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Property Opportunities in the Booming WA Economy
At long last, things finally appear to be looking up! WA is heading towards a budget surplus, the resources sector is ticking along nicely, the property market is turning its fortunes around, the national unemployment rate is falling, and consumer confidence is on track to return to (and eventually exceed) pre-COVID levels. As such, savvy homeowners, investors, and businesspeople are lining up ways to make the most of this newfound optimism. In this article, we’ll explore which property-related opportunities are coming around in this economy, and how you might be able to take advantage.
Investment Property Opportunities
With interest rates being slashed across the board, there have been very few times where getting into property investment has been more attainable. What’s more, low interest rates paired with WA’s critically low rental vacancy rate creates a perfect recipe for high rental yields and little to no trouble finding suitable tenants for an investment property. Traditionally, investment property loans come in at a higher interest rate than owner-occupier loans, however this gap isn’t as significant as it once was. Even in spite of this disparity, home loan rates are so competitive now that the difference is fairly trivial at the end of the day.
Upgrade the Family Home
If your family is growing and you’re running out of room, what better time to take advantage of the current market conditions. Given the sharp upturn in property values in some parts of Perth, you may even find that your family home is worth more than you thought, and revaluing/refinancing the home could potentially unlock significant equity. Using this as an extra resource and combining that with the generous finance options at your disposal, what may have been previously unattainable in finding a bigger place to live may finally be a viable option.
Alternatively, you might be happy with the location you live in right now, and simply need to make improvements and extensions on your existing home to cater for your growing family. An extra bedroom, extension to the outdoor area, addition of a double lockup garage, installation of a swimming pool – all great inclusions to improve the experience of living where you are, and a great long-term move to increase the value of the property. Whatever your decision, revaluing, refinancing and unlocking equity might be an option for you.
Downsize & Unlock Cash
Maybe you’re a little further down the line – the kids have moved out and now you’re wandering around a big family home and considering what to fill it with now that it seems a little emptier. As the demand for property continues to rise and growing families need more room (as above), downsizing is becoming an attractive proposition for those with less need for space – and the advantages can be significant.
For instance, let’s say you sell your family home for $750,000 with $165,000 still outstanding on your mortgage. Assuming a 2.5% commission for the real estate agent, $800 in conveyancing fees, and $2,500 on advertising, your net position after all is said and done comes in at a touch above $580,000. From there, you could buy a smaller property outright, potentially with some cash left over; or even take advantage of the Government’s downsizer contributions incentive, whereby you can contribute up to $300,000 (non-concessional) from the proceeds of the sale of your home to your superannuation, and reap the rewards when you retire.
Moving over to the commercial property market for a moment, there’s no shortage of fantastic opportunities in this space either. For businesses that are currently renting, sub-3% interest rates, valuation fee waivers and reductions to establishment fees are just a few of the carrots being dangled by some lenders. One lender even has a 30-year commercial property term, which is by no means commonplace. If you own your commercial premises, the above offers are still very attractive in terms of reviewing current lending facilities and potentially looking at refinance options.
How MP+ Can Help
McKinley Plowman’s Finance and Property teams can assist you with our competitive tendering process, access to over 30 lenders, decades of experience, and a commitment to finding each client the best possible deal for the circumstances. When navigating finance and looking for property opportunities, lenders and the property market, the importance of having a finance professional on your side cannot be understated. Give us a call today on 08 9301 2200 (Joondalup), 08 9361 3300 (Victoria Park) or contact us via our website.
Please note the information provided within this article is general of nature and is not a personal advice recommendation. Prior to considering strategies discussed in this article we recommend you seek personal financial advice. Please be aware that, without the benefit of financial advice, you may be committing yourself to financial strategies or products that are not appropriate for your overall personal situation, needs and objectives.
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