There is a real confidence in the market at the moment. In the past couple of weeks, property investors had two reasons to celebrate:

1. Interest rates remain at an all-time low

The Reserve Bank of Australia has announced that in its Board meeting, it has decided to keep the cash rate unchanged at 0.10%. You can read the full statement by Philip Lowe (RBA Governor) on the decision here.

This means there will be still great deals to be had on your mortgage.

2. Labour has announced they will support the status quo for negative gearing and capital gains tax should they come to power

From claiming strata fees to maintenance, investing in property offers some very generous tax-deductible benefits. For some time now, Labour had indicated it would reduce some of these benefits if they came to power.

However, leader of the Labour party, Mr Albanese has now confirmed that Labour’s caucus had ratified the party’s new position, upholding the legislated changes to personal income tax and maintaining the existing arrangements for negative gearing and capital gains tax.

In an announcement made on 26 July, Mr Albanese confirmed that ‘an Albanese Labour government will deliver the same legislated tax relief to more than 9 million Australians as the Morrison government’.

President of the Real Estate Institute of Australia, Adrian Kelly welcomed the news, pointing out: ‘The vast majority of property investors are everyday Australians looking to provide for their own retirements who are also instrumental in providing the rental accommodation that is needed by the 27 % of Australians who rent their home.’

‘ATO data shows that the majority – just over 70 % – of investors own just one investment property.’

3. Increase in rental return

Property industry data analysist CoreLogic’s Rental Review for the June 2021 quarter shows despite rental growth slowing over the recent months, the latest figures take national rental rates 6.6 % higher over the year; the highest annual growth in dwelling rents since January 2009.

Regional rents continued to outpace capital city rents, rising by 2.7 % in Q2 compared to a 1.9 % rise in capital city rents, both down quarter-on-quarter. Despite the easing in growth in recent months, regional Australia’s annual rental growth hit 11.3 % in June 2021. This is the highest annual growth result on record, with the CoreLogic rental index commencing from 2005.

4. Low vacancy rates

For the last 12 months, Newcastle/Lake Macquarie vacancy rates have been hovering around 2 %. But we do better than this; we have generally had less than 0.5 % vacancy rates for the last 12 months, and in May, we even had zero vacancy rates.

Everyone needs somewhere to live, and investing in property really has stood the test of time. Why don’t you do a bit of a review of finances, talk to a financial specialist and see what they come up with?

If you’d like to know more about property investment, or if you already have an investment property and you’d like to know how you can enhance it to increase rental return, please do get in touch.

Quality property management doesn’t cost you money, it makes you money; with over 40 years of experience behind us, we’ve helped thousands of people achieve their financial goals through property.

Give us a call on 02 4956 9777, send us an email to mail@newcastlepropertymanagement.com.au  or pop into our Cardiff office for an informal chat.

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