Are you looking to invest in property and take advantage of the new property cycle?
Well...property has been quite a forgiving asset over the past few decades but moving forward there are many things that have changed.
You cannot simply adopt a buy and hope strategy any longer.
It all comes down to the way people are now choosing to live.
Here are my thoughts;
When I was younger… (I find myself saying this a lot more lately), it was all about buying a nice house with a white picket fence on a good-sized block of land.
To some extent this is still the case for many buyers, particularly young families.
But there is starting to be a notable shift in the way people are choosing to live and you need to understand this if you want to take advantage of the next property cycle.
It comes down to competing forces at opposite ends of the demographic spectrum.
Younger Home Buyers
The priority for the next generations involves instant gratification.
They want to be where the action is and want everything on their doorstep here and now and.
Rather than moving 20km – 30km away from the CBD, they are moving closer in.
They are trading big backyards and houses for balconies, smaller courtyards and lower maintenance living.
Walkability is a key factor in these locations, think;
- Public Transport
- Cafes and Restaurants
- Green Space
- Boutique shops
It all must be within quick easy access by foot.
I see, as I am sure you do, the continual outcry that house prices are not affordable anymore etc.
They are in reality, just not in the areas they desire to live in.
Retirees / Downsizers
The later generations' priorities have changed also.
It used to be about the sea change or tree change, but in reality, it was only small sections of this demographic that made the move.
The majority are staying put, they want to live close to their Doctor or Dentist, their local shops and cafes also and importantly their family.
Many are also choosing still to continue working, albeit at a much slower pace.
They are just selling the larger 4- or 5-bedroom home and moving into something much smaller and low maintenance.
This also allows them a healthier nest egg come full retirement.
So once again, this generation is also staying fairly central and close to where the action us.
- Also read:EXPLAINER: New home buyer scheme helps frontline workers get into the property market
- Also read:We’re in the middle of a rental crisis | Property Insiders [Video]
- Also read:17 Sydney suburbs that are cheaper now than 5 years ago
- Also read:Boom to bust: What makes property prices rise and fall
- Also read:Should you do anything about rising interest rates?
The shift is on
More people will continue to want to live in our inner cities.
You need to really understand this key point if you are going to be successful with property over the next decade.
If you continue to buy in outer areas, where there is less demand for property, you are really going to struggle.
20-30 years ago, you were able to take advantage of the emotion factor and the way Aussies wanted to live.
But that is now rapidly changing, and you need to adapt and look for properties in inner to middle ring locations with high owner-occupier appeal.
All things being equal, houses will always be preferable in quiet tree-lined streets.
We also see huge potential for townhouses and villas in these middle-ring suburbs.
They provide quality low maintenance living and are affordable to varying target markets in the right locations.
For apartments, homeowners don’t necessarily want to be paying $6,000+ in Body corp fees in flashy complexes with facilities they will barely use.
They much prefer quieter, boutique blocks with more ample living spaces and something special like a courtyard or balcony with an outlook.
Change Your Strategy
The way people are choosing to live moving forward is dramatically changing.
As a result, you should also be changing your criteria if you are serious about taking advantage of the next property cycle.
While the supply of land in outer areas will remain high, it will be a demand that is reduced due to this change.
You could have bought anywhere 20-30 years ago and done “ok” out of property.
But moving forward buying and hoping in these outer areas will be a very slow way to grow your wealth.
Stick to the investment fundamentals of low supply and high demand in our inner and middle-ring suburbs and you will reap the rewards.
Now is the time to take advantage of the opportunities the current property markets are offering.
Sure the markets are moving on, but not all properties are going to increase in value. Now, more than ever, correct property selection will be critical.
You can trust the team at Metropole to provide you with direction, guidance, and results.
Whether you’re a beginner or an experienced investor, at times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that's exactly what you get from the multi-award-winning team at Metropole.
We help our clients grow, protect and pass on their wealth through a range of services including:
- Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family. Planning is bringing the future into the present so you can do something about it now! Click here to learn more
- Buyer’s agency – As Australia’s most trusted buyers’ agents we’ve been involved in over $4Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney, and Brisbane bring you years of experience and perspective – that’s something money just can’t buy. We’ll help you find your next home or an investment-grade property. Click here to learn how we can help you.
- Wealth Advisory – We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.
- Property Management – Our stress-free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years, and our properties lease 10 days faster than the market average.