Most people know the property market has been booming for more than 12 months; if you are ready to start a new chapter of your life by Selling your Sunshine Coast Investment Property, Good on you! It has yet to slow as we move into 2022 here on the Sunshine Coast. Or has it?
We see on the front line that buyer interest is still good and sales prices are still high, but buyers needed to act faster in 2021.
The media can affect buyers’ mindsets & this is already happening. The more the media talks about the possibility of interest rates rising, the more buyers will become careful with the 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 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 expected, so they may even look at a rate rise as early as Aug 2022. Media has jumped onto this.
As Aug approaches and the media talk increases, the market will slow & maybe this is already starting to happen. Buyer interest is down. I am a real estate agent, so it’s a guess. If rates don’t rise, the market will continue to steam ahead.
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.
SO AS AN INVESTOR, SHOULD YOU SELL YOUR SUNSHINE COAST PROPERTY AT THE TOP OF THE MARKET IN 2022?
It depends. Suppose you do plan to sell. I suggest doing so very soon. It would help if you had a reason to sell & a plan for 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, invest in shares, or put money into Super or Bitcoin, then selling now is the time to do it, before Aug 2022.
People talk about Selling your Sunshine Coast Investment Property at the top of the market. 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 beginning to happen to the Sydney market, so that the Sydney market may have peaked.
When I speak to someone looking to sell Sunshine Coast Investment Property, they all ask me. “What is the market doing?” Up until now, the market has been robust. We have been getting offers within days of a property going onto the market; many homes have been selling your Sunshine Coast property within a week with multiple offers. It seems to have now 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 took $1.2M and sold for around $1.4mil. When the market peaks and turns, pricing will also become a challenge. Owners and a sales agent will look at comparable recent sales and then have to adjust, realising those prices might not now be possible.
CHALLENGES OF SELLING A TENANTED PROPERTY
In a regular market, selling a tenanted home is a challenge because you can only target investors. In the boom, this has changed. Buyers have been securing properties with tenants in place and simply waiting for the lease to expire until they move in. Buyers have realised that as the market has continued to increase, they need to get in. So we have been selling tenanted properties where the lease may not end for over six 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 yet to make plans to sell, even recently bought.
What many people not living on the Sunshine Coast need to see is the vast infrastructure that’s being invested here. I’ve written about this before here. The Maroochydore CBD, the international airport, the fast internet connection to the world and now the Olympics are about ten years away. The Sunshine Coast is a highly desirable place to live and still feels undervalued compared to other hot spots in Australia.
AS AN INVESTOR, WILL INTEREST RATES AFFECT ME?
Of course, they will. We’ve all forgotten what it was 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 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.
Anyone with an investment property should speak to a mortgage broker to understand their options. Consider locking in a fixed rate for the next five years. I’m certainly going to be looking at this very soon. I usually review my loans annually, and I can generally make massive savings with some minor adjustments. Loans are not a set-and-forget. I suggest everyone should speak to Paul Olsen from Money It Is. Paul is an intelligent guy. He would look at your situation and advise you on the smartest thing to do. His service is 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 purchased a property in Woombye. Timing the market is a gamble.
I have seen buyers make mistakes. I met buyers a year ago who said they were waiting for the market to turn. If the market went up 20% 12 months ago and continues to go up in 2022 when it does correct, it’s doubtful it will update that much. In the past, Sunshine Coast property corrections have been minimal. So timing the market is a huge gamble. So while a buyer may want a penalty when the sentence comes, it may be so small they might have been better off buying into the market now.
While I have yet to learn about the stock market, my limited understanding is most smart financial planners suggest people invest in the market regardless if it’s going up or down. The idea is that even if you buy high now and it drops, over the long term, it will bounce back. Real estate is the same.
With the Cotton Tree property, Kath & I have just bought. It should go up in 2022. Then when the market turns, it may stay below what we paid. If it does, it’s no big deal because we are in for the long term and know 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. We could only get interested at $410k when we decided to keep it. It’s now valued at close to $900k. So we are relieved we kept it.
WHAT ARE THE EXPERTS SAYING
Experts and journalist are all saying different things. But here is a helpful article from SMH about the cost of loan repayments as rates rise.
SO IN CONCLUSION – SUNSHINE COAST INVESTMENT PROPERTY
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 soon. We see changes already.
If you are buying, don’t gamble the market will turn, and it is a massive risk that you might get caught out.
The Sunshine Coast is a desirable location that will always be a great investment place.
