Capitalising on Softening Property Market Trends

Julian Fadini | April 02, 2019

Last year, Sydney and Melbourne were ranked among the five most unaffordable major housing markets in the world by international consultants Demographia.

Things have since changed, there is a silver lining to this large cloud shaped property bubble. Recent regulatory efforts are finally bringing calm into a two-decade-long investor storm frenzy in Australia.

Three primary factors will largely contribute to the current house price softening.

  • Restructured lending standards
  • Increased fees for foreign investors
  • Restrictions on investment coming out of China

These changes mean the property market is ripe once again with opportunities. So if you were planning to invest in property- now’s the time. And here’s our guide to make the most of this window.

 

Set a goal

The first step of finding the right investment property is setting a goal. For example, your objective could be long-term capital growth or simply an extra source of income. Many people look to property investments as a means of catching a few tax breaks. Writing down your plan and sticking to it can help you achieve this and make sure you are investing for the right reasons. It’s important to bracket how much you are willing to invest, and determine what kind of returns you want from it. By narrowing down your budget and the timeframes for returns, you're going to save yourself the effort of looking at incompatible properties.

 

Choose a location

The next step to finding the right investment is picking a location. Most first-time investors always prefer buying property in the same suburb or city as their residence. However, this is often a short-sighted decision as it overlooks important factors like capital growth. So when choosing a location, keep an eye out for areas that are expanding in terms of population, small businesses, and local infrastructure. Keep in mind, however, that maintaining a property in a different city can lead to many management nightmares. You may likely need to look at hiring a property manager to ensure your assets are well taken care of.

 

Smooth management after purchase

Once purchased, owners must continue to ensure their new property is efficiently managed to secure steady gains and minimise any chances of asset value depreciation. As an investor it’s best to have your real estate agents be proactive, ensuring all tenants are locked into long-term leases. Even if you do have a long-distance landlord managing your property, it may help to periodically check in from time to time. This will give your tenants a feeling of reassurance and will help you gain some first-hand insights on how you can improve the quality of your property.

Speak to an expert

After you’ve shortlisted the basic criteria for an investment, it’s wise to get a professional opinion on your decision. A keen eye can often help you spot any insights you may have missed, especially since revised regulations are making it more crucial than ever to seek professional advice, as you want to ensure complete security for your investments.

 

Property investments are already on the rise, so speak to us for expert guidance if you are planning to capitalise on this period.