Property Predictions For 2018 By Nathan Birch
It is the start of another new year of opportunity in the property market.
While I would normally give you my property predictions for 2018 for each market, this year things are a bit different.
We are entering into a period of uncertainty. Tighter lending regulation from APRA has made it difficult for buyers all over Australia to get finance. This has meant fewer buyers across all markets.
In fact, it is likely the market will stagnate over the next 12 to 18 months.
But, despite what the general population may think, this is excellent news for investors.
2018 is a buyer’s market.
For those who are cashed up and finance ready, this year will be an excellent time to buy.
I have already been finding great opportunities over the past six months and believe that there will be many more bargains to come over the next 12 to 18 months.
While many are finding it difficult to get finance, those who are ready to pounce will have the opportunity to pick up properties for cheap.
Buying when the time is right.
A lot of people have become blindsided by the recent surge in prices, particularly in Sydney.
The market has been hot. The more prices have gone up; the more people have been rushing to buy.
But why buy when prices are high, when you can buy for less during sales time?
The next 12 to 18 months will offer a small window of opportunity to buy properties that are ‘on sale’, before the market picks up speed again.
By the way, I love this sort of market – it is the type of market that I built my foundation portfolio on back in 2004 to 2009.
Less competition in the market place.
If you have less people buying properties, it becomes easier to negotiate a good price.
Vendors become more flexible with the amount they are willing to accept, because at the end of the day, they need to sell. They don’t want their property sitting on the market for months at a time with no-one willing to pay what they ask.
If they want to sell, they have to settle for less.
Rents are likely to go up.
With less people buying, more people will be renting.
Since not as many investors will be buying, there will be fewer rental properties in the market.
This all equates to greater demand within the rental market; making it possible to increase rents.
What does this mean for rentvestors?
While your own rent may rise, so too will the rent on your investment property. This extra rental income can hedge against your own increased expenses.
What about interest rates?
It is my personal opinion that rates will continue to remain low over the next 12 to 18 months.
While this is not financial advice – just my own thoughts on the market, it seems likely that rates will stay unchanged for some time.
The banking system is currently in unchartered waters. If the RBA was to increase the cash rate now, millions of Australians would find it difficult to repay their mortgages. This would have a flow on effect; with less consumer spending causing damage to the economy.
The APRA changes have done what a rate rise would normally do – without causing financial strain for those with existing mortgages.
Using Cryptocurrencies in property investing.
I have been seeing a new wave of millionaires emerging who want to invest their funds into property.
A younger generation of investors who have become cashed-up through cryptocurrencies have started to flood the market.
These individuals have made so much money that they are able to buy properties in cash or with very little finance.
Binvested will be discussing strategies that we have been testing, involving cryptocurrencies, as a way to get into the property market for our inner circle of clients.
Instead of the 0.001% of investors with six or more properties, we aim to create a whole new class of investors who can build large portfolios fast.
Be ahead of the trends.
Instead of following the trends, it is important to be ahead of them. Property predictions are just that – predictions. Nothing is set in stone and a solid strategy is the best way to move forward with your property investment portfolio.
We are cutting edge when it comes to property investing. This is why our clients do so well after following our advice.
Stay tuned throughout 2018 to hear more about ways you can get ahead through property investing.