Early 2020 saw some of the foremost Australian property markets in a major upswing, however it wasn’t long before awareness of the pandemic started to become more apparent.
Australian media began reporting major property market correction and buyers began to question if it was a good time to buy.
It’s not surprising then that many of the buyers we were working with during that period decided to put their purchasing plans on hold. It was a natural response to a relatively unknown situation. However, Capital Properties’ response to the situation may have surprised some of the more cautious buyers. Let us explain why.
On the go? Here’s 30 seconds of take outs:
- Why perspective makes all the difference in a tricky market.
- We’ll explain why some people saw opportunities during the COVID-19 crisis while others floundered.
- New trends are emerging that make investment in 2021 an attractive proposition.
- Interstate migration, changes to employment, suburban and regional diversity, low interest rates, returned Australian migration and an increased demand for functional rentals are key.
- With Capital Properties’ help, 2021 could be the best year yet for property investment.
Keep reading >>
Where others saw risk, we saw opportunity
Many of the buyers we work with at Capital Properties have never before experienced an economic downturn whist in the midst of making a property purchase. This new experience means they were less sure of the short to medium term outcomes of buying during a perceived ‘crisis’.
Also, many first-time investors experience investor analysis paralysis even in the best of times. So, it’s not surprising that in the face of a global pandemic, first-time buyers might be even more fearful of making the right purchasing decision. This would be particularly true if they had been basing their decision to purchase at a time while all news and media reports were overwhelmingly negative. Let’s face it, the easy decision was to wait and not to move forward with investing for what seemed like an unknown future.
Why this difference in perspective?
When I reflect on the buyers’ decisions to put purchasing plans on hold, I ask myself why Capital Properties have confidence while others don’t? And in the end, it comes down to perspective.
Perspective is rather like imagining that you can see things others cannot. Like seeing things through a different lens which offers a different, sometimes broader view.
Throughout history we’ve seen men and women thrive during the worst of times while others struggle and fail. And often the only difference in their experiences was their ability to see opportunity where others see crisis.
You know the old expression “You can’t see the trees for the forest”? Perspective is a similar concept. It really means that you can be so focused on a small detail, for example trying to pick the perfect investment property, that it becomes easy to lose focus on the bigger picture. In the past year it was also quite difficult to see the reality of the property market through the smoke and mirror stories shared by the media. So, of course, it’s easy to get misled and become discouraged by the constant doom and gloom we hear through the media these days.
Capital Properties sees investment differently
With our long experience at Capital Properties, we’ll tell you that it’s very rare for all the stars to align and only a few lucky buyers get to experience buying the perfect house in a perfect market. The reality is that all buyers need to make concessions and have flexibility with their investment criteria.
We’ve seen buyers hesitate in tricky circumstances before, only to review their decisions later down the down track and end up kicking themselves that they didn’t pull the trigger earlier. That’s why we make it our mission to offer a different property investing perspective. And it’s amazing what a fresh set of eyes can achieve. We can spot trends that a less experienced buyer might miss. And because we don’t want you to miss out again, we’re sharing some trends you should be aware of right now.
Property Trends to Watch
Even in a market that’s reeling from an unprecedented global pandemic, there are trends emerging. So, what trends do you need to look out for? For example, it’s important to recognise where population shifts are taking place and what new factors might be at play.
With international migration coming to a screeching halt, the new trend to look for is interstate migration. Check out this blog post from earlier: The great interstate migrate.
Post COVID-19, many businesses have continued to change the way employees work by allowing more people to work from home. Therefore, we’re seeing an increased opportunity for employees to work remotely. This new trend has seen workers seeking lifestyle changes and even influencing where they choose to live.
Suburbs and Regional Employment Diversity
Many specific employment sectors such as hospitality, shop front retail, national and international tourism and consequently air and sea travel have been particularly devastated. And yet, we’ve seen that regional centres with employment diversity are less likely to be affected and impacted by the COVID-19 pandemic. This employment diversity certainly helps to reduce overall unemployment.
Low Interest Rates
The Reserve Bank of Australia (RBA) has the official interest rate currently sitting at a historic low of 0.1%. Financial experts are not anticipating an increase in rates for at least the next 3 years. That means a big juicy carrot has been dangled for potential buyers. Such low interest rates means the cost of borrowing has never been cheaper and should give all categories of buyers more confidence to buy.
Australian Expats Are Coming Home
The Department of Foreign Affairs (DFAT) statistics show 389,000 Australians have returned home since March 2020. This mass of people returning to put down roots and a shortage of available houses in many property markets means that many buyers are prepared to pay a premium to secure their homes.
Also, the steadily declining value of the Australian Dollar since February 2019 means that returning migrants have received plenty of bang for their bucks with such favourable exchange rates.
With the ongoing change in working environments and obvious constraints of working from home, the home ‘study’ has never been so important. A highly functional home office that allows employees to work unimpeded from children or other distractions has suddenly become the most sought-after requirement in all new real estate purchases.
What’s next for 2021?
As we enter this new year it’s strongly anticipated that demand to purchase property will remain at elevated levels in specific property markets around Australia.
Due to continued stimulus measures, high levels of household savings, low borrowing costs and low interest rates, as well as first home buyer incentives and stamp duty relief in some states, there’s a very compelling story to encourage buyers (Owner Occupiers & Investors) to enter and/or re-enter the property market.
If you’re ready to take advantage of these positive circumstances or would like to discuss your investment options, we can help. Our 7 Step property investment process makes getting started easy, taking you through the entire investment process, including our Discovery and Strategy sessions in just a matter of weeks.
If you’re new to the property market, our First Home Buyer Pack and our book Property Investment SOP will help get you off on the right foot from the get-go.
Get in touch now and make 2021 your year!