Investors should partner with brokers

Investors are working closely with brokers as property prices continue to achieve record highs, says a Melbourne mortgage broker.

Loan Link’s Alma Zubovic (pictured above) said high property prices were not significantly affecting  her investor clients.

“We have seen prices increase nationally; however, Melbourne and Sydney markets have seen smaller price growth in the second half of 2021 and first half of 2022,” Zubovic said.

Zubovic said when looking at real estate, investors should consider a range of different properties.   

“I am a big believer in buying property lower than its intrinsic value, so I tell my investor clients to avoid off the plan or new builds which sell for premium prices,” she said.

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Zubovic said brokers can provide investors with tailored customer service whilst offering a suite of lenders from their panel.

“As brokers, there are lots of nuances we know about – different credit policies to benefit clients. If a client has a complicated borrowing situation, we are well placed to help navigate their options and minimise rejection and act in the client’s best interest,” she said.

Zubovic said some of her investor clients were concerned about property prices starting to fall.

“My younger clients, however, are soldiering on despite chances there might be an opportunity to buy for cheaper in the future,” she said. “They have solid saving buffers, strong employment and are factoring in future interest rate rises. I am seeing them become more selective when choosing a property and be more patient as the heat has left our local market.”

Zubovic’s advice to her investor clients was not to be too concerned about property prices fluctuating.

“The Melbourne market is showing signs of slowing down and we have moved from a peak rate of growth to a more sustainable, longer-term market,” she said. “My advice is always to be careful with your property selection. Cash flow is king, so if you have the means and confidence with your finances, there is no reason as to why you shouldn’t be able to buy now.”

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InvestorKit founder and head of research Arjun Paliwal (pictured below) said past property growth was never an indicator of future success.

“Melbourne and Sydney are cooling after unprecedented price growth, while Adelaide has been growing strongly,” Paliwal said. “Brisbane, Canberra and Hobart are largely doing well, along with many regional centres.”

Paliwal said interest rates would jump further in the coming three to six months as the Reserve Bank attempted to cool inflation.

“Naturally, many feel that this will drive distressed sales into the market, which mum-and-dad investors, flush with cash after sitting at home for the past two years, are well placed to capitalise on,” he said.

Paliwal’s advice to investors is to follow property data and look for nuggets of intelligence which help clients stay ahead of the market.

“The best scenario for returns is to get into a market in the early phase of pressure accumulation rather than at the end of a decade of strong growth, when it can quickly cool as we’ve seen from both Melbourne and Sydney in recent months,” he said. “Of course, there are no guarantees in property investment and indicators are just that. But you’ll always get a better feel for any investment opportunity by following robust data rather than trusting what happened yesterday, hoping for it to be repeated tomorrow.”