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.
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.
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.
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.