What strategies to use this spring if you are looking to invest

Spring, together with its predicted fresh crop of stock, is just around the corner, so when should investors start harvesting the new opportunities and what exactly should they be looking out for? 

“They should be starting as soon as possible, and getting to a property in the first week of the campaign where there are more options to strategise, like making an offer before auction,” says Michelle May, founder and principal of her eponymous buyers’ agency. 

“Make sure you’re on all the alerts and agents’ emails and have already let them know what you’re looking for.

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“Also, don’t rely on the rent appraisal they give you on an investment property; commission an independent one to compare it with.”

She also advises buyers to ask property managers what could be done to improve the yield of a house or unit.

This could be installing air-conditioning, wardrobes or blinds, giving it a fresh coat of paint or replacing the flooring. 

“In addition, as the vast majority of investors buy apartments, scarcity there is key,” May says.

“You want to buy in a boutique block with a maximum of 24 to 30 apartments, with more owner-occupiers than renters, and check how well it’s looked after by checking the bins and gardens at the back.”

That the early bird gets the worm is also the belief of Propertybuyer chief excecutive Rich Harvey.

“There is a massive groundswell of pent-up demand,” he says. “So it’s good to get in early.

“I’m predicting a rate cut in February, and once that comes, it’ll restore confidence. Then, by the time the second cut comes, the market will re-accelerate and prices will rise.

“At the same time, don’t get caught up too much on Insta posts and pretty pictures of properties.

“:But my advice is to buy an established property as then you know you’re paying market value.” 

For a brand-new place, you’re paying a retail price, Harvey warns, and with shiny new house and land packages on greenfield sites, there’s not a lot of restriction on supply. 

“I’m always looking for areas with low supply and high demand, and you can still get depreciation on an old property,” he says.

As for where to invest, Perth, Brisbane and Adelaide have performed very strongly over the past year, with substantial capital growth, says Michael Yardney, chief executive of Metropole Property Strategists. 

The latest Domain House Price Report shows the median house price rose 23.8 per cent in Perth, 16.9 per cent in Brisbane and 16 per cent in Adelaide.

Sydney did reasonably well at 7.8 per cent, but Melbourne underperformed at 3.6 per cent.

“That was because of the economic challenges for a government that’s got into a bit of debt and the economy recovering slowly from COVID,” Yardney says.

“But there’s a lot of thought that Melbourne is where Perth and Brisbane were three years ago – and now, with more than its share of migration and very low vacancy rates, it could revert to better growth.

“The gap between Sydney and Melbourne prices has never been as big and Melbourne does have a huge undersupply of property with very little stock coming on. So Melbourne does offer a lot of opportunities …”