How Homeowners Can Benefit from Australia’s Rising Property Prices
Takes only 4 minutes
12 Nov, 2024
Updated: 12 Nov, 2024
Australia’s housing market has soared to record highs, with the total value of residential property now at $10.9 trillion – a $225.9 billion increase over the June quarter of 2024, ABS data. The national average home price is $973,300, rising by $15,600 from the previous quarter.
Except for Victoria, each state and territory has enjoyed property value gains:
- NSW: $1.222 million average, up $11,500
- Queensland: $885,400 average, up $30,500
- Western Australia: $816,000 average, up $47,700
- South Australia: $800,400 average, up $32,400
- Home Equity Loan or Line of Credit: A home equity loan, typically at a relatively low interest rate, can be used to fund renovations, debt consolidation or other investments.
- Deposit for a Second Property: If you’re interested in investment, use the equity as a deposit on a property in an emerging suburb, expanding your portfolio.
These rising prices are good news for homeowners – if you know how to use them to your advantage. Here are some key strategies for turning high property prices into financial gain.
How to Make the Most of Rising House Prices
1. Assess Your Property’s Value Increase
Before taking any action, determine how much your home has appreciated. Many mortgage brokers or banks can provide a property report, showing recent value increases and insights that will guide your decisions on financing options or home improvements.
2. Leverage Your Home Equity
Rising prices mean increased equity – the difference between your home’s current market value and the remaining principal on the loan. This equity can be a valuable tool:
3. Consider Selling for a Profit
With buyer demand outpacing supply, selling in today’s market can yield substantial gains. Whether you’re downsizing or cashing in on your property’s appreciation, this strategy allows for profitable reinvestment or saving for future goals. Be mindful of capital gains tax if applicable.
4. Explore Refinancing for Better Terms
Increased equity and high property values may improve your chances of refinancing at a lower rate or reducing monthly payments, freeing up cashflow for other priorities.
5. Upgrade or Downsize Strategically
The current conditions make it an ideal time to sell and move up to a more desirable property or downsize to a more manageable one, taking advantage of the favourable prices to align with personal and family needs.
6. Tap Into the Strong Rental Market
Rising prices have made homeownership challenging for many, boosting demand for rentals. Converting your home to a rental property could secure a steady income, especially as the national vacancy rate remains extremely low, at 1%.
Why Now is the Best Time to Act
Market conditions are dynamic, and today’s favourable environment may not last. Potential interest rate hikes, policy shifts, and economic changes could affect Australia’s housing market, limiting homeowners’ opportunities to benefit.
Acting now allows you to lock in advantages, whether through refinancing, leveraging equity, or making strategic investments while conditions remain favourable.
Need guidance? Our expert mortgage brokers are here to help you make the most of rising property values. Call us at 1300 889 743 or enquire online, free, today.
