The Reality of the Australian Property Market: What Affects a Property’s Value?
When was the last time you took a good hard look at your property and its possibilities as an investment? What about if you are entering the market for the first time?
Dipping your toe into the property market with set ideals for what you want as a family home, investment property or commercial enterprise can be daunting. However, if you keep in mind that all property is an investment, you can plan ahead and minimise any risk of depreciation and macroeconomic fluctuations in the market.
The team at KDD Conveyancing Services have highlighted some key factors to consider when considering property value.
1. ECONOMIC FACTORS
Choosing when to buy is important when considering buying at the best value for you. Interest rates rise when the economy is performing poorly, making it less desirable for people to go property hunting when mortgages and home loan rates are increasing. Patience is a virtue. Waiting until interest rates are up and average house prices are down is often a good time to buy. Conversely, selling when the economy is booming and house prices high is favourable. In this market, there are typically more buyers and less homes for sale, resulting in more enthusiasm for your property.
2. POLITICAL FACTORS
As a property owner, politics can impact the growth of your property portfolio. Policies such as permitted negative gearing make it favourable to expand into more than one property, assuming that the properties are in use and well maintained. For first-home buyers, the rise of inflation increases capital growth at the risk of higher interest rates. A good way to dip your toe into the market in this situation is to not consider the first property to buy as your ideal home, but instead as a stepping stone to the next home you buy.
3. LOCATION AND PROXIMITY
Where you buy is just as important as what you buy. Trending locations for residential growth tend to increase in value when amenities like childcare facilities, shopping centres, schools and medical practices are nearby. Realistically, you can have the best house on the worst street or the worst house in the best suburb and still come out on top when it comes to property value if the potential outlook of the location and community are positive.
For commercial areas, the development of roads can increase traffic to industrial areas, encouraging new office blocks and industrial warehouses that bring larger corporations out into the suburbs. As a bonus, new shops and retail strips like cafés and parking structures close by increase the overall value of the commercial premises.
4. THE ‘KERB APPEAL’
Visual aesthetics always play a part in how the market views your property, including regular maintenance and upkeep. Adding some landscaping such as a few pot plants, mowing the lawn and adding window shutters can add character and charm to your home.
For commercial properties, the accessibility of the property from the road and the visibility of your brand by passers-by increase the demand for the location. If your business depends upon walk-in customers you could opt for an on-point window display and branded signage that is eye-catching and memorable.
5. AGE AND CONDITION
The age of a property has its own unique value, capturing the beauty of the architecture of years gone by and making a home feel lived in. However, with older homes, comes the perceived cost of maintenance. Keeping an older home in good condition for the next buyers is a good way to keep the value up, as well as removing any costly or irreplaceable items that are non-essential.
On the opposite side, modernisation is a fast-moving trend in the market. The latest appliance and new smart home gadgets require accessible electrical wiring and favourable floor layouts to work optimally. When considering a property to be converted into a smart home, it would be preferable to speak to a professional about the installations needed to upgrade your home.
HOW KDD CAN HELP YOU
KDD Conveyancing offers practical services for property settlements in Perth, and across Western Australia at a reasonable cost. If you’ve bought or sold a property and need conveyancing advice, please contact us, we’d love to chat and share our wisdom.
You can also follow our blog for more insightful articles on property conveyancing and discover new trends in the Australian real estate market.
