Derived from a number of economic influences affecting the current landscape of the Australian property market, we at AllianceCorp have made it easy for you by addressing the key topics highlighted by the media in recent weeks.
In recent months, house and land packages have increased by approximately $78,000.
How will AllianceCorp deal with potential price increases?
Due to the countless disruptions derived from COVID-19, the collective building industry has absorbed a number of challenges pertinent to availability of materials, labour shortages, supply chain delays and much more, which has unfortunately resulted in significant price increases for consumers.
In order to effectively handle this, we at AllianceCorp make it a priority to protect the interests of our clients by reviewing all building contracts and proactively negotiating with our wholesale developers to minimise increases.
A recent example of this was experienced with one of AllianceCorp’s interstate developers. Clients were faced with material increases of up to $60,000 per dwelling, however based on the volume of properties purchased by AllianceCorp, we were able to negotiate and successfully reduced the increase to less than $15,000 per client.
The media is speculating that interest rates could increase by 2.5% in the next six months. Will this impact my borrowing capacity?
While rising interest rates will have some impact on your property portfolio, this is relative to current market conditions and is expected to correct over time.
Despite the recent interest rate rise of 50bps to 0.85 percent and the speculation of a further 2.5% increase, interest rates are still well below the long term averages! Between 1990 and 2022, Australian interest rates averaged 3.88 per cent, so the adjustment must be rationalised with the record low rates we have enjoyed over recent years (Source: Trading Economics). It is also important to note that higher interest rates are also being offset by the increasing rental yields as well as recent wages growth, so investors are well placed to absorb the additional expense.
For clients who work with AllianceCorp, we hold an extensive panel of Mortgage Brokers that hold access to over 30 lending options. With so many choices available, we can assure you a perfect option to suit your financial circumstance. In fact, many new clients take the opportunity to refinance their primary residence to reduce their monthly interest repayments!
Housing prices are tipped to fall by 11% over the next 18 months, how will this impact my property portfolio?
Collectively, housing prices may fall up to 11%, however after enjoying an annual house price growth of 26% – some correction is certainly expected in the current property cycle.
However, investors and home buyers must be made aware that these figures cover the broader market. There are markets within markets – which means that although key macromarkets may be experiencing a decrease in pricing, there will still be micro markets within that segment that will outperform the macro market – and they are the areas that AllianceCorp targets directly on a national scale.
It is also important to remember that property wealth creation is a long-term strategy that requires patience, education and diversification. By investing in key growth areas that satisfy our 80-point due diligence process, we can assure that the acquired properties will stand the test of time and deliver on your financial goals.
Large developers like Metricon, Condev and Probuild are facing insolvency. How does AllianceCorp determine who they partner with?
At AllianceCorp, we pride ourselves on looking out for the best interest of our clients and purposely partner with Developers who hold the same view.
Commonly, we seek to partner with medium size businesses as a way to mitigate business risks and undertake rigorous analysis to ensure a successful long-term partnership that derives value for all parties involved.Check out this excerpt from a recent webinar held between Managing Director of AllianceCorp Jason Paetow and research partner, Terry Ryder from HotSpotting on interest rates, current market trends and more!
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