Property Sector Predictions For 2019
With 2019 now in full swing, it’s safe to say that things are already shaping up to take a dramatic turn in the property sector. Those changes will affect everyone from homeowners and tenants to landlords and property investors. As such, staying on top of the challenge is vital.
When it comes to predictions – here’s what to expect from the property sector in 2019, at home and abroad.
People Will Be Happy To Rent
Changes to government legislation in the UK, Australia, and New Zealand (among other countries) are due to put tenants in a far better position than ever before.
While this will force landlords and property investors to alter their approach, it will also bring a sense of long term stability.
Longer Tenancy Agreements
In Germany, where more people rent (circa 90% in Berlin) tenancy agreements are very long by our standards, with a minimum term of two years and some stretching to 30 years! The periodic tenancy is prolific in our neck of the woods however change is in the wind.
Other countries have taken notice and law changes include the removal of short-term agreements, giving tenants the opportunity to stay for three years without landlords selling up (UK). Expect longer tenancies to be a discussion elsewhere like in Australia and New Zealand.
Another reason people will be happy renting is the inclusion of favourable pet clauses and allowing them to have pets regardless of landlord wishes (Victoria). While this action horrifies Landlords, it’s most likely to popular in cat loving New Zealand where per capita cat ownership is the highest.
Improved Living Standards
A number of other reforms will improve living standards while protecting their living status. Most landlords are discerning enough to make sure their rental properties are indeed habitable no matter what the climate. However there are horror stories in the media that rightly shame uncaring landlords for their appalling rental properties.
When combined with suggestions that house price may fall in some places due to Brexit and the political landscape, renting will sound more appealing than ever. For landlords, the initial work may come as a shock, but it should produce a fairly stable investment down the line.
New Build Properties Will Feel Extra Appealing
The demand for housing is growing. When combined with the fact that tenants will seek mid-term stability, they will want safe and comfortable housing.
Many will see the new types of property like co-living micro flats and new builds as the perfect solution, and this extra demand can work wonders for investors, and the entire market as old building are remodelled and new developments funded.
For new investors, help to buy schemes are often geared towards new housing too, which can provide an even greater financial incentive.
While London may be a little less attractive, investors may also find that multi-property investments become far more attractive as only a percentage will need to be occupied to break even. The use of interest-only mortgages for this purpose may soar.
Newer properties are shown to sell more quickly than older ones while owners will also require less repair work once the transition from landlord to seller arrives. So, for the long-term as well as the short-term investment, new builds can become the norm.
Uncertainty Will Create Opportunities
This year is certain to be an exciting one, wherever you reside. Political and economic developments will no doubt take their toll on property prices and costs like maintenance, insurance, rates etc.
Political and Economic Developments
Would you want to predict the outcome of Brexit and how that’s going to change the housing market? It’s anybody’s guess right now.
Some experts forecast economic downturn and widespread losses, while others predict a more positive outcome with real estate prices rising, so it’s really quite impossible to say exactly what’s coming.
Price falls could give investors the perfect chance to expand and diversify their portfolios, particularly as most experts feel that prices will climb in 2020 and beyond irrespective of what happens over the next 12 months.
So in the immediate term we could be looking at anything up to 5% either way. It’s the homeowners whom need to be more aware of price fluctuations especially if their equity in the property is 10% or less.
Reducing debt is always a good focus for homeowners, especially those on fixed incomes and large mortgages.
Uncertainties in other countries, combined with exchange rates, should also bring opportunities in foreign markets. Many investors may be best served by diversifying their portfolios in this manner, at least until the domestic market has settled.
One way or another, those that capitalise on the possibilities in the right manner should see fantastic returns.