A young woman who runs a successful property investment business has revealed how she had to choose between a proper meal and entering the difficult property investment market.
Maggie Zhang, from Melbourne, works as a healthcare management consultant and also runs her property company, which now includes six properties, with a business partner.
Her purchases include her own home in Melbourne, a unit in Heathmont she is renovating with a friend, and rental properties in Broadmeadows and Frankston.
“I was happy to dine on brown rice, baby broccoli and chilli sauce for a year when things were tough, rather than miss out on a property opportunity,” Ms Zhang told real estate.com.au this week.
“It wasn’t easy, but I’m very glad I did it.”
Maggie Zhang said she only ate brown rice and broccoli for about a year for dinner while using her money to invest in property, but she’s glad she did.
Ms. Zhang said that the series of interest rate increases that were implemented between November 2020 and November 2023, which raised the cash rate from a record low of 0.10 percent to its current level of 4, 35, were particularly hard.
But he added that now that inflation appears to be slowing, most economic analysts believe interest rate cuts will come this year, and that should lead to better conditions for borrowers.
“I think now is a very good time to enter the market, investors are really aware that rate cuts are imminent, although no one knows when,” Ms Zhang said.
The big four banks are forecasting rate cuts, with the CBA suggesting there could even be three 25 basis point reductions by the end of the year.
The bank’s head of Australian economics, Gareth Aird, said rate cuts would be likely this year as inflation approaches the central bank’s target band of 2-3 percent.
“The six-month annualized pace of price increases is on track to be 3.2 percent for the current quarter… just outside the target band,” he said.
He added that rate cuts would be necessary as the RBA’s focus this year was on concerns about the unemployment rate and consumer spending rather than inflation.
High interest rates in recent years have forced some landlords to sell, which in turn has forced tenants to look for a roof over their heads elsewhere, making the rental market even tougher. .
Suburbtrends research found that in January and February this year hundreds of ex-let properties came on the market in Melbourne alone.
Mount Waverley had the most with 270, followed by South Yarra with 160, Point Cook with 122, Richmond with 108, St Kilda with 102 and Hawthorn with 93.
But despite the cost of living crisis and rate rises, Australian homes added around $12,000 in value in the first three months of the year, new data has revealed.
The latest data from CoreLogic, released Tuesday, shows that home values so far this year were rising faster than the pace of growth occurring at the end of 2023.
However, that 1.6 percent jump in the three months to March was half of the 3.3 percent quarter-on-quarter price increases that were occurring in mid-2023.
“Rate increases, cost of living pressures and worsening housing affordability are factors that have contributed to weaker housing conditions since the middle of last year,” CoreLogic research director said , Tim Lawless.
“However, a shortage of housing supply relative to demand continues to maintain upward pressure on home values despite these headwinds.”
All capital cities except Darwin saw a rise in house values in March, which fell 0.2 per cent.
Ms Zhang warned that interest rate cuts are coming, which will ease conditions for property investors (pictured, an auction in Melbourne).
The CoreLogic Home Value Index has increased $71,832 or 10.2 percent since January 2023.
Regional housing markets are also booming, although Victoria stood out with a 0.3 per cent drop in home values.
Home sales nationwide in the past three months were estimated to be 9.5 percent higher compared to the first quarter of last year.
As for rents, unit prices continue to rise faster than home rentals, but the analysis shows a gradual narrowing of the gap between housing and unit rental growth trends.
“A rise in rental yields coupled with the expectation that home values could rise and rental markets will remain tight for an extended period of time is likely to be seen as an attractive opportunity for real estate investors,” the Mr. Lawless.
However, he warned that with mortgage rates averaging six per cent, investors new to the market could expect to suffer losses on rent unless they “put down a sizeable deposit”.