Why 2019 is looking good for investors

With the banking royal commission, Labor’s negative gearing plans and financial experts predicting a softening market, if you believe what’s in the media, you’d never invest in property; it’s all bad news.

However, we’ve been in the business for over 40 years, so we are proof investing in bricks and mortar works in spite of what’s reported in the media!

There are always opportunities to be found regardless of the economic and political climate, and what the ‘experts’ predict.

Here’s why 2019 is looking good for the canny investor:

Looking at the positives

  • Low interest rates

The RBA has just announced its keeping rates at 1.5 percent. Yes, they will go up at some point, but take advantage of the record lows while they last.

  • Desirable place to live

The Newcastle Herald recently reported apartment rental prices were rising faster than other regional markets. There’s a reason for this – Newcastle is a desirable place to live. The city centre is being rejuvenated, we have a university and major sporting events, and our city is just two hours away from Sydney. There are more employment opportunities and the beautiful Hunter Valley is on our doorstep. People want to live here – and they need somewhere to live!

  • Investors holding back

With negative stories hitting the headlines, there are a lot of potential investors holding back – this gives others the opportunity to step in at a time when the market is relatively quiet.

Overcoming the challenges

  • Source the finance

The royal commission has made banks nervous and they’ve tightened their lending criteria in some cases – so shop around. Mortgage brokers can often can source mortgages from other reputable financial providers for those whose situations don’t fit the norm. If your finances are in order, you have a good credit rating and you have a good plan, then the chances are, a mortgage provider will look positively on you.

  • Labor’s negative gearing plans

If Labor is elected in the next election, it has controversial plans to end negative gearing for future investment properties, with the exception of newly built homes. It also plans to reduce the capital gains tax discount from 50 per cent to 25 per cent.

Why worry about Labor’s plans now? Who knows if it will get into power and whether it will actually follow through on these plans once it is in power?

Furthermore, its plans do include a grandfathering provision – meaning now is the time to buy an investment property to ensure you benefit from the rules as they stand.

Plan for the unexpected

Yes, at some point interest rates will rise. But do your figures and make sure you have a bit of extra money put away to compensate for this. Talk to your financial advisor and discuss the possibility of overpaying your mortgage or other saving options.

As for investing, there is always a risk in any form of investment. Just ask anyone who has bought shares in a bank – according to some sources, investors have wiped about A$40 billion from the market value of Australia’s four largest banks and AMP in the nine months since the inquiry began.

The truth is, good news doesn’t sell, and experts are always going to predict the worst case scenario. The key to being a successful investor is to assess the risks and minimise them. Speak to your financial specialist who will be able to advise on what the risks are and explain how you can reduce them.

We believe go above and beyond simply managing properties; we give ideas and all the information to help people realise their financial dreams 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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