Property Investing

You may have noticed that the narrative surrounding interest rates has begun to shift slightly. For the first few months of this year, the overwhelming consensus was that we’d see some action on rate cuts within the latter half of 2024. We even released an article back on the 11th of March, summarising and commenting upon the big four banks’ predictions for interest rates.

There is an endless variety of metrics used to explain the property market. Vacancy rates, building approvals, population growth, annual price growth – the list goes on. All with varying popularity, each of these measures help to describe supply and demand in different ways, which in turn helps us to forecast the direction of a market. Of course, prices are created by that intersection of supply and demand (the fancy term for this mechanism is ‘price discovery’).

In last week’s article, we explored the concept of liquidity within the property market – why it’s important to consider, and what the risks are for those who don’t. This week, we’re getting a bit more practical. How should you account for liquidity when purchasing an investment property? Understanding liquidity and its impact is crucial for making informed investment decisions and optimizing returns, especially in the inherently slow-moving property market.

Amidst the affordability crisis, ‘rentvesting’ is reshaping how young Australians and first-time investors approach the property market. Traditionally, the homeownership dream was simple – buy a home, and live in it. However, as property prices soar, a growing number of people are adopting the rentvesting strategy. This unique approach allows individuals to rent where they want to live – often in areas that suit their lifestyle but may be too expensive to buy – while owning investment properties in more affordable markets.