April 2015 Market trends – what you need to know and where the market is heading.
Everyone in the real estate market wants to know what is going on and what is going to happen in the future. Nils Bohr, Nobel Laureate in Physics probably said it best when he said that “Prediction is very difficult, especially if it’s about the future.”
Not only does the answer really depend on your individual position (are you buying, selling, investing, renting or looking for a tenant) but it also depends on a great deal of variables. Outlined below are some of the market indicators that will provide clues on what to expect.
(If you just want a quick snapshot without the detail go straight to the Take Away Message section below).
In the past 3 months the number of jobs advertised has dropped from around 12000 to only 10285 jobs.
Given that some of the labour intensive construction projects in the oil and gas industry are coming to completion at the same time as a slowdown in the mining industry there is a general sense of doom and gloom. However, going back 12 months ago where there was more optimism, the number of jobs advertised was only 11800. This is only a difference of 1600 jobs so while the conditions could be better, it is far from doom and gloom.
2. Rental Market
There is no doubt the rental market in recent months has been tight if you are landlord. The median rental price is still hovering around $440 per week and the vacancy rate is steady at around 4.1% which means that property managers are experiencing less enquiries for available rentals. There are no signs that things are going to change in the near future. Though increasing the rental income seems difficult at best at times, there are ways to increase your net cashflow if you own an investment property. For tips on how to increase your cashflow on your investment property click here.
As an investor, secure your tenant at the same rent they pay now. If you have to find another tenant you may have to drop your rent to attract a good tenant. As a landlord, if you are looking at selling your investment property now is a good time to list it for sale. This is especially the case if a lease is due to expire in the next three to six months, as you can expect a lower rental yield.
Also, consider that time is running out if you need to sell your investment property in this financial year.
If you are thinking of selling your investment click here to discuss your situation
3. Properties for Sale
Since the last update, the number of properties on the market has increased to around 13,662 properties for sale. As such there are 1500+ properties above a balanced market so buyers have the upper hand.
………So what does all this mean for you?
As a buyer
Now is a good time to go property shopping. Consider properties that have been on the market for more than 6 weeks. Sellers that have just listed their property for sale are less likely to accept lower offers.
As a landlord
Be aware that tenants are spoilt for choice. Though some may not be aware of this, it would be risky to assume that your tenant is not keeping an eye on what is going on. If you have a good tenant, make sure they are happy.
Ensure that you approve repair requests from your property manager promptly and to a high standard. The side effect of regular maintenance is that the tenant will feel that they are being looked after and hopefully will be less likely to look for another rental.
For more tips on maximising your return on your investment property click here or contact Bronwyn on 0478 774 004 to discuss your situation.
As a seller
If you are thinking of selling your property, there is no point in waiting for the market to improve as the property market is likely to stay as is for the rest of the year (and possibly the following year). Be realistic with your asking price. A 6 month old appraisal or a sale of a similar property last year counts for nothing in the post boom market.
Keep in mind that you can still generate capital growth for your property, however, you just can’t rely on the market to do all the work for you.
When selling a property, there are only 4 variables
- The location,
- The right marketing strategy,
- Presentation of the property, and
- Your agent
The good news is that you have control of 3 of the 4 variables.
To discuss your situation and how you can add capital growth to your property give me a call on 0466 725 866 or click here