The global economy and its impact on the Australian property investment market

With the rise in remote working opportunities and the ongoing worldwide pandemic, homes have become safe havens, offices, schools, meeting rooms and more. This trend has meant that renters are looking for ideal homes and are happier to pay a premium for them.

Combined with shifts in the global economy, this has made it an opportune time to consider purchasing an investment property and leasing it out.

Let’s highlight the effect of global inflation rates on the Australian real estate market and how this may affect your opportunities of adding an investment home to your portfolio.

The state of global interest rates and inflation

This time last year, economists and major banks predicted that Australian housing prices could drop by as much as 32% – a bold forecast that heavily affected the real estate industry. Today, however, there’s no sign that housing prices will fall any time soon.

Global interest rates and inflation, particularly in the US, have resulted in a heated housing boom in Australia, with no signs of slowing down any time soon. With domestic interest rates as low as they are, now is a great time for property investors to capitalise on great market conditions before they change.

With interest rates expected to increase at some point in the near future, this could potentially have a future impact on investments. Although there is no certainty around when or how much interest rates will increase, the International Monetary Fund is already warning that the rise of US interest rates could lead to great irregularities in the Australian housing market.

Due to the unprecedented nature of these current trends, however, it’s difficult to predict just how much of an effect the increase in interest rates could have. So, it may be a smart time to act.

Now is the best time to invest in a property to lease

With so many uncertainties in the future of the housing market, now is a good time to consider your options around purchasing an investment home and leasing it.

Here are just some of the benefits available to you right now:

  • Low Interest Rates

At the moment, Australian interest rates are at an all-time low. This means that if you were to purchase now, mortgages repayments are far more affordable. This will help savvy investors get ahead of their loan faster in the earlier years as rental income comes in.

  • Low Rental Stock

There are fewer rental properties available at the moment, which means there is a high demand for quality homes from quality tenants, all hunting for the perfect property – especially going into the warmer months and across Sydney’s Northern Beaches. By purchasing now, you’ll have access to more people and a strong potential rental price.

  • Reduced volatility

With the volatile, unpredictable market conditions at the moment from the global and US economies influencing our own, purchasing real estate can help manage this. This is one reason why people invest instead into properties, as they’re less volatile compared to shares and similar options.

As the movement of the market remains unpredictable, buying an investment property can also offer you financial benefits too.

What the low interest rate means for property investors

If you’re planning to invest in property in Sydney’s Northern Beaches, we can help. With such low interest rates, you may have access to mortgages that better suit your budget.

If you need to speak to a financial specialist about this, contact our Upstate financial team today to discuss your options.

Find yourself in a better place sooner

Speak to your local Upstate team today and we’ll help you find the perfect investment property for you while the market is offering you so many favourable conditions.

We can also help you manage it too, to earn the best return on your investment. At Upstate, we have a trusted team of property management and leasing specialists. When it comes to managing and renting out your property, we have your back throughout every step of the way – from advice and guidance, to a stress-free everything.

Give us a call on 02 9971 9000 or click here to contact us.

We look forward to chatting with you soon.

Your local Upstate team


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