The Australian housing market has been experiencing a downslide since the last quarter of 2018 and has made many investors wary of the current scenario. While the commercial property has not been affected by this tumble, it has left many people rethinking their investment strategy. The economic growth has been slower in 2019, and the dwelling prices have nose-dived in the capital cities, which have contributed to the fears of the property owners.
It has been often quoted that timing is the most crucial thing in property markets. However, recent trends have proven otherwise. A far-sighted investor can make a smart investment without risking their savings at any time. So what if the housing sector doesn’t seem too charming now? You can always place your bets on the growing commercial real estate market.
Thus if you are looking for commercial property for sale in Australia, you need not wait for the right time. In fact, you can invest now in a premium asset and become financially independent in the future as the demand for classy working spaces is not going to fade out soon. Here is how to understand the timing bit.
Enter Into Long Relationships With Your Assets
The only thing that you need to worry about is knowledge of the market and data related to it. If you are waiting for the time when the prices will fall to make an investment and leverage the counter-cyclical effect, you are making a mistake. The reason is apparent that you will have to wait for years till the prices fall and till then many good opportunities might be lost. The key is to realise that there is no right time. In every situation, you will be facing challenges and apprehensions.
The timing doesn’t matter if you hold on to the property for a long time. In any case, you will be making a healthy profit if you sell an asset after 15 to 20 years of acquisition. Commercial real estate is a long-term investment which cannot turn you into a millionaire overnight. You need to invest time along with money to reap the benefits of your deposited finance.
Buying The Right Property Is Essential
Instead of the right timing, you must concentrate on finding the right property. The high-performing properties will definitely become more valuable than the average capital growth. As the housing prices are falling, many investors are waiting for the commercial real estate to plummet and then they will invest. However, this is the wrong move because no one can predict when the market will hit bottom. This is the right time to put your money in offices and industrial properties as the prices have just begun to rise.
They are not over the roof as of now and will continue to grow as employment rate is looking better than ever and demand for offices is escalating. Procrastinating can prove costly in the long run. The vacancy rates are dropping in the urban areas and the adjoining suburbs, which guarantee a satisfying cash flow through leasing. A poor quality property will not get the returns that you have been wanting. Thus select an asset which shows future growth potential.
Location Matters More Than Time
For commercial properties, the location of the office or the warehouse is of utmost importance. The place you choose must have the infrastructure to sustain corporate offices and must be easily accessible by public transport. The surrounding locality must have similar businesses operating in the area, and there must be enough places for entertainment and leisure.
It has become vital to have restaurants, bars and shopping precincts close to the office buildings as the employees love to spend their evenings with friends or plan luncheons frequently. You must understand the location and the upcoming projects in the area before making your decision. You must identify those locations that will outperform in the long term. If you purchase an office building away from the city and all the hustle-bustle, you might not get the right tenants and the return you are expecting.
Future Predictions Can Be Tricky
Calculating the pulse of the market is not easy. Although it is common to estimate the highs and lows of the market, no one can judge the investor sentiment, which depends on human behaviour. Property experts can talk about alterations occurring in the size of the target market, infrastructure changes taking place, inflation, and interest rate ups and downs. However, the investment made by a person is also driven by his emotions which are quite unpredictable.
Sometimes, people can have all the knowledge but still behave irrationally due to some emotional attachment. Usually, when the property market is booming, most investors join the ever-expanding queues to purchase assets as they don’t want to miss out on a good opportunity. Similarly, when there is a fear of falling prices in the minds of the people, it is hard to get them to think about investment.
Keep Your Financial Buffer Ready
One thing that needs to be kept in mind while making an investment is that neither an upsurge nor a downfall in property prices lasts forever. Both the factors are an integral part of the sector. Short-term investment can get affected by the market trends but long-term contracts do bring fruitful results. However, when you are in this for good, you need to forget about the money for some time and concentrate on earning passive income to keep your financial buffer ready.
You will have to spend on the renovation and development of the asset, so make sure that you have the resources to maintain the property. Lastly, don’t follow the crowd or get swayed by emotions, make your decision based on rational thinking and facts available at the moment.
The recent upheavals faced by the housing sector have shaken the investor confidence a little. However, if you are looking for commercial real estate for sale in Australia, you need not be worried as the growth in jobs has got your covered. So don’t wait for the right time because timing should not become an impediment in making a worthwhile investment. Choosing an asset that outperforms in the long run is the key to success.
Sophie Barrett is an experienced real estate marketing professional with a specialisation in commercial property market. She has a Masters degree in marketing from the esteemed Melbourne Business School and has several property management certificates to her credit. Her shrewd marketing policies and business acumen have led to the most rewarding property deals in the major capital cities of Melbourne, Sydney and Perth. She is a popular name in the real estate market and has been serving the industry for almost two decades now. CommercialProperty2Sell is proud to partner with her for some astute discussions and advice on the booming sector.
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