Upstates 2020 Vision and Trends

A year in review

What a year 2019 was for the Northern Beaches area.

The home  market  saw  a 15%  jump, with plenty of new faces  migrating  to this fantastic  part  of the  world. Apartments saw  a rise, but  definitely not anything  like what  homes  saw.

What  we did see  for rental  properties  was  vacancy  rates  continue  to plummet. If there’s  an opportunity  to live  in the  area,  it’s being  snatched up.

This made 2019  a fantastic  year  for investors and  first-home  buyers  alike.

The other  major trend  was  the  rise in pre-approvals, which doubled in the  back  half of 2019.

This means  buyers  are  becoming  savvier, and  are  making an  extra effort to appeal to sellers. But what  does  this all mean  for the  year  ahead?

We’ve  consulted  with experts  across  residential  property,  commercial  property,  asset management, our concierge  service and  the  finance sector,  to give you the  best  glimpse possible  at  2020.

 

Residential Predictions for 2020

The back  quarter  of 2019 was  particularly strong  around the  Northern  Beaches,  so, how do Upstate’s  residential  sales  experts  see  that  trend moving into 2020?

We’re  predicting  continued  growth  and competition  in the  housing  market.  However, we note this is  also  going  to be  met with potentially  not  as many  houses  to meet  this demand.

According to Geoff  from our Residential team,  the  first home  buyer grant  probably  won’t increase  the  number  of potential  buyers  there  are  in the  market. The real estate industry will nevertheless remain  fresh in peoples’ minds as  housing  prices around the  Northern  Beaches continue  to rise.

 

How can  buyers, lenders  and  investors best  leverage  these  market  conditions  in 2020?

For Buyers? Lock  down  your finances  ASAP and  be  ready  to ask for settlement  conditions that  make  it easy  for the  vendors  to say “yes”.

For Vendors?  In the  competitive  real estate market  we’re  in, this is  the  perfect  time to increase price competition  by running an  Auction. When selecting  an  Agent, make  sure you invest in an  Agent  with a large  and  nurtured  database of ready-to-bid buyers.

For Investors? Take this moment  to hit pause and  review the  changing landscape.  For example,  ask: would a different  tenant pay  more?  With the  new decade among us, this could also  be  the  perfect  time to upgrade your older  properties.

 

Next Year’s Commercial Sales Forecast

Commercial  sales  have  continued  to offer great  opportunities to buyers  in the  last decade. But what  do our agents think the  new decade will have in store  for commercial  sales?

Paul from our Sales & Leasing  team  has  one  word for you: Warehouses. There’s  definitely a strong  (and  continued)  demand for owners, lessors and investors. So don’t wait to capitalise on this market.

In fact, speaking  of continued  growth  in the  market,  the  prediction  seems  to be  a drop  in interest  rates.  This means  better  returns  than  what the  banks  are  offering, making it the  time to look at  commercial  properties  for investments.

 

How can  buyers, lenders  and  investors best  leverage  these  market  conditions  in 2020?

Buyers. Get  in sooner,  not  later. As Aleks from our Commercial  Sales & Leasing  team  points out – the  lower the  interest  rates  currently, the more expensive  the  properties  will get  in the future.

For our Lenders,  now’s the  time. Paul recommends that  it’s the  prime time to release  your building’s  capital.  Get  a lease.  Sell your property. Then take  that  money,  and  invest it right back  into your business.

Which leads  us to Investors. Tenant  investments?  Currently offer better  returns  than  banks. Thinking about how to generate returns  and  capital  growth?  Buy a tenanted property.  Or a vacant  lot (with a longer  settlement).  The settlement period  gives you time to advertise  and lease  the  property.  A win/win  situation!

 

2020’s Asset Management Predictions

Our property  managers have  picked up on the  trends  of the  last decade,  and  have  found  a little “20/20”  clarity for the  year  ahead.

The market  is  predicted to be  a strong  one.  John, our Senior Business Development  Manager, thinks that  with the  low interest  rates  available, 2020  is  the  year  for investors.

There’s  potential  to refinance,  and  with the  equity you get  from that,  even  to look for other investments.

 

How can  landlords and  tenants leverage market conditions in 2020?

Landlords  – Invest in an  Agent  who can  provide  you with good  advice  on how to read  (and capitalise  on) both  the  summer  and  winter real estate markets.  Once  you’re  equipped with some solid information on that,  you’ll  be  able  to have a productive  market  all year  round.

Tenants  – Start being  proactive  with your tenancy  applications. Get  all your paperwork completed, and  have  all the  relevant  documents ready to submit as  soon  as  you can. This shows Agents  (as well as  the  Landlords)  that  you’re  keen  and  organised.

