Have you considered investing in property in 2023?
Well, take this as your sign – maybe it’s time!
When it comes to property investing, it can be easy to place all of the decision making power on the broader population. This means that we can be easily influenced by market trends, good and bad, without actually considering our individual goals and circumstances – which may well have us in a sound position to PURCHASE property.
This is certainly something that we’ve seen come to the fore over the last 6 months. As interest rates and the costs of living increase, the population in general have been able to spend less money, and borrow less when purchasing property, slowing the enormous price increases throughout the pandemic.
At the same time, this does one VERY important thing for a unique group of people – the savvy investors…
The thing is, this population-wide shift doesn’t actually represent each and every individual, meaning that your property investment window may well be as open as it has EVER been!
Why?
Well, plainly, because there’s no time like the present…
More specifically though, as a team, we’ve identified the three main reasons that make 2023 a great climate for prospective property investors – check them out!
Supply and Demand
At the end of the day, the whole property market stems upon the economic principles of supply and demand.
These two factors influence every move in the markets, on a global scale, all the way down to you purchasing your investment property, or buying a tin of tomatoes.
In simple terms, if supply is high and demand is low, prices go DOWN, and conversely, if demand is high and supply is low, prices go UP.
You may remember the uproar about iceberg lettuce prices last year – supply for lettuces went WAY down, and the demand stuck at moderate levels, meaning prices soared. Looking at the market with a long term frame, things are looking very similar…
Low supply due to increased costs, and labour shortages, combined with huge demand highlights that growth is brewing in the property market.
With this kind of Supply and Demand relationship, it appears that despite short term slowing of the market due to interest rates and inflation, things won’t let up in the long term. Therefore, as an investor, providing quality property to tenants will not only help to supply short term equity, but also long term growth in the market – the ideal pillars for property investment.
Migration
When it comes to migration, it goes without saying – there’s bound to be more demand for property.
As a result of the current world we live in, we have seen some incredibly interesting migration here in Australia, not just on a national level, but on a state by state basis too.
The first factor in this migration equation is one that has come up quite frequently in the news overseas migration. With a shortage of skilled workers in Australia, people are coming from far and wide to experience the country and settle down with their families.
Alongside this, we are now seeing a huge return in face to face international students, coming back after a few years of studying from home. You may have heard the recent news from China, where around 40,000 enrolled students have been forced to return to Australia to study, only further increasing demand on properties, especially inner-city.
This has a snowball effect on the market in general, because at the end of the day, everyone needs somewhere to live. So even though you may not be purchasing an inner-city apartment as student housing, it still has an interesting impact on property market saturation.
The other type of migration to look at – of the state-to-state variety – is equally important. Simply put, this is due to uneven rates of migration, placing even MORE pressure on the demand for certain towns, cities and regions.
An excellent example of this targeted growth occurred throughout 2021, when South-East QLD saw a net increase of around 1100 people PER WEEK. This huge influx of people led to major demand increases, and in turn major price increases. Ultimately, as a result of this, the Gold Coast recorded a 26.7% jump in house prices throughout 2021.
Understandably, this wasn’t the only factor driving these price increases, but it’s certainly something to keep in the front of your mind – population growth can be a game changer.
Rental Market
The current supply and demand landscape of the Aussie property market does a good job of highlighting the rental market as a whole.
With low supply of new builds, as a result of labour shortages, increased material prices and supply chain issues, it has caused all kinds of demand issues for rental properties.
Ultimately, this has led to incredibly low (the lowest on record!) vacancy rates, as well as large increases in rental yield.
As you may have seen or experienced, as a result of these factors, the Australian rental market is incredibly tight. Standard properties are frequently receiving upwards of 50-100 applications – and people are often waiting months to get a place.
For us, this highlights two things:
Providing quality SUPPLY to the market will help renters in the long term.
Financial literacy, and making the most of your position is KEY. Whether it’s growing your existing portfolio, or rentvesting, your circumstances may never be as enticing to enter the market.
As they say, the best time to invest was yesterday.
If you have equity for a deposit, income to service your loan, and a cash buffer, it’s no secret that the property investment opportunities in 2023 are huge. We are already seeing some incredible results from our savvy clients across Australia.
With a combination of indepth research and tailored strategic planning, we’ve got your back when it comes to long term property investment. At Propell, we’re all about understanding your unique circumstances to help you achieve financial freedom.
Want to learn more about investing in 2023?
Reach out HERE, or give us a call on 1300 776 735 – we’d love to hear from you!
