As you may already know, property investing is constantly changing. Here are the 5 key market shakers that are transforming the way investors build their property portfolios to achieve growth in the new property landscape.
1. Globalisation
The world has become smaller, and we can no longer think of New Zealand as being tucked away at the bottom on the planet. That’s why it’s important to find a balance of location types in your portfolio.
The reality is that many investors are priced out of Global Cities (for example, Sydney); however, that still leaves some very affordable options in the New World Cities and Primate Cities.
New World Cities (such as Auckland or Brisbane) are typically mid-sized, are highly live-able with good infrastructure and are often supported by global specialisms. These cities are attracting talent and corporations as well as a disproportionate share of global real estate investment.
Primate Cities, such as Wellington or Christchurch, are economically strong in their own right and are the biggest city in their region, but aren’t as expensive as New World Cities.
Market growth comes from the property cycle and spreading your assets across the different markets gives you the benefit and balance to reap the rewards and withstand the downturns.
2. The Internet
Knowledge is power and today it is only a click away. There is a huge resource of information at our fingertips, there is no excuse not to be aware of the changing conditions and factors that are influencing our property market.
3. The Knowledge Worker
The rise of the knowledge worker (as opposed to the manual worker) has a huge impact on the property market. With the growth of the global technology industry has come the age of automation, with an ever-growing employment space for jobs such as software engineers, systems architects, and programmers.
In fact, what people do for a living has changed so much that it is almost unrecognisable compared to how it was just a few decades ago. This is drastically changing how cities are working and where people choose to live.
4. The Sharing Economy
The Uber story is a brilliant example of this, and has turned the taxi industry on its head. In the real estate sector, Airbnb is a game changer, with the ability to massively affect your returns on properties in the right locations. The Airbnb model allows everyday investors to tap into a market (and yield) that didn’t exist only a few years ago.
5. The Dawn of Great Design
There are 7 top design principles we look for when we select a property deal. These are:
- The pedigree of the architect and/or builder
- Space and volume, internal flow, and frontage
- Light and ventilation
- Fixtures and fittings
- Aspect, outlook or outdoor space
- Amenity within or nearby
- Parking and storage
We call this “The flight to quality.” The key idea here is that the best growth comes from property that appeals to the owner occupier. You as the investor are protecting your returns and value (even if the market overall is underperforming) when you focus on good quality stock in desired locations.
Property investing is moving at pace –
This presents a challenge for any investor, but particularly those who are trying to go it alone. Knowing exactly how to be proactive and adapt your strategy to suit will make all the difference to your investing outcome.
Our advice to you is to get support and mentoring from experienced investors. This knowledge and proven strategy is invaluable as it saves you time, money, and help you to avoid the wrong investing decisions.
Start by attending a Property Investment Masterclass near you. Tickets are free, but the event is high value.
See you then!
– Sue