by Chris Pullen | December, 14, 2022 | Property Investing
Well, what a year 2022 has been! We have seen a lot of stress in the building industry both with construction and land releases, and the wet weather causing havoc with developers. With the property boom, properties reach their peak in about March of 2022. Then elections, and now with the Reserve Bank of Australia hammering the cash rate every month and inflation figures staying high, the war in Europe between Ukraine and Russia affecting energy prices it has really felt quite stressful. As an investor, we ask ourselves where to from here?
Let’s look at the good things that 2022, if you owned properties from before the pandemic then you will have had a massive growth of about 30%, in most cases, this is substantial gains. Exactly what I talk about with owning property. We are seeing extremally low vacancy rates in the rental market and rental increases of between 10-15% great for the investor and not so great for the tenant. It also looks like Covid and the lockdowns we had during the pandemic are over which is a great thing for everyone. We can look forward to travelling, seeing family and friends this Christmas and no restrictions. Also getting a job has never been easier and there is lots of work available.
If you are looking to invest in 2023 look at the fundamentals of the property. Such as where it is located, is it close to jobs, infrastructure, CBD, Hospitals, and Shopping centers. Does it have desirable living conditions being coastal and close to beaches and lifestyle amenities. Also, take a look at rental returns and what the vacancy rates are in the area. In most areas, this is extremely low. Also, you will need to check if you want to build new as there are still some supply chain issues but we are over the hump and stock is become easier to access. Or you can look at existing housing and look to add value, cosmetic renos, large renos, knockdowns, re-builds, splitters, sub-divisions and small-scale developments are still going to show good profits but make sure you do your numbers. Blue Wave will also be starting a buyers agency service where we will source existing properties for our investors or owner occupiers looking for that right property.
The current fundamentals in Australia is that we are still in a massive house/property shortage and the government wants to ramp up the immigration after a 3 year of no one coming and they are looking to 1 million people in the next 3-4 years again putting stress on housing and property prices.
The biggest thing to remember they are not making any more land and people want to live close to amenities, infrastructure, jobs and other people. Property will always be a much safer bet to me than shares, Crypto and even running a business. Property to me is giving me a return while you are holding it, by getting rental and then when we get capital growth this is the added bonus and the massive growth giving either equity and profits. It could also be a great time to sell a property reaping the rewards and pay down bad owner-occupied debt building equity to use again on another property deal. Make sure you get advice about this before jumping in. We are happy to help here.
The worst thing you can do is nothing and sit on your hands and procrastinate. Start with a plan and goals. I don’t want to look back on these 4 years ago today when I talked to clients about investing, they had the capacity and did nothing. They have lost out many hundreds of thousands of dollars and wealth. Wealth and becoming rich does not happen overnight unless you win the lotto but over time and continued investing you will achieve your goal. There are opportunities everywhere remember to take advantage and seize the moment.
Looking forward to having a nice break over the Christmas Holidays and recharging my batteries to come back to 2023 with a bang and help many of my clients build real wealth through property.
Have a safe and Merry Christmas and a Happy New Year! From all, the team at Blue Wave Property Strategies.