Real Estate has kept on transacting which is a positive sign. Our sales volume has decreased around 25-30%. The last two weeks of April were inactive which is understandable given the circumstances at that time. Since the beginning of May, we have seen an increase in genuine buyer activity.
Price commentary is difficult to assess as there are many different markets and price ranges. My general observation is that investor stock is down between 5-7%.
Quality stock by owner-occupiers is still well in demand and reasonably sturdy.
Rental market has held up generally so much better than expected. Arrears are only up 3.5% and we are working to bring this down. Leasing in all branches has been very busy and vacancy levels are only slightly up, this is due to quite a number of holiday rentals now in the permanent rental market.
Advice – Should I sell now or later?
When should you sell? – My recommendation is if you are considering selling between now and the next 18 months, I would suggest sooner rather than later.
At present we know the “now market”. We are still seeing active buyers in the market place and thankfully we have the Government providing financial assistance for affected businesses and employees. What we don’t know is how October and November will look like with the possibility of increased stock coming on to the market and perhaps the drying up of Government assistance packages.
Once again the long term proposition with investments serves us well. It’s one of the great things I love about property. Being within the main asset class and looking at a 5 -10 year period, my estimation is that prices will increase. When considering selling, ask yourself the following questions: Why am I selling? What am I aiming to achieve? Will I still make a gain when other properties are showing an impact under the current market conditions? Questions should be centred more around purpose rather than value.
Property Development – Buy to Keep
Areas of risk for development – Purchase risk, building risk and selling risk. To be able to build and hold eliminates one of these risks.
Development is not about taking risks, it is about risk management. A duplex is a great way to get into the development market for several reasons:
- Most experienced builders can accurately estimate costs.
- Cost-effective build structure can happen swiftly.
- High appeal to prospective tenants.
- Development controls are relatively easy to understand.
Building and holding also has other benefits, no selling fees and marketing costs, limits GST exposure and adds equity to your portfolio from the word go.
Holiday Rental
Stay strong, we know it’s been really hard and we feel for you all. It seems we are only a few weeks away from restrictions lifting and we expect the Mid North Coast to see some of its busiest times due to no international travel.
Investment – Pet Friendly
The world is rapidly changing and real estate tenancy laws are constantly evolving. More and more pets are becoming a part of people’s everyday life so strata by-laws are continually reviewing legislation. Generally, properties that allow tenants with pets rent sooner and for a higher price.
Dave’s Tips
- Speak to an experienced property manager about making your property as tenant-friendly as possible.
- Have a clear understanding if pets are allowed inside or are an outside pet.
- Ensure regular inspections are being conducted.
- Ask for a photo of the pet before approving the tenant.
- Obtain a reference check on the tenant and also inquire about the pet living in the previous premise. It’s a good idea to ensure the home is pet friendly if you decide to allow a tenant with a pet.
Final thoughts
For June 2020 I have a few property strategy sessions available to discuss how to build your ideal property portfolio. With continuing market changes strategies need to alter in line with current conditions. Often what worked to get you where you are now may not work to get you to your next phase and you need to stop and reassess.
Happy investing!
