Recap of the Jellis Craig Event
The following are my take always from a great property event put on by Jellis Craig last Friday where they had 450 real-estate professionals come together to talk about the future of property.
- Melbourne is a great market to be in for some of the following reasons, we have an influx of people migrating to Melbourne, both from overseas but also from other states (where we saw a mass migration during the lockdowns away from Melbourne.) This influx is happening now but also over the next few years, with the government forecasting a 60% growth in the population by 2050. What does that mean for us? More pressure on land!
- A key factor in the strength of Melbourne’s property market is the strength of the Commercial Private and Publicly listed Industry which have located their head offices here, meaning it is great for executives and job opportunities.
- Melbourne’s high income earners are living close to the city and prefer the Bayside coast, so in terms of picking a suburb to invest in think about the market you are looking to sell to,
- Millennials will be passing through a peak income in the 2020’s where the average age of max income is 43 years old for full-time and 41 years old for part-time employees, and this coincides with the time that they have max pressure on homes and space with younger children – meaning it is the time that they have both the need and money to upgrade their housing situation and invest in the elusive ‘forever home’ with all the bells and whistles.
What this means is that as renovators or property developers we should be looking at pitching our high-end product to this market and ensuring our ‘product’ or homes have the essentials that this demographic is looking at.
- There are still more challenges ahead with the rapid rate hikes and we need to see how this plays out. Economic conditions are set to weaken and the labour markets which have seen a lack of workers will be slowly resolving with some influx of people which is already taking effect.
- On the flip side of this inventory is still very low and the real estate market is a supply and demand market. Finished homes are selling well as people are cautious about building and renovating, they are both valuing time and experience that they can have now and there is a lot of fear and uncertainty about both the cost of building and the security of builders.
From BuildHer’s perspective this looks like it is set to change over the year head, but it is meaning you can buy unrenovated sites and homes better now that you have been able to in the past few years, where fear of missing out (FOMO) and desperation in a rising market has driven unliveable and compromised stock to the point where they are not viable to renovate and make a profit.
Buyer sentiment and stock drives the pricing of homes and we should be seeing with a stabilising of interest rates a return to confidence in the market, which is good news for home owners, renovators and developers.
It was a great event to survey some of the factors effecting the real estate market and our sentiment at the conclusion was that we may still have some moments of unrest in our future, but overall we are still looking at solid growth, albeit not at the unsustainable rate we have seen.
Now is a great time for investing in unrenovated stock, but we need to be smart and careful about how we position our products and understand the costs, particularly construction costs which have seen a strong rise in the last two years.
If you want to learn more about renovating for profit and how we see the market playing out, we are running a FREE online Stop Dreaming, Start Renovating for Profit event over 2 evenings, Monday 5th and Tuesday 6th June.
Sign up or register here!