Selling your Sunshine Coast investment property at the top of the market in 2022

Selling your Sunshine Coast investment property at the top of the market in 2022

Selling your Sunshine Coast investment property at the top of the market in 2022

Most people know the property market has been booming ahead for more than 12 months now. As we move into 2022 here on the Sunshine Coast it hasn’t yet slowed. Or has it ?

What we are seeing on the front line is buyer interest is still good and sales prices are still strong, but buyers are not acting as fast as they were in 2021.

The media has the ability to affect buyers’ mindset & it seems to me this is already happening. The more the media talks about the possibility of interest rates rising the more buyers will become careful with a slowing of the property market.

In 2021 we had been getting offers on properties within the first few days of them going to market. It seems this has started to change slightly. In the past when the market has slowed it took on average 120 days to make a sale, often with no buyers at all showing up to open homes, and while this is not the case right now in 2022, I assume this will return at some stage as interest rates do increase.

For the last few years the reserve bank has indicated they would look at a rate rise in 2023. Recently the reserve bank explained the economy has been performing better than they expected so they may even look at a rate rise as early as Aug 2022. Media has jumped onto this.

It’s my experience as Aug approaches and the media talk increases the market will slow & maybe this is already starting to happen. Buyer interest is down.  But hey I am just a real estate agent so it’s just a guess. If rates don’t rise I assume the market will continue to steam ahead.

The perfect thing for south facing homes is massive windows to bring as much light in as possible. Just like this home in Twin Waters

Luckily the real estate market on the Sunshine Coast is slightly protected. In the past the Sunshine Coast market has never really had any big falls, just small ones. So if you bought in 2021 and the market has a correction in late 2022 or 2023 it’s likely the value will not drop below what you paid.

Selling at the top of the market
Leaving Mooloolaba Marina for the Moreton Island

SO AS AN INVESTOR SHOULD YOU SELL YOUR SUNSHINE COAST PROPERTY IN AT THE TOP OF THE MARKET IN 2022?

It depends. If you do plan to sell. I suggest doing so very soon. You need a reason to sell & a plan with what to do with the profits. For me I am not selling. I’m in property investing for the long term like all property investors should be. (I bought an investment in Cotton Tree in Jan 2022 ). But if you want to access profit to pay off your home mortgage or invest in shares or put money into super, or bitcoin, then yes selling now would be the time to do it and probably before Aug 2022.   

People talk about selling at the top of the market. The thing is the only way to know we are at the top of the market is when the market starts to go down. I read this week that this is now starting to happen to the Sydney market, so it would seem it’s possible the Sydney market has now peaked. 

When I speak to someone looking at selling, they all ask me . “What is the market doing?” Up until now the market has been very strong. We have been getting offers within days of a property going onto the market, many homes have been selling within a week with multiple offers. This seems to now have slowed. 

In the boom, pricing properties has been a challenge. Recently we assumed a property would sell for around $800k and due to competitive interest it sold for just over $1mil. Another we assumed $1.2M and sold for around $1.4mil. When the market peaks and turns pricing will also become a challenge. Owners and sales agent will look at comparable recent sales and then have to adjust, realising those prices might not now be possible. 

Selling Sunshine Coast investment in 2022
Home in Sunrise Beach Sunshine Coast looking towards Coolum
Challenges of selling a tenanted property
Ted the groodle at Coolum Beach

CHALLENGES OF SELLING A TENANTED PROPERTY

In a normal market, selling a home that is tenanted is a challenge because you can really only target investors. In the boom, this has changed. Buyers have been securing properties with tenants in place then simply just waiting for the lease to expire until they move in. Buyers have realised that as the market has continued to go up they need to get in. So we have been selling tenanted properties where the lease may not end for over 6 months and the buyers are just waiting. Happy they are now in the market and the current boom.

AS AN INVESTOR SHOULD YOU HOLD IN 2022?

Yes. You should only sell your investment property if you need access to the profits for something else. If not hold. Even if the market on the Sunshine Coast slows and drops, real estate investing is for the long term. As mentioned before I have no plans to sell and even recently bought .

What many people not living on the Sunshine Coast don’t see is the huge infrastructure that’s being invested here. I’ve written about this before here. The Maroochydore CBD, international airport, the fast internet connection to the world and now the Olympics is about 10 years away. The Sunshine Coast is an extremely desirable place to live and still feels undervalued compared to other desirable places in Australia. 

Selling Sunshine Coast investment in 2022
Mooloolaba Marina Beach with Point Cartwright in the foreground

AS AN INVESTOR WILL INTEREST RATES AFFECT ME?

Of course they will. We’ve all forgotten what it’s like when rates were 9%. I remember in the 80s when rates were 18%. Back then 9% felt like value. As an investor you need to start to plan now for rate rises. 

Some experts suggest that on a $400,000 loan repayments may increase to as much as an extra $100 per week.

Investor buy now and wait
Cruising down the coast with Mooloolaba in the background

I recommend anyone with an investment property should speak to a mortgage broker to understand what options you have. You may want to consider locking in a fixed rate for the next 5 years. I’m certainly going to be looking at this very soon. I usually review my loans annually and I usually can make massive savings with some small adjustments. Loans are not a set and forget. I suggest everyone should speak to Paul Olsen from Money It Is. Paul is a smart guy. He would look at your individual situation and give you advice on the smartest thing to do. His service is totally free. So why wouldn’t you. Paul is on 0414 752 235 or paul@moneyitis.com.au or his website is here.

 

SHOULD INVESTORS NOT BUY NOW AND WAIT?

My 21 year old daughter just bought her first investment property, I just bought another investment property in Cotton Tree and one of our team just bought a property in Woombye. Timing the market is a gamble. 

I have seen buyers make mistakes. I’ve met buyers a year ago who have said they are waiting for the market to turn. The thing is if the market went up 20% 12 months ago and continues to go up in 2022 when it does correct it’s very unlikely it will correct that much. In the past Sunshine Coast property corrections have been very small.  So timing the market is a huge gamble. So while a buyer may want a correction when the correction comes, it may be so small, they might have been better off buying into the market now. 

While I have no idea about the stock market. My limited understanding is most smart financial planners suggest people investing into the market regardless if it’s going up or down. The idea being that even if you buy high now and it drops, over the long term it will bounce back. I suppose real estate is the same. 

With the Cotton Tree property Kath & I have just bought. I assume it will go up in 2022. Then when the market turns it may not fall below what we paid. If it does, it’s no big deal because we are in for the long term and know that it will bounce back. 

Many years ago when the market was flat we almost sold an investment in Buderim. We had hoped for a $420k sale. Could only get interest at $410k and while we decided to keep it. It’s now valued close to $900k. So we are relieved we kept it.

Timing the market
Mooloolaba Spit with Point Cartwright in the background
SMH market 2022
Noosa Caravan Camp Kitchen with views over Noosa River

SO IN CONCLUSION

Property investing is for the long term. Hold and only sell if you have plans for the profit you make from the sale. If you want to sell your investment in 2022, do it very soon. We are seeing changes already. 

If you are buying. Don’t gamble the market will turn, it is a massive risk that you might get caught out in.

The Sunshine Coast is a desirable location that will always be a great place to invest in. 

Selling Sunshine Coast investment in 2022
Entrance to a home in Peregian Beach

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