With the impending arrival of the spring season, which traditionally marks the prime period for residential property transactions in many parts of Australia, leading real estate group Raine & Horne is encouraging investors and landlords to capitalise on increased activity to maximise investment returns.
Data from Raine & Horne reveals a notable uptick in attendance at open for inspections (OFIs). In July, the number of groups attending OFIs was approximately 10% higher than in the autumn and an impressive 37% higher when compared to the summer months.
According to Ms Maria Milillo, Head of Property Management at Raine & Horne, during the milder spring months, with lighter and brighter days, property inspections become more appealing for buyers including aspiring investors than the scorching summer or freezing winter months.
“The surge in demand for properties makes this spring a strategic time for investors looking to rebalance their portfolios by listing their properties on the market,” said Ms Milillo.
“Concurrently, a multitude of markets are still grappling with a shortage of property listings, which offers investors considering a sale during spring an exceptional chance to achieve a decent sales results due to reduced competition.”
According to Ms Milillo fewer listings become especially significant for landlords considering a sale given the backdrop of sustained property price increases since the start of the year. Notably, CoreLogic's data reveals a 4.1% rise in the Australian real estate market since hitting a low point in February[i].
Investors seeking to expand their portfolios
According to Raine & Horne’s data, for those investors seeking to broaden their portfolios, there was an approximately 15% uptick in appraisals in July compared to April.
“This means it’s fair to expect that more properties will hit the market as the weather warms up,” noted Ms Milillo.
“Investors and self-managed super funds contemplating expanding their property portfolios should also take note of the Reserve Bank’s decision to halt interest rate rises.
“While there might be more rate rises, we are closer to the end than the beginning of the rate hiking cycle that started 18 months ago. This development presents an excellent opportunity for aspiring landlords to seize the moment this spring and make their moves confidently.”
Mr John Katergarakis, the Head of Property Management at Raine & Horne Green Square and Raine & Horne Bexley/Beverly Hills, concurs that spring presents a favourable opportunity for real estate investment in Eastern Sydney.
As the warmer months approach, Mr Katergarakis anticipates a substantial reduction in vacancy rates for high-quality rental properties. He believes that this transition offers a prime opportunity for potential investors to enter the market. Particularly, he highlights the demand for two-bedroom, two-bathroom apartments valued at approximately $1 million, whether situated in Waterloo or Bexley.
“These types of apartments have gained popularity among professional couples who utilise the second bedroom as a home office, as well as among singles who opt to share rent,” Mr Katergarakis said.
“The presence of a second bathroom enables flat mates to have separate living arrangements, and these apartments also appeal to young families starting out.
“Furthermore, these premium apartments are currently being rented out for approximately $900 to $1,000 per week, translating to an impressive yield of almost 5%.
“Given interest rates are projected to fall in 2024, these popular properties are expected to become even more enticing options for investors this spring.”
In Adelaide, Gwen Levesque, Co-Principal at Raine & Horne Gawler/Munno Para, has noted a growing investor phenomenon.
“Despite many still attending open for inspections (OFIs), investors are increasingly purchasing properties in suburbs like Andrews Farm, Munno Para West, and Gawler without the necessity of a physical property visit,” Ms Levesque said.
“The convenience of virtual tours and online resources has allowed investors to explore properties from the comfort of their own homes.”
According to Ms Levesque the forthcoming spring season holds promise for investors due to several factors.
“With interest rates currently stable, it presents a favourable time for investors to consider acquiring properties.
“We also anticipate a surge in property listings during spring, driven by the pleasant weather and an overall improved mood that encourages both selling and buying. As the temperature rises, so does the activity in the real estate market,” Ms Levesque added.
Investors who are interested to know what their property could achieve in the current market can request an obligation-free property appraisal with the experienced team at Raine & Horne.