Newsletter Articles

Time to Buy

6-Point’s Managing Director, Simon Pressley, gives his blunt opinion of the property market.

The property market is ripe for buying. Now is a good time for those with the financial capacities, including first home buyers, to make their move. Notwithstanding the doom-and-gloom from the US, many local property analysts are predicting that house prices across Queensland are geared to increase again on the back of cuts to interest rates and stamp duty.

Historically speaking, the astute investor has made their biggest gains on the back of buying as the economy comes out of a down turn. Those who bought property back in 2002 made bigger gains than others who waited til 2004-2005, in the midst of the property boom hype. Despite interest rate rises, spikes in petrol prices and other commodities, the market has shown a lot of resilience with median house prices continuing to rise.

Why wouldn’t prices go up? Our population, especially in South East Queensland, continues to grow and there continues to be a shortage of housing. Whenever you have a situation with demand outstripping supply there is invariably a price increase. That (supply versus demand) is what is causing fuel prices to increase; it’s also why bananas were so expensive a couple of years ago following cyclone Larry.

Lending practises adopted by Australian banks remain sound and the Reserve Bank has begun to cut rates for the first time in seven years; there are more predicted. Stamp duty has been removed for properties under $500,000, and property prices in the June quarter have flattened. These factors have created building blocks for growth. With housing prices bottoming and interest rates stabilising, an important platform has been set for the market to move forward.

Now is the perfect time for home buyers.

And, if you still need convincing, take note of this stat; the medium house price In Queensland in the past decade has tripled from $135,000 to $390,000. Just imagine if you buy at the bottom of this next cycle with an average house price of $495,000 what your investment will be worth in 10 years from now!