In a recent episode of Property Investing Insights with Right Property Group, Phil Tarrant along with Steve Waters and Victor Kumar discussed why certain segments of property investors have currently found themselves in uncertain territory.
“I think we need to be brutally honest,” the trio agreed. “Is there going to be pain in certain parts of the market for segments of people? Absolutely.”
The landscape of property investment has been in flux since the onset of the COVID-19 pandemic. Broader changes in the market have changed property investors’ bottom lines, as well as the market conditions that they’re operating in.
With some investors now selling their investment properties to protect their primary dwelling due to tightened financial situations, they’re looking at a very different selling situation than 12 months ago, or when they got into certain markets.
As Mr Waters explained:
“What happens when we get times of flux within economies is that people always want to protect the castle, which is their principal place of residence. So, everything else will go before that. What we’re seeing now is that in some areas, the majority of stock on market is investor stock. So, people are selling their investment properties.”
On top of that, holiday homes have also been quick to return to the market with the second homes that cashed-up Aussies invested in while weathering Australian lockdowns now having an impact on so-called “lifestyle markets”.
“You can see it in the data, that people are offloading the holiday homes that they’ve purchased during COVID and perhaps thought they’d retain that forever and ever and ever.
“And we can see that in the holiday-led areas that rents are falling. We can see stock on market increasing quickly, like quick, hard and fast. And that will continue to happen until there’s