As we head into the first quarter of 2022, investors are returning in full force after many put their plans on hold in 2021. Investors in the Lower North Shore are returning to bricks and mortar as other asset classes are proving to be more volatile. The value of cryptocurrency, for example, plummeted $130 billion in 24 hours in January. Whilst endlessly exciting it’s not proving to be quite as safe as houses, as the saying goes.
The all-consuming buoyancy of the whirlwind property market over the last few years has left many believing they are experts in real estate investing. After all, anyone can jump onto a listings website, look up a street in Mosman and get an idea of the rental prices. I’m reluctant to report, that level of detail does not maketh the expert.
While reports have shown that the property market is slowing in momentum, the projected growth in the market is still substantial in 2022. Property is a timeless and tangible asset. This makes it inevitably less risky. Investors have returned but the trick is finding the rose among the thorns. Anyone can sell in a hot market, but which investment property is right for you? Here are my insights into investing in 2022.
Don’t underestimate bricks and mortar
Without a doubt, bricks and mortar is at the foundation of Australian wealth. Since the beginning of the pandemic, rising house prices have driven a surge in household wealth – the difference between the total value of assets owned by households and how much debt they owe. According to the Australian Bureau of Statistics, household wealth has jumped by an incredible $2.4 trillion or 22 percent to reach a record $13.4 trillion. Climbing household wealth, low interest rates and tight rental vacancies has created the perfect storm for investors.
The defining factors are in the detail
From traditional Californian bungalows in Cremorne, prestige apartments in Mosman, to palatial waterfront properties in Balmoral, the Lower North Shore is a diverse rental market. It’s so important that when you’re buying you get the advice of an investment specialist to inform you what’s going on in the market and what the trends are. For example, when it comes to rental amounts, a defining factor could be as simple as the view from the apartment next door. At Ray White Lower North Shore Group, we have a team of investment specialists who have incredible insights and local knowledge of every suburb.
The metrics that count aren’t online
As you know, the weekly rental income found on realestate.com.au or domain.com.au is not the most pertinent metric that investors need to know. Rental yields and vacancy rates are even more essential. But what about population movements? How many people actually want to rent this type of apartment? What type of depreciation is available for the property? What is the ratio of owner occupiers to investors? These are all insights an investor needs to know to inform their purchase and investment strategy.
This month alone our investment specialists are working with over 300 clients. The breadth of our portfolio and diversity of stock allows for us to tap into the idiosyncrasies of every suburb, street and dwelling for our clients. It’s these intricate and minute details that you need to know before purchasing an investment property.
If you want to join in on the conversation, please reach out.
Michelle Lucas
Head of Investor Performance & Growth
michelle.lucas@raywhite.com
0403 830 538
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