 

Key trends

Technology,  technology,  technology.  To streamline,  to better  the  experience,  and  to provide the  opportunity  to have  all the  information  in the one stop. A massive  factor  in property management, and  a constantly  evolving factor  in the  market.  And at  Upstate,  we are  proud to be implementing  it faster  than  most of the  industry.

 

Concierge in 2020

Upstate has  been  making significant progress  on our Concierge  Service in recent  years  – even helping  closing a deal  for $100k above  market value.

So the  big question is – what  room  for improvement  is  there  in 2020?

A well-presented property  is what  will continue  to drive up engagement and  prices in the property  market.

Remember,  the  purchase of a home  is  one  of the  biggest  investments  we make,  and  research has  consistently shown  that  the  purchase of a home  remains  to be  a purchase made emotionally.

So while those  investments  in home  improvements  or staging  may seem  small at  first, they have  the  ability to earn  you back  the  investment tenfold  along  with a speedier  campaign, by engaging a larger  and  broader audience and  generating more  interest  in the  property.

How can  vendors best  leverage concierge services  in 2020?

Get  in contact with our Concierge  team  early. Even before  you’re  ready  to put yourself on the market.

According to Tess, from our dedicated Property  Concierge  team,  if you give the  Concierge team  a bit more  time, there  will always be more trades available,  and  more  options  with better,  more  competitive  prices.

Sure, we could always complete  the  job and  provide  our services quickly and  efficiently. But by giving the Concierge team  a bit more  wiggle room  in time, you  give yourself more options.

Key trends

Particularly in the  Summer months,  we could be  seeing  a comeback of rattan,  oak  floors and pristine white walls. And if you pair that  combination with earthy  tones,  back-styling,  and elements  of nature,  you can  create an  atmosphere that  will have  guests  feeling comfortable and  emotionally connected to your property.

And, as  always – make  sure you’re  creating  a ‘flow’ through  your property  when  you’re thinking about your  preparations. It’s  essential  to for when prospective  buyers  walk- through.

 

A word with Damian Wallace, our Finance Broker and Advisor

So far, all of our advice  has  come  from those  deeply  ingrained  in the  property  industry.

For an  added perspective  on the  year  ahead, we’ve  brought  in our internal  finance  broker and  advisor, Damian  Wallace  for a bit of a Q&A.

Q: In your industry,  what  do you see  2020  being  like?

DW: This is  going  to be  a big year  in real estate.  2020 will see  the  start  of the  first home  loan deposit  scheme  roll out across  Australia.

This also  means  that  10,000  lucky buyers  (per year) will have  the  opportunity  to access  a government guarantee that  will help them  save  on their lender’s mortgage insurance.

To be  eligible, the  income  thresholds  will be  up to $125,000  per  annum  for singles and  up to $200,000  per  annum  combined  for couples (assessed  in the  financial year  preceding the financial year  in which the  loan  is  entered into). And for NSW the  cap  for the  property  price is set at  $700,000.

Q: What’s the  catch?

DW: The big risk? That every single one  of those  10,000  guarantees might be  given out by the  end  of January! So a tip, make  sure you get  your applications in quickly, as  it’s first come first served.

Q: What are  your thoughts in terms  of interest  rates?

DW: 2020  is  the  year  to keep  an  eye on the  interest  rates.  With Australia’s  Reserve Bank Chairman  warning  that  wage  growth  is  predicted to remain  low, there’s  always a distinct possibility that  there  may be  further cut rates  in the  market.

We could also  (potentially) be  seeing  a limit to lending  growth,  if the  situation  calls for the Prudential  Regulator  to step  in, in an  attempt to slow down  property  price growth.

Q: Anything  else you’d like to share  about the  year  ahead?

DW: The Royal Commission has  significantly impacted the  profits of the  major banks.

So, if you have  a home  loan  with a major bank,  or any bank  for that  matter,  make  2020  the year  that  you shop  around by speaking  with a broker, and  see  if you can  put  more  money in your families pocket  by voting with your feet  if your bank  will not  give you a competitive interest  rate.

 

2020

As  good  as  our team  is, we can’t  tell you what  decisions  to make  in the  next 12  months.

What  we can  tell you is where  to find the  best  advice  on property,  and  who will give your property  goals  the  best  chance of success  – and  that’s Upstate.

For anyone  looking to find a suitable  investment  opportunity  in the  Northern  Beaches  area, our experience in the  area can  guide  you towards your best  option.  For those  trading  either commercial  or residential  property,  our free concierge  service and  integration  of digital media channels  will give your property  the  best  chance at  selling high.

 

So now you’re  up to speed,  let’s  make  a plan!

Reach  out  to the  team of the  Upstate team today, and  let’s give some  clarity to your 2020.

News & Insight