Green Square Blog

There have been a number of new developments coming on and a lot of opportunities to buy for a bit of value at the same time. Many of these properties are coming back on the market before the project is finished. The Infinity by Crown project is a great example of this. This was the place where one sales release back in 2015 saw $100 million worth of apartments sell in the first hour. The 326 apartments ended up selling for $350 million by 3pm on that launch day. It’s a different story now. A lot of those are back on the market and likely to sell at a loss from their off-the-plan price tags. And it is still not due to be completed until 2019.

There have been some projects open in recent months, such as The Finery in Lachlan Street and Emblem in Waterloo. At the time of writing this, The Finery had nine apartments for sale starting at $695,000 for a one-bedder, $1.23 million for two beds and $1.565 million for three. These prices are similar to their launch sale price of 2016, so it turns out there was no reason to despair if you missed out back then but are still interested.

We will see more resales before completion because people have either found it too hard to borrow money or paid too much off the plan. The inner city is currently a stock-heavy market and this has a lot to do with the hype whipped up by the media. Every Monday my phone is ringing because people are hearing in the media that the market is going to drop 30 per cent. When the market is raging, everyone has FOMO, the fear of missing out. But at the moment, they are talking about FONGO, the fear of not getting out.

Be careful! Don’t believe everything you read and hear in the media. Property is a cycle and a lot of people may have not seen a plateau or correction before. You don’t want to rush to sell when prices are falling, so if you don’t need to, just hang tight. If your situation is right, you could access the equity you might have made from investments to actually buy more property. You may get a really good deal. The positive is that there will be great buying opportunities. If you don’t panic when prices fall and you hold, you will make money over the long term.

Landlords who do hang on to their property however will need to adjust expectations around rental return. Ordinarily, when prices are struggling, rents are on the rise, due to supply and demand. But in Green Square, the large number of new properties coming back onto the market means sellers want to have them tenanted to add to their appeal to investors. To do this, they may have to drop the rent a bit to compete with the other stock. So if brand new apartments are lowering their rents, this has a flow on effect to established apartments also. Landlords are not used to this; they are used to a rent increase every 12 months but at the moment, it’s better to meet the market and make sure your property is tenanted.

Published by Trevor Back

Principal, Raine & Horne Green Square

Phone: 0428 006 900

[email protected]

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