Real estate investor and YouTuber PK Gupta recently shared four trends he expects to see in the coming year and how you can capitalize on this information to make smart property buying decisions in the next 12 months.
- Continued price growth
Looking at the numbers for the last 12 months, some might think that 2021 was the best year to invest in real estate. According to Mr. Gupta, it was and was not.
2022 will bring many investment opportunities in some Australian regions that will see even greater growth this year than last. It’s just that as the national growth figures are released they won’t reflect the opportunity that exists in certain niches as they are weighted towards the mega markets of Sydney and Melbourne – where things should slow down.
This is why investors should take a microscopic approach to their research when anticipating an upcoming purchase.
Barring a catastrophic event, Mr. Gupta predicts a 20% growth rate nationwide over the next year. But smaller markets – like Brisbane, which is benefiting from the infrastructure boom of the upcoming Olympics – could easily overtake that.
- The evolution of the sea is slowing down
Regional migration away from capitals will continue in 2022, but the rate of migration is expected to slow from the almost frenetic approach we experienced in 2021, according to Gupta.
But does that mean regional locations will come down in price?
“Absolutely not, don’t confuse the two things,” Mr Gupta said. “This does not mean that the population of regional cities and regional centers of 50 to 500,000 inhabitants will decrease; it just won’t grow at the same rate.
And in areas where supply is still tight and permits for new construction are difficult to obtain – like in Shepparton or Warrnambool, for example – prices still have the potential to rise.
“So many of these regional areas will actually outperform this prediction by about 20% growth in 2022,” Gupta predicted.
“They will actually achieve 30, 40, 50 percent growth, and that’s a very, very good thing for both real estate investors and tenants,” he said. “Because in many of these regional locations, it is almost impossible to find a rental property. When there is no supply, tenants need investors to invest in so that they can actually have a place to live.
- Rent to soar
Rents are already rising, especially in regional areas that have seen an influx of new residents, and this will continue throughout the year and as the opening of borders allows more people to enter the country.
“The laws of supply and demand suggest rents will rise, especially in regional areas,” Gupta said. “My clients have already realized a rent increase of $50 to $150 per week this year, either in early 2022 or late 2021 compared to 12 months ago,” He shared.
For those who don’t already own an investment property, he advises market participants to be optimistic about returns.
“Don’t just take the yield at face value, you know that even if you only get a 4.5% yield, it will become 5% or 5.5% as this tight rental market gets worse. will play over the next 12 months.”
- Population growth in the north and west
“The fourth thing you need to watch in 2022 in the Australian property market is that migration from Melbourne, migration from Sydney to Queensland and west to South Australia to WA will continue to trigger,” advised M .Gupta.
City dwellers in Sydney and Melbourne continue to move, and data shows they are not swapping one big city for another. Queensland has been the biggest beneficiary of this trend, and markets like the Gold Coast, Toowoomba, Townsville and Bundaberg will continue to see growth.
“I’m not saying you can just blindly jump in and invest in any of these areas,” Gupta said, but he does consider them great areas to focus your research on.
“There are going to be suburbs in each of these areas, believe it or not, that will grow 10, 20, 30 percent in value in 2022.”