The RBA’s decision to keep the cash rate steady at 7.25% for the fourth month in a row could provide an opportunity for those looking to enter the property market to do so by purchasing an investment property before buying a home says Mortgage Choice.

While the decision to keep rates stable will be a relief for the approximate one third of Australians with a home loan, Mortgage Choice Bernie Foley said an increasing number of Australians are considering buying an investment property before a home in order to gain a foothold in the market.

“Purchasing a home before an investment property isn’t a rule, especially these days,” he said.

“In fact, more and more people are initially investing in property to rent out and then use the knowledge, tax breaks and equity gained from that venture to buy their own home. This occurs especially with younger people who want to get into the property market but may have been priced out of buying a home in the area they want to live in.

“The rental vacancy market remains historically tight, averaging 1.6% nationwide and with net migration at a 20-year high, the outlook for residential investors who rent out property is positive.

“Buying an investment property before buying a home can be a clever option – as long as the buyer researches rental yield, tenancy demand and capital growth potential, and their financial situation allows it. A clever purchase and a little patience could see these homebuyers-to-be residing in their desired suburb sooner than they think.

“Of course, potential investors should always speak to their accountant or financial advisor to determine the opportunities and risks involved”.

The latest Real Estate Institute of Australia figures show the most significant increases in rent for houses over the March quarter were recorded in Darwin (8.9%), Brisbane (6.7%), and Hobart (5.4%). For other dwellings, the most significant increases were in Hobart (6.5%), and Melbourne (5.4%).

Economists are divided as to what will happen over the next 12 months, though most appear to believe the cash rate will either remain steady or increase. The next round of quarterly inflation figures will be released on July 23, and the August cash rate decision will undoubtedly reflect the RBA’s views on this report.

Contact Mr Foley at this web address or call 08 9376 1922 For further information or to arrange an interview please contact: Bernie Foley F/B Licence No. 2832 Mortgage Choice 08 9376 1922