With the commercial and residential property bubbles often being a key talking point in the press, emerging trends and technologies can offer property developers insight into the market as well as provide guidance on how best to approach and manage development projects.
We've identified some of the recent key trends we've seen and being aware of them can help both developers and lead selling agents stay ahead of the curve.
Increase in First-Home Buyers in the Market
Despite soaring property prices for approximately five years, signs for 2018 look a little more promising. While property values are forecasted to end higher than they started, growth might occur at a slower pace throughout the year.
As price growth stabilises, investor lending cools and auction rates clear, it is evident that the market has primed itself for greater investment. The Australian Prudential Regulation Authority (APRA) has played a key role in this process. Through their macro-prudential measures for tightened lending requirements, this has created space for first home buyers to move back into the market. Despite experiencing a dip of buyers entering the market since the global financial crisis, APRA's efforts have led to an increase to 17.4% as of 2017.
This means that with risk averse home buyers more willing to enter the market, property developers and real estate agents will likely experience an increase in business and sales, as well as a more favourable climate for selling.
A Slowdown in Property Investment?
With signs of slower growth, it is likely that this may deter property investors from flooding the market with their cash. However, forward-thinking investors might see this period as an opportunity to invest at a time where competition in the property market has reduced, allowing them to make investment gains in the long run.
At the same time, however, property hotspots such as Melbourne and Sydney are reportedly looking extremely lucrative to both first home buyers and investors. Such cities include Brisbane and Hobart, indicating that investment might now fan out beyond the usual real estate hotspots. In fact, Hobart was the best performing capital city in 2017.
The Rise of Renovations
With the increase of stamp duty taxes on property transfers, it is likely that homeowners will opt to renovate, instead of upgrading their properties. Data indicates that the stamp duty due on a median-priced home in cities such as Sydney and Melbourne are presently around AUD $50,000.
Given that transferring now involves a heavy cost to buyer finances, most are now opting for renovation loans instead. An increase in such loans was recorded in 2017 and this trend is expected to continue well into 2018. Homeowners are also leveraging the extra equity in their property to contribute to renovation costs, making this option a cost-effective choice for those who can't afford to transfer with the present market conditions.
Staying ahead: Software for Selling Teams
In this context, digital tools for agents play a critical role in capitalising on increased buyer confidence in the market. What's required is to consistently interact with your client, address their concerns, and provide them with helpful nudges in the right direction. However, given the heavy workload most agents experience, such personalised communication is a challenge. Customer Relationship Management (CRM) software is a digital solution that seeks to address this challenge, allowing agents to provide the most to their buyers with minimal time and effort.
Additionally, given the level of risk currently permeating the market, effective risk assessment tools have never been more important. Software for real estate agents include smart tools that give practitioners the ability to generate sophisticated risk analysis and reports, allowing them to make the most effective decisions for both their buyers and the business.
Given the nature of the markets and the high standards of buyers, ensuring fantastic service delivery is a critical component of performance in the industry.
Property Shell is a leading service provider in the area of property development software. If you’d like to learn more, contact us to learn how we’re currently partnering with the property development and real estate industry to manage the changing shape of the property market in Australia.