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Four reasons to invest in property in 2022

If there’s any doubt that property investment has bounced back in 2022 – despite all the doomsaying during the pandemic – one only need look at the numbers.

In seasonally adjusted terms, the value of new loan commitments on total housing rose 2.6% to a record high of $33.7 billion in January 2022, which is an incredibly healthy 18.2% higher than January 2021.1abs.gov.au

For investor housing, there was an increase of 6.1%, elevating borrowing numbers to a record high of $11 billion.2abs.gov.au

Besides the fact that, before too long, a large percentage of the Australian population will be renters, here are four other reasons why investing in property this year is a wise move.

Growing property prices

In 2021, house prices in Sydney rose over 25.5%, 14.9% in Melbourne and 29.2% in Brisbane3propertyupdate.com.au – a strong reminder that property investments will only continue to grow in value. It also highlights that the Australian housing market’s price growth makes it an outlier in global terms, because it effectively outperforms even share-market growth.

Whether Sydney, Brisbane and Melbourne continue to deliver such big returns is up for debate, with many experts arguing that some of the biggest increases could come from regional markets. Either way, there are gains to be had.

International borders reopening

As international borders finally reopen, property investors can expect to see an increase in demand for rental properties, thanks to an influx of visitors arriving from abroad.

The return of foreign students to Australian shores will almost certainly see an uptick in demand for rentals close to educational institutions, with February 2022 showing an increase in unit rents across the board: up 8.7% in Darwin, 8.4% in Hobart, 8% in Sydney, 6.8% in Canberra, 6.7% in Perth, 6.5% in Brisbane, 6% in Adelaide, and 5.5% in Melbourne.

House rents have also increased during the same period: from an 11.3% increase in Brisbane to a 4.6% increase in Melbourne.

Increase in demand for holiday rentals

The easing of restrictions and opening of borders in Australia has seen a mad scramble for holiday accommodation, and this unprecedented demand has resulted in high prices, as owners seek to recoup the income lost during lockdowns.

Prices have increased by more than 80% when compared to late-2019, although the demand has been focused more on regional areas around the country, and less on larger capital cities.

Data collected by AirDNA, which tracks short-term rental bookings via Airbnb and Expedia Group, also revealed that renters are upsizing their rentals for health and safety reasons, with a general trend toward larger spending, and high demand cementing holiday rentals as a robust sector moving forward.4afr.com

Low interest rates

One of the greatest motivators for property investing in 2022 is the welcome fact that it has never been cheaper for investors to buy a property, due in large part to the fact that out-of-pocket expenses (also known as “net outlay”) haven’t been as low as they currently are in decades.59news.com.au

With Australian interest rates currently at the historic low level of 0.10 per cent, there has never been a better time to add to your property investment portfolio, or to get your foot in the door of the property market if you’ve decided to take the plunge with your first investment.6brokernews.com.au


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