2016 is shaping up as a big year for the property market, whether you’re a landlord, an investor or a would-be homebuyer. Not only is it an election year, it’s a year where the Government have their eyes firmly fixed on tax reform – both GST and negative gearing are under close examination. Naturally, this makes industry bodies, the business community and property investors nervous.

But it’s not all doom and gloom: in today’s blog, we look at what you can reasonably expect from the property market in 2016. Softly, softly.

2015 finished on a slightly softer note for the property market nationally, leading some industry pundits to surmise that property isn’t the best place to invest. Infolio’s firm view is that any asset must be weighed up on its merits: a good property is a good property, regardless of wider market behaviours. Markets will always wax and wane, but a well-selected investment property close to amenities, transport and offering great access to the city will always be in demand.

In 2015, Infolio noticed a shift in the use of advocacy services: predominantly our advocacy services were used by investors, but we noted a sharp increase in the amount of owner-occupiers seeking our assistance to secure family homes. Often well-resourced but stymied by a rising market, owner-occupiers were worried that quality property would soon be beyond their reach. That slight softening helped ease buyer anxiety towards the end of the year – and Infolio feel confident that 2016 will continue to offer excellent investment opportunities for both investors and home-buyers alike.

Why 2016 is the year to invest

Many clients who come to Infolio are understandably concerned about ‘paying above the odds’ to purchase a property. 2016 is unlikely to force you to do so, as the market cannot continue to sustain the high rate of growth we’ve observed over the last 18 months. Like everything else in nature, property markets run on a cycle – we are either currently on or will shortly be at a pricing plateau. Phew.

You can also take some comfort from the knowledge that an interest rate increase looms – the effect of which will only compound the dampening effect that reduced investment loan lending has already taken on investor appetites. Additionally, FIRB purchasers are being somewhat discouraged from investing in Australian property courtesy of an increased stamp duty payment requirement. Baby boomers will continue to buy up on ‘bricks and mortar’ to secure their financial position, but the rules for purchasing property with SMSFs are changing to better level the playing field between owner-occupiers and investors. In short? It’s a good year for you to buy property!

Property Management and Landlord Investors

It hasn’t been all wine and roses for landlords. In 2015, CoreLogic data showed Australia recorded its lowest annual rental growth on record. Rents in our capital cities increased by just 0.3% – only Sydney and Melbourne bucking the trend. It is not uncommon that properties which leased at a premium rental 18 months ago have more recently been re-let for less. This is of course disappointing for landlords. So why the change in rental returns? There’s several factors to take into account. One is an increase in ‘off the plan’ investment properties flooding onto the market. A sudden rush of available property can suppress rental returns due to oversupply – if only for a season or two.

Tenants have also benefited from ultra-low interest rates, deciding to remove themselves from the leasing market, preferring instead to buy a home. So how should landlords best shore up their investments to retain ongoing rental income? Infolio strive to place our landlords in an optimum financial position by re-negotiating fixed leases with existing tenants. Why? Fixed leases minimize vacancy costs, while offering an additional sense of security to both tenant and landlord. Whilst a tenant cannot be compelled to re-sign a lease, we do encourage them to do so. We also attempt to negotiate rent increases when appropriate: even if only incremental, consistent and fair rental increases ensure that long-term leasing agreements do not fall out of step with market trends.

In closing, Infolio see 2016 as a year which presents new opportunities for investors seeking to grow or begin their property portfolio. We are also enthused for our home-buyer clients, who are closer than ever to obtaining premium property at fairer prices this year. If you are considering purchasing property in 2016, we invite you to collaborate with our experienced buyer advocates. As every investor’s needs are different, we dig deep to find out what you require from your next property purchase: no two motivating factors are the same!

Above all, Infolio encourage you to remember that buying property is never about ‘timing the market’. It’s about time in the market. Guess what? The time is now!