After a year of staggering price growth across Australia, many investors might be wondering: where do we go from here?
Property investor and YouTuber PK Gupta recently shared four trends he predicts to see in the coming year and how you can capitalise on this insight to make smart property buying decisions in the 12 months ahead.
- Continued price growth
Looking at the numbers of the past 12 months, some might be thinking that 2021 was the best year to invest in property. According to Mr Gupta, it both was and it wasn’t.
2022 will bring many opportunities to invest in certain Australian locales that will see even greater growth this year than they did in the last. It’s just that as the national numbers for growth roll out, they won’t reflect the opportunity that exists in some niche areas as they’re weighted towards the mega markets of Sydney and Melbourne – where things are expected to slow.
That’s why investors need to take a micro approach to their research as they anticipate a next purchase.
Barring something catastrophic, Mr Gupta foresees a 20 per cent rate of growth nationally over the next year. But smaller markets – like Brisbane, as it rides on the infrastructure boom of the coming Olympics – could easily top that.
- Sea changing slows
Regional migration away from capital cities will carry on in 2022, but the rate of migration is likely to slow down from the almost frenzied approach that we saw in 2021, according to Mr Gupta.
But does that mean that regional locations will drop in price?
“Absolutely not, don’t get the two things confused,” Mr Gupta said. “That doesn’t mean the population of regional towns and regional centres with a population of 50 to 500 000 people will drop; it just won’t grow at the same pace.”
“So many of these regional areas will actually outperform that prediction of about 20 per cent growth in 2022,” Mr Gupta predicted.
“They’ll actually achieve 30, 40, 50 per cent growth, and that’s just a really, really good thing for both property investors and also renters,” he said. “Because in many of these regional locations, it’s almost impossible to find a rental property. When there’s no supply, renters need investors to come in and invest so that they can actually have housing to live in.”
- Rent to skyrocket
Rents are already going up, particularly in regional areas that have received an influx of new residents, and that will continue throughout the year and as open borders allow more entrants into the country.
“The laws of supply and demand suggest that rents will increase, especially in regional areas,” Mr Gupta said. “My clients have already achieved a $50 to $150 per week rent rise this year, either at the start of 2022 or at the end of 2021 versus 12 months ago,” he shared.
For those who don’t already have an investment property, he advises those in the market to be optimistic about yields.
“Don’t just take the yield at face value, you know even if you’re just getting a yield of 4.5 per cent, that is going to become 5 per cent or 5.5 per cent as this tight rental market plays out over the next 12 months.”
- North and west population creep
“The fourth thing you need to look out for in 2022 in the Australian property market is that the migration from Melbourne, the migration from Sydney up towards Queensland and west towards South Australia towards WA will continue to fire,” Mr Gupta advised.
City dwellers from Sydney and Melbourne are continuing to make moves, and the data shows they’re not swapping one big town for another. Queensland has been the biggest beneficiary of this trend, and markets like the Gold Coast, Toowoomba, Townsville and Bundaberg will continue to see growth.
“I’m not saying you can just blindly go off and invest in any of these,” Mr Gupta said, but he does see them as being great areas to focus your research.
“There are going to be suburbs within each of these areas, believe it or not, that will rise by 10, 20, 30 per cent in value in 2022.”
This article was originally published on Smart Property Investment.