Predictions for the 2022 investor market

2021 was certainly a year like no other for the property market, so what can we expect in 2022 for investors across both residential and commercial?

Residential

In short, 2022 will see a surge of investors returning to the market. The reopening of international borders means vacancy rates will fall and rents increase. The return of overseas students and skilled labour has the potential to drive strong demand for apartments, especially in cities and University areas. Vacant apartments that have not been used during the pandemic may become good investment opportunities again, and in Sydney, apartments are likely to be in high demand due to high-income earners, providing strong investment prospects if you’d prefer to invest locally rather than further afield. The demand for rental houses is also on the rise as tenants find themselves looking for more space and the need for work from home options.

The prediction is that property values will continue to rise in 2022, however not to the same extent as they have over the past twelve months. As interest rates remain low and with vacancy rates tightening, it’s a great time for investors to grow their portfolio and the lifestyle aspect is certainly tipping the scales as we see more investors looking for beachside and holiday locations, including our beautiful Northern Beaches. In 2021, we started to see a change in strategy for investors too, buying a place to retreat to when they need (i.e., during lockdown) and renting their property out when not required, this may continue into this year with some uncertainty still playing out.

There are also opportunities interstate as we see the population migrating and moving away from the larger cities to regional areas, and in Brisbane (the recent Olympic bid win) we’re likely to see additional development and investment opportunities. Soon, almost 40% of the Australian population with be renters, some by lifestyle choice, others forced by housing availability and affordability which creates more demand and as an investor, providing reassurance into the future for a safe investment.

Commercial investment:

Investors are increasingly focusing on the commercial market, building a portfolio with some of the highest returns of any property sector in Australia. The advantage of long-term investment and leases in high-performing properties makes it an ideal option for those looking for an alternative to the residential market. If you’re equity rich but cash poor, then a commercial investment can achieve up to 8% in rental return and with tenants looking for long term leases, it’s a reassuring option.

Michael Burgio recently joined C&H’s Commercial team, bringing with him a wealth of experience in new and existing commercial leasing, along with an enviable track record in off-the-plan developments. Specialising in retail, office, land, industrial and development sites, we can assist. Whether it’s feasibility research for a development site, yield analysis for a tenanted premises or unlocking a property’s true potential, we understand the numbers are critical. We strive to optimise your financial return, so when the right tenant is secured, you’ll know that your price is an absolute premium that has been maximised.

There are many reasons to remain optimistic for this year, and whether you are a first-timer or experienced investor looking to grow your portfolio, we would love the opportunity to help achieve your property goals in 2022. As with all things in life, there is always a certain level of risk and with both federal and state elections this year, and the expectation that interest rates may eventually rise, we recommend you always speak to a financial advisor before making any decisions. Also worth noting, that quick wins rarely play out, so as an investor, we encourage you to think long-term and look for ‘safe’ options, forgiving investments that will ride the peaks and troughs of fiscal changes.

Whether you are looking to add to your investment portfolio, buy your first investment or need a health check on your current commitments, Clarke & Humel have the experience and expertise to get the best out of your investment and provide sound strategic advice. Click to contact us or call 9977 3300.