Separate reports by CoreLogic and PropTrack last month indicated Australian property values had begun to go backwards.

All capital cities except Perth and Hobart experienced value decline across the month of December, according to PropTrack, with the sharpest monthly drops in Canberra (-0.61 per cent), Melbourne (-0.53 per cent) and Sydney (-0.29 per cent).

The national average decline was 0.17 per cent. While this isn’t exactly a landslide, it does show that much of the country is experiencing some sort of correction phase after the lofty heights of the Covid boom.

Of course, the cost of living crisis and the steep rise in interest rates have played a huge part in the value slowdown, but let’s not get too carried away.

Australian property always moves in cycles. A growth phase is usually followed by a correction, then a recovery and then a fresh growth phase.

If you are switched on, you can grow your wealth at any time by creating equity in your property portfolio. Here’s how.

Buy Another Property

The best time to buy is when the market is going backwards, but not everyone does it. Often, people rush to buy when the prices have risen as they think property will keep going up and up forever. When the market is falling, they will panic and offload their assets, thinking the situation will continue to get worse.

Smart investors buy at the bottom, for below market value and, if they must sell, they sell at the top.

If you bought a property now in an underperforming market, you could make equity during the recovery period and then again in the next growth cycle.

Smart Renovations

Renovating an existing property can add value in any market, as long as you focus on the smart jobs.

Improvements that boost the property’s appeal to tenants and potential buyers are key. Kitchens and bathrooms are the two heavy hitters for boosting your buck, as they can provide the highest return on investment. Small cosmetic changes like fresh paint, updated fixtures, and modern flooring can also transform a property’s look and enhance its market value, without breaking the bank.

Before renovating, make sure the job will align with other local properties, so you meet market expectations. You want to spend your money on something that will appeal to tenants and buyers in the specific area, so that you don’t overcapitalise.

Value Adding Development

If your property is on a large block of land, you might be able to add value by subdividing, or adding a granny flat. A second dwelling can generate an additional rental income stream and add value.

Once again, you need to ensure you’re meeting the market. Large suburbs on city fringes may have no demand for granny flats, for example, so you might be better off doing that if your property is close to a university or hospital.

Development projects will also involve council approval and a whole lot of knowhow, so you’ll need to do your due diligence, get educated and engage professionals.

Loan Structure Health Check

Your mortgage structure is vital to your wealth. Refinancing for lower interest rates or switching to a loan with more favourable terms can free up cash that you can reinvest in your portfolio.

Lenders are currently competing for business, so you can shop around for better deals. However, it’s important to engage a mortgage broker who understands your investment goals. There’s no point saving money on interest only to find you aren’t able to buy your next investment property when you want to. Zinger Finance brokers are a good place to start for investors.

Get Market Rent

Review your asking rent to ensure it’s in line with the current market. Offering features like air conditioning, security systems, or even Wi-Fi can justify a higher rent and attract quality tenants.

Short-term rental platforms like Airbnb and Stayz can also be lucrative if your property is in a desirable location. However, be aware of local regulations and the additional management responsibilities associated with short-term leases.

Minimise Expenses

Review your expenditure regularly and identify areas where costs can be trimmed. This could include renegotiating property management fees, shopping around for better insurance premiums, or switching to energy-efficient appliances to lower utility bills. Every dollar saved contributes to your overall equity position.