December Market Update

On behalf of the team here at Team Invest I would like to wish everyone a very Merry Christmas and happy New Year. It looks although we are in for a very hot Summer, so whether you are migrating towards the beach, setting up camp or staying in the city I hope you enjoy the well-deserved break and stay safe this holiday season. I would also like to take this time to thank everyone for their continued support throughout 2017. It has been an incredibly busy year of sales and marketing campaigns, it is always a pleasure doing business with you all.
What a year it has been…
Looking back, we had a few upsets along the way. The investment market stood still while the elections took place and then the long wait for the results, which has worried some investors. So far it has been the property managers who have had the hardest blow with the removal of the ability to charge letting fees to tenants. Somehow they will want to recoup that cost and the only way I can see this happening is to put it back on the property owner. Then we have insulation to take care of and potential building WOF’s to deal with in the future. I don’t mind the heating and insulation so much (my bill is well into the 5 figures for insulation this year) because to me it is improving your property, ideally increasing the rent ability of the place and therefore long term will have a flow on effect to its value. It does frustrate me when you provide a tenant a brand new heat pump and they refuse to use it as they don’t like the power bills, hopefully the governments $700 power grant will help with this and keep our properties healthier for everyone.
Currently the market is active but volume has dropped and we just seem to be working hard for each sale but then you get one where we had 4 offers this week on a property and it sold unconditionally, settling on Friday, all in a weeks work so, these deals are still happening. The upper investment end seems to have slowed with established investors putting their money into commercial if they have a big enough chunk to spend.
Looking forward to 2018, I believe it is a great market for investors to be buying in and also looking to upgrade their existing stock as we have some good new properties on the market that are close to what they cost to build. The “as is where is” market still seems to be going strong, a lot of stock is never making it onto the market, double settlements are common behind the scenes and there seems to be enough left in the pie for all. We have sold a number of these deals on for traders this year and everyone ends up with a great deal. This market must come to an end at some point but we would hope for a few more years ahead.
With the reserve bank announcing a modest easing of the LVR restrictions to 65% and allowing more loans through at a higher %, financing should become easier and investors will find they have more equity again to play with, I know I do.
As always, the market keeps going and people always have a reason to sell and move on, investors are no different. People retire, upgrade or downsize their investment portfolio. This happens in all markets so what’s holding you back in 2018? Will our doom and gloom media correctly predict a severe price correction? Will we see a shift towards commercial property investments driven by rental property WOF’s and capital gains tax fear? Or will the property market just calm down for a while and stabilise. Let’s wait and see.