There’s been a huge increase in investors re-entering the market from mid-last year.
More and more people are now buying future homes for their kids. Holding these properties as investments today and protecting their family from rising property prices tomorrow.
We’ve also seen a sharp increase in people buying their future home for retirement 5-10 years ahead of the need. Renting it out in the meantime.
This is in addition to traditional investors who are motivated by long-term wealth creation and additional income streams.
Regardless of motivation, now is an optimal time to enter the market. Property investment will become a dominant feature moving forward in 2022.
Here are the top three reasons why investors should continue to keep their gaze on the property market this year.
1. Vacancy Rates are historically low and are only dropping
On latest data, National rental vacancy rates were sitting at 1.3%. In Sydney vacancy rates are at 1.9% and dropping. There is extremely low rental stock on the market in desirable areas, making it an ideal time to invest.
Lifestyle regions like Byron Bay and the Gold Coast are experiencing rental competition like never before. Vacancy rates in these areas are sitting at an incredible 0.5%
The increase in remote work has meant that more and more renters are looking at non-traditional locations to get more bang for their buck. Favouring lifestyle and willing to pay for it – the tenancy pools in Byron Bay & the Gold Coast are enormously competitive, with almost all liveable properties leasing immediately after being listed.
2. International Borders have now opened and population growth rates are normalising
An already saturated tenancy pool is about to expand with students, travellers and business visa applicants returning to Australia.
Permanent migrants are also welcomed again, with current estimates placing us at circa 160,000 per year growth. This is down from historical growth trends – circa 180,000 per annum.
3. There is and will continue to be an undersupply of rental accommodation
While the population continues to grow, the last 2 years have slowed down construction. Inflation is also driving up the cost of building. It’s likely that for the next 5-7 years, we will see a persistent chronic undersupply of rental properties in our capital cities and high-demand lifestyle areas.
For those hesitant to invest due to talks of interest rate rises and the upcoming election – in this climate, it remains better to be in the market than out of it.
Demand overwhelmingly outweighs supply, so rental prices will continue to rise. This is likely to offset any impacts of rate increases and the associated operating costs
Our advice
The 2022 market is providing ideal conditions for those looking to invest in Real Estate or grow their existing portfolios.
As always, whenever thinking of purchasing an investment, we advise buyers to focus on the fundamentals of good investing. Be asset-driven, consider your ideal tenant in the purchase and buy in areas with strong barriers to overdevelopment.
As always, if you could use guidance and expertise on your next purchase in Sydney, the Gold Coast or Northern NSW markets, get in touch with us today.
