For many of us, the change to our working environment has also changed the way we’re choosing to live which is also changing the investment environment.
Let’s take a look at the changes and their impact:
Changing work and life choices has seen a huge shift towards regional living as people are no longer tied to the cities for work and are exploring options that haven’t been on their radar previously – or have been on their “one day” list. This has led to huge supply shortages in places like the Sunshine Coast and never seen before capital growth in places like Byron Bay. Byron Shire’s median house price exploded in 2021 and overtook that of Sydney, jumping 47.8% to $1.7 million, according to the latest Domain House Price Report.
These changes mean that now, more than ever, you really need to know the markets you’re wanting to invest in so that you buy in areas of high demand yet you don’t overspend.
People are looking for more space in their home to work. A home office is ideal – or space that can easily be converted to an office or separate workspace is proving popular. In apartment buildings, communal workspace is highly sought after.
In many cases, people are also looking for more space to play at home- whether it’s indoors or outdoors.
Home design that takes these factors into account is smart and is showing vision and foresight – which will have an impact on demand.
International and interstate immigration
With the state and international borders closing for long periods of time over the past two years, population growth via international immigration and interstate migration have been almost non-existent. This has had a major impact on rental demand and capital growth in regions that are particularly attractive to just one demographic as that demand disappears once borders close.
The lack of international students has also taken its toll on rental demand in certain areas.
This is a “wait and see” scenario to see how things settle down once borders fully reopen and life returns to our new normal.
Demand outweighing supply
Whilst this is something we see fairly regularly in certain markets, we’ve never seen it on such a huge scale as we have in the past 12 months or so. Properties in areas of high demand are selling sight unseen. Buyers with finance in place are missing out time and time again. Developers can’t seem to get enough property to build on fast enough.
But both developers and councils in many locations have learned from previous lessons and are taking a conservative, planned approach so that they don’t end up with a flooded market.
What this means to the investor is that:
- there are less options available,
- more properties are being sold off the plan and this is where your greatest choice lies
- it’s imperative that you have finance in place.
Amongst all these changes, there are some things that remain the same – and that is the fundamentals of investing.
The fundamentals are:
- infrastructure investment
- population growth
- supply and demand
- your investing strategy
With these changes, the value of engaging a well informed investment property consultant is higher than ever. We are constantly researching what’s going on in the market, who’s building where and why, and we often have access to properties before they are released to the general public.
If we can help you invest in a property, we’d love to!