John Percudani from Realmark in WA explains why we may all need to adjust to a new market outlook that provides much more frequent and turbulent shifts in direction.
There is no doubt that we are facing times of uncertainty with economic trends moving at unpredictable speeds. It seems that the days of the gradual market cycle and slow-moving change pace seen in the past may now be replaced by much more volatility. We may now all need to adjust to a new market outlook that provides much more frequent and turbulent shifts in direction, and this will inevitably impact on everyone.
Taking a broader view, investments in all areas whether it is cash at bank, shares, or property, the immediate future is likely to see lower returns on investment being accepted by people. Expectations are less, and yields from investments are adjusting to a new world paradigm of lower and more volatile returns. This in turn, may influence investors to turn their attention to property instead, due to its long-term security, and tangible nature.
Property investors currently do not appear to be talking down market the way equity investors are. Why is that?Property investment here is fairly safe compared to the volatilities of the share market and international economies. In terms of Australian property, yields have not disappeared overnight and during these unpredictable times, people are increasingly attracted to the long-term capital return and base line security that property investment offers.
In the context of property trends, we are seeing a resurgence of investor activity that is informed and considered in its decision-making. They understand that it is not about “bargain hunting” but more importantly about finding the right asset in commercial and residential markets that would not normally be available, if not for the current times.
Affordability may be challenging, however data would suggest that it is promising in the Perth residential property market. Aligning this affordability aspect with a shift in attitudes will see a spike in buyer activity and possibly a sharper cycle adjustment than with we have previously been familiar. So property investors and agents need to be prepared to read the market quickly and tweak their approach.
The weekly selling and letting activity of agents, covering various residential and commercial market types, enables us to sense a shift in the market well ahead of it appearing in statistical reports. It seems that today, changes may occur in days and not quarters. Agents that have this knowledge and market connection should be using it to maximise the benefit to their clients.
It seems that today, changes may occur in days and not quarters.
Whether trading in property short term, investing long term or simply wishing to achieve the best sale or rent price outcome, we can guide buyers and sellers to extract best results from a market that is constantly and rapidly evolving.