I had the great fortune of living in Melbourne for about 10 years and there is a lot to love about that town. Superb restaurants, cool bars, a compelling brand of football, excellent arts culture and layered clothing among the delights.
Some readers might not be with me on the football comment but I think the rest stacks up. The “layered clothing” line reflects another, less admired, feature of the city … its weather.
The popular saying is that if you don’t like Melbourne’s weather, wait five minutes. Hence the layered clothing.
“Oh, the sun’s come out.” Coat off, scarf off, jumper off. That’s better. Dark T-shirt, dark jeans, black boots … fitting in.
Investing can be like Melbourne’s fickle weather, although the change doesn’t usually happen in five minutes. Whether you have invested in stocks or real estate, things change.
For Mackay real estate owners and investors, the climate changed around 2013.
The market plunged, rents dropped, sale prices fell and while some people were forced to sell, many held on to their properties. Well, you had to wait more than five minutes, but I can tell you the climate has changed again.
Prices are up dramatically from where they fell to during the downturn. About four months ago I sold a house for $570,000 that I sold for $476,000 in 2015, and the market continued to fall for another few years after 2015. Prices have bounced back dramatically and this is now a hot market.
One of the reasons is that thanks to a strong economy and the covid experience, a lot of people are moving to Mackay. But, due to the downturn, nothing was built from 2013 to 2019 so high demand and lack of supply has created a massive shortage of rental properties, with vacancies at under 1 per cent.
People moving to Mackay are finding there is nothing to rent so they are buying straight up. Others who have been living in Mackay for a while have decided they love the place but don’t like rent increases so they’re taking the plunge and buying.
And the supply side of sales is tight because very few people are leaving Mackay and selling. It’s a great place to live and the Covid experience down south has locked people into Mackay.
So, who gets an opportunity out of this? Investors. That property you bought years ago but couldn’t sell during the downturn is now worth a lot more than it was. You might want to put money into super, pay off your main property or put away some cash and, if so, now is a great time to get an appraisal on your investment to find out what it’s worth.
It’s also important to get good advice on the strategy for selling. Do you allow your tenants to sign another 12-month lease? If not, when do you give them notice? Do you sell with tenants in there or not? Do we need to freshen up the property or is that a waste of money?
Good, experienced real estate agents will have a strategy that gets you the best result.
Of course, as Melburnians know, the climate can change so give us a call at Gardian to get some good advice on what to do, and when to do it, to get you the best result.
