How will the fast rising interest rates affect buyers and investors

Fast rising interest rates to slow increasing inflation, has made it even more difficult for first home buyers. Some will no longer be eligible for a mortgage and even if they do qualify many are fearful that they won't be able to meet ever-rising mortgage payments.

However, this is not the case for investors. Under the current Australian tax system, investors can claim a tax deduction for the interest they pay on mortgages on their investment properties. Negative gearing allows property investors who make a loss to reduce the tax they pay on other income. Rising interest rates will boost the cost of negative gearing tax concessions.

Even better news for investors - although distressing for tenants - is that rentals are rising fast as demand for accommodation outstrips supply.

Before you either start or add to an investment portfolio, ask yourself if prices will fall further in the area you're interested in and by how much. If you wait too long you may miss the boat, as some analysts predict the fall will be short and sharp.

If you’re looking to get into the investment property market, Walsh Conveyancing can guide you through the conveyancing process.

Information courtesy: Moneymag

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