As Australian property markets continue to show signs of growth, homeowners may be wondering if now is the right time to dive into property investment. With the latest data from CoreLogic’s May Home Value Index (HVI), it’s clear that while challenges remain, there are plenty of opportunities for those looking to expand their wealth through property.

The May (HVI) reveals that Australian dwelling values rose by 0.3% in April, marking the third consecutive month of growth. This consistent upward trend points to an ongoing recovery, with home values reaching new record highs across several markets.

Notably, Brisbane, Adelaide, and Perth are the standout capitals, with values hitting new peaks. This signals strong growth in these regions, making them prime targets for property investors looking for long-term gains. However, not every market is back to its previous highs—Sydney, Melbourne, Hobart, and others still have some ground to cover. Here’s a quick look at how the major markets are performing relative to their peak levels:

  • Sydney: Down 1.1%
  • Melbourne: Down 5.4%
  • Hobart: Down 11.1%
  • Darwin: Down 2.7%
  • ACT: Down 6.4%

These declines present potential opportunities for savvy investors to enter markets at a lower price point while they remain below their peak values.

Regional Markets Show Stronger Growth

While the major capitals are seeing steady growth, it’s the regional markets that are leading the charge. In April, regional housing values saw a growth of 0.6%, outpacing the combined capitals, which saw only a 0.2% increase. The most impressive growth came from:

  • Regional SA: Up 1.5%
  • Regional WA: Up 1.3%

For homeowners considering property investment, these regions could present an opportunity for higher returns due to their relative affordability and growing demand.

Rental Market: A Strong Performer

The rental market is also showing positive signs. The national rental index rose by 0.6% in April, marking the third consecutive month of consistent growth. With rental yields rising to 3.52%—the highest in 11 months—property investors are seeing solid returns, especially when compared to other asset classes.

As rental demand continues to firm up, investing in rental properties can provide homeowners with a steady stream of passive income. With the national rental market growing, particularly in regional areas, now could be the right time to enter the investment game if you’re looking to diversify your income sources.

Lower Interest Rates and Housing Supply Issues: A Recipe for Growth

Despite affordability challenges, there is potential for modest growth in the housing market. The combination of lower interest rates and ongoing housing supply issues is likely to keep driving growth, particularly in areas where demand outpaces supply. Investors who act now could benefit from these market drivers, securing properties at competitive prices before prices rise further.

However, the outlook remains mixed. While the market shows signs of growth, challenges such as affordability concerns, cautious lending practices, and economic uncertainty may impact how quickly these gains materialise. It’s important for homeowners to carefully evaluate their investment strategy and stay informed on market trends.

The Case for Homeowners to Become Property Investors

For homeowners, stepping into property investment may seem like a big leap, but the current market conditions offer significant opportunities:

  1. Growth Potential: With consistent monthly growth and some markets still below peak levels, homeowners can invest in properties with the potential for future capital appreciation.
  2. Rental Income: The rise in rental yields provides a reliable income stream, with rental growth firming across the nation.
  3. Regional Markets: With regional areas outperforming capitals, there’s an opportunity to tap into less competitive markets with solid growth prospects.
  4. Interest Rates: Lower interest rates could provide the necessary conditions to secure affordable investment loans, making now an excellent time to purchase additional properties.

Considerations Before Investing

While the current market shows promise, it’s important for homeowners to carefully consider the following before diving into property investment:

  • Affordability: Ensure that the investment aligns with your financial capacity and long-term goals.
  • Lending Conditions: With cautious lending, make sure you understand your borrowing limits and potential repayments.
  • Market Volatility: Be prepared for potential economic uncertainty, which may affect short-term growth.

The Time is Right for Some Homeowners

The Australian property market is showing steady growth, particularly in regional areas and the rental sector. Homeowners looking to expand their wealth through property investment should pay attention to these trends, as they present a clear opportunity for growth. Whether you’re considering investing in capital cities or exploring regional markets, now is a great time to leverage the current conditions.

If you’re a homeowner thinking about property investment, now might be the time to explore your options. With growth in both housing values and rental yields, property can be a lucrative avenue to diversify your financial portfolio. Speak with a property expert or advisor today to start building your investment strategy for long-term success.