Investment Property financing just got easier

March 31, 2021

No matter what the prevailing economic conditions are, the starting question for most property investors is always, “How will I get finance?”.

As Australia comes out of its Covid-induced economic crisis, a number of very significant factors are making the answer a whole lot easier.

Australia comes out in excellent shape

Let’s start with a quick update. In terms of managing the health and economic fallout from the pandemic, Australia has done, and continues to do, exceptionally well, and is currently being hailed as one of the best performing developed countries in the world.

Our Covid-19 case numbers are next to zero, social and business restrictions are being lifted, life is returning to (almost) normal. Within this buoyant atmosphere people are exercising their pent-up demand for just about everything – except international travel!

In the property market, conditions are returning to boom times not seen for a decade or more. Some of this is due to people having more money saved and are keen to spend or invest it. But a more important driver of the property market boom is the actions being taken by Australia’s financial regulators.

Regulators to the rescue

The Reserve Bank of Australia has not only reduced interest rates to an historic lowest level ever, but the Reserve Bank governor has announced there are no plans to lift interest rates before 2024. This window of ultra-low interest rates over such an extended period into the future is fuelling the confidence of both home buyers and investors.

The evidence for this is seen in auction clearance rates of 80% and above in Melbourne and Sydney, and home lending by banks at an all-time high. Currently, most of this new lending is for home buyers (occupiers) but investor lending will not be far behind as confidence quickly returns to the investor community.

The next great driver of this boom is easier access to finance, and this comes from our banking regulator, APRA. Following the recent banking Royal Commission, the regulator severely tightened the criteria which banks must adhere to for lending to home buyers. These criteria have now been eased, resulting in not only many more people seeking home loans, but gaining approval for a loan application is now considerably easier than was the case even 6 months ago!

These three factors, outstanding post-covid economic performance, ultra-low interest rates and easing of lending criteria, combine to make purchasing property much easier for many more people. This is course, leading to an unprecedented escalation in house price values.

The time to act is now

But for the quick investor, now is very clearly the time to get into the market. Demand for housing (both owned and rental) is in for a long run of sustained growth – ideal conditions to create cashflow AND capital gain.

Don’t wait any longer. Contact Resimax Group now to see how you can personally benefit from these ideal conditions to secure finance for your investment property.