Some of the broader questions I hear most frequently are what is happening to the property market, should I invest, and where should I be looking?
Although I am not a property economist, I always encourage people to read about the property market, gain clarity around the drivers within the market, and gain insight into what or where you should buy.
One of the most important factors is supply and demand and what this does to the property's value
Putting all of Australia under a generalized blanket regarding how property sales are performing does not give you a clear or accurate picture. Even on a state-by-state basis, each market will act differently. The media oversimplifies its property coverage and is usually quick to predict a gloomy outlook.
In areas all over Australia, there are pockets where you can find properties, and as my nan in law used to say, Belinda, it's happy hour somewhere' as she cracked open her 4.00 pm beer.
Research can help you, and websites such as the Australian Bureau of Statistics have plenty of data and information about Australia relating to property and areas of growth.
From 2019 to the last quarter of 2021, we saw growth that hadn’t occurred in decades. Sydney had 4.1% growth, Melbourne had 3.9% growth, Brisbane had 9.6%, Adelaide had 6.8%, Perth 2.9 Hobart 6.5%, Darwin 1.5%, and Canberra 6.4%.
The media has wasted no time stoking fears around the rise in interest rates., declaring the market will crash and no further growth is possible. Remember, it’s happy hour somewhere, and supply and demand will drive the market and not the news.
Sydney and Melbourne have slowed down, and real estate agents say vendors have to adjust price expectations that they are still hanging on to from 2021. Prices have only slightly changed from March or August in 2021, which saw the element of FOMO lead to fierce bidding at auctions all over the country.
The topic of interest rates generates a lot of strong emotions, and even if we see a rise of even 1%, it is low. Some people will take what they hear from the media and convince themselves that now is not the right time to invest or renovate. This inbuilt excuse keeps people stuck and generates headlines and fear-based stories for the media.
Take a different approach by doing your research, examining the data, and creating your picture of what is possible.
Four thousand people moved from NSW to QLD last year, and demand is still high in QLD. The move further north also happened in Victoria. This trend continues, and with Brisbane winning the Commonwealth Games, it will experience further growth as an emerging city with global potential.
Elections can affect buyer behavior, and some people will wait it out, as it can affect people’s willingness to enter the property market. Others will carry on and find a deal regardless.
Prices in Sydney and Melbournes have come down slightly; Tasmania and the Northern Territory will be solid but not exceptional over the next 12 months. Western Australia is an area that keeps coming up for discussion in property circles and groups, and property economists think the state is worth a look.
Statistics around rental income are as follows; Brisbane is set to go up 12.2%, Sydney 9.0%, in the ACT 9.9%, Adelaide 9.5%, Hobart 9.4%, Darwin 5.2%, Melbourne 5.1%.
If you were looking for a nudge to get into investing, consider those statistics. If you can take yourself out of the rental market, and invest instead, take action to take advantage of these conditions.
Another aspect of investing the media has put its negative spin on is renovation. It’s too hard to find tradespeople, the cost of materials is too expensive, and it’s just too risky. The reality, once again, even amongst my students, is a very different one!
You may not be able to buy your favourite product, so you choose another item that you can get and continue making progress in your renovation. This shift in mindset helps my students make progress and not get caught in a negative spiral that takes away momentum.
Speaking to stockists to ask what they have in stock gives you the chance to continue and increases your knowledge about alternative products, should they be needed.
If you are renovating, ensure you select a project with materials that won't limit your progress or stop you from continuing. For example, choose a home that may not need large amounts of timber for an extension.
As a strategy, a quick cosmetic flip that does not include expensive materials, eating away at your budget is a way to make money until the supply of these materials improves.
Some builders have had to delay the start of projects due to materials not arriving. If you are doing a cosmetic flip, a builder may take on your project in-between other jobs and will be happy to be occupied on site.
The media will always add to the noise, causing doubt to keep selling drama. Investing and renovating with a strategy is still possible if you take on a mindset of capability and flexibility.
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This blog was written by the RARE team
Team RARE are passionate about renovations, interiors and
sharing our favourite DIY tips and tricks with our community.