6 Reasons to buy property in 2007

Is 2007 a good time to get back onto the property investing bandwagon?  

Have you been sitting back riding out the property downturn just waiting for the right conditions to launch yourself back into the property market? Then look no more, 2007 is ripe for the pickings if you have the nouse to invest in the right locations. 

In the three year lead up to 2007, property investors in Melbourne and Sydney have been served three heavy blows which includes a number of consecutive interest rate rises, falling yields and a flattening out or negative growth in property values.

2007 will offer solid opportunities for the savvy property investor who is willing to look further than their backdoor for the right deal.

Why is 2007 the time to get back into property investing….

1. Interest rates - the reserve bank has not increased interest rates in the last month possibly signaling an end to the rise in interest rates for a while. St George Bank is signaling that they believe that the interest rate movement is down by offering a 5 year fixed interest rate of 6.95%. Other lenders are also predicting interest rate reductions in the later part of 2007.  This welcome respite from the interest rate rises coupled with improving yields will make it more attractive for investors to get back into the property market. 

2. Yields on the rise - Sydney has displayed upto 20% increase in rents over the last 12 months with forecast increases in some sought after areas of upto 40% this year.  Lack of quality stock and high demand has pushed and will continue to push yields higher.

3. Low vacancy rates – most capital cities are reporting vacancy rates of 2% or less, which is reflective of the high levels of migration, coupled with the inadequate spending on housing infrastructure and the lack of government land releases especially in NSW. Predictions in Queensland, where 1,000 families per week are moving across the border, are that housing demand in 2007-8 will out strip supply.

4. Housing affordability is low – for 2007, this alone will put enormous pressure on the available stock of rental properties. The number of people now renting has skyrocketed to around 32% with predictions that it will continue to grow. Although the federal government has extended the first home owners grant it isn’t enough to stop property prices still being out of reach for many Australians.

5. Melbourne/Sydney primed for growth – these capital cities have suffered over the last few years.  December 2006 showed that Sydney was the poorest performer in the country followed by Melbourne.  According to John Edwards from Residex, “Sydney’s future prospects are better than any other state”.

6. Hot Spots – 
* WA – Mining towns such as Newman, Geralton, Port Hedland, Karratha, and Wickham are driven by new and massive expanded mining infrastructure projects.
* Adelaide - Especially around Unley Park, Burnside, Norwood and Glenelg. 
* Melbourne – Frankston, Hampton, Mornington, Torquay, Footscray.
* Sydney – Waverley, Kirribilli, Paramatta, Manly
* Qld – Rockhampton, MacKay, Moranbah, Townsville driven by the resources boom and intrastate migration.
* NT – Darwin driven by resources boom

There are an abundance of opportunities in the market place for great property investment purchases.  Make 2007 your year!