put into nothing – no equity is gained or mortgage paid down. With rents rising at exorbitant rates, it may be wise to cut your losses on a mortgage or other home purchase and save money in the long-term.

The situation is difficult right now in Australian property. However, there are options to be found. Renting may be the worst situation of all to rest in, so be wise about how you spend your money.