Are you wanting to know what direction Casuarina Real Estate is heading?
We are talking about everything property, including what to look for when buying your dream home just in time for Christmas. We are also discussing the current performance in the real estate market after the pandemic-coming back into alignment after two years of the most significant event of our lifetime. How does this impact the future real estate industry, and what do we expect to see?
With Christmas just around the corner, we predict the beautiful coastline of Casuarina to be busier than ever after two years of dealing with the dreaded restrictions of covid-19. Families can have free-flowing travel, interstate or overseas, to spend family time with loved ones this December. Now more than ever, it is a significant time for people to adjust to what has been and move on to everyday living and working conditions. With that in mind, many previously forced to work from home required more space in their residential areas. We saw many buyers upgrading to adapt to their new joint working and living requirements. The lockdowns justified financial expenditures on things such as home extensions, pool upgrades, landscaping, interior renovations and more. This was also heavily enabled by our Government’s job keeper incentives, superannuation releases and business support schemes, done purely to boost the economy during unknown times. The 2021-22 budget committed an additional $41 billion in direct economic aid, which effectively boosted the Australian real estate markets in a way we couldn’t ever have predicted.
As the restrictions here in Australia are almost non-existent, most employees are now required to work ‘in-person’ in their company office. Whilst covid-19 may have brought out some flexibility options for workers; the general consensus is that workflow productivity works best around company peers and in a professional office environment. Many recent buyer’s homes are feeling slightly redundant, with less usage. This comes down to the fact that people are now back to commuting to work, school, university or whatever it may be. Life is back to a free-flowing forum where we are not as tied up in our homes as we have been in the past. With the interest rates rising at a rate that no one can predict, we understand that some homeowners out there are starting to feel the financial strain or anxiety of increasing home mortgages.
Remember that those invested in Northern NSW homes (Casuarina, in particular) have been and are still acquiring phenomenal rental returns- whether from Airbnb or long-term tenancies. With the rise of inflation in 2022, homeowners can still keep their investments ticking along (particularly in locations with low supply and high- demand) with the ability to adjust rental pricing accordingly.
The upside is that the region of Casuarina and its surrounding real estate market cannot keep up with the increasing population. With a housing shortage, home prices remain stable even through a year of multiple real estate setbacks, including a spike in construction costs, the European war affecting supply and logistics, inflation and an interest rate surge with new lending policies. That put aside, investors rely on renters to boost the property investment market. If we didn’t have a large population of people renting their primary residence, the current housing situation would look very different. Most real estate investors will see value in keeping their assets and not being in the market to sell. However, many owner-occupiers are looking to downsize or create dual living arrangements in which the weekly repayments of an over-leveraged mortgage will ease with some lifestyle adjustments.
To make sense of the current real estate market, we have come out of a massive boom that accelerated home prices in a way you would typically see in a trend of one to two property cycles. We saw this develop in just two years, with many people selling and buying homes in a competitive market driven by the distortion of the pandemic. We can thank that “old virus’ as it fast-tracked us to this exact moment- where average home prices in Casuarina have increased by approximately $760,000 compared to the pre-pandemic values. Homeowners who sat and watched the chaos that ensued last year and the year before and didn’t sell are now in a better situation than ever. On average, home values have gone up 25 per cent over the past two years- even if homes came down by a cumulative 10 per cent, they’re still up by 15 per cent over three years. With values still stable, selling and buying in the market of summer 2022 is going to be beneficial with less competitive buyers. This means that purchasing after selling will be easier to navigate, with agents across the industry now understanding the importance of recognising buyer enquiry and what it means for their business. You will receive more communication from agents during this process and have more precise indicators of knowing where you stand in the negotiation process when seeking your next real estate purchase.
Enabling your perspective to shift is pivotal when it comes to deciding on your following property plans. Think about the importance of going from a safety net to a catching net where the financial gains outweigh the comfort of ‘staying put.’ With the new Tweed Valley hospital due for completion next year, the Tweed Coastline is a region with further growth out of the Government’s necessity to house thousands of hospital staff and patient’s families. Investing in Casuarina has further financial development for newcomers to the area to get a slice of the pie. A suburb that depicts lifestyle at its finest, Casuarina is the epitome of what living in a safe coastal suburb looks like. Active buyers with a healthy equity-to-debt ratio will always succeed in any market, as the pressure of weekly mortgages is not exceeding their ability to repay the bank. As we advance, over time, we predict that Airbnb rentals will remain strong in the Casuarina real estate market as an idyllic coastal holiday location. This means excellent returns for house owners with the flexible options to book out their investments for personal use when they see fit. The Casuarina real estate climate is heading for stabilisation, where we will be entering a more normalised and conditioned selling market. This is excellent news for those currently active in the market, especially those looking to sell and buy in Casuarina within a close time frame.
Life after Covid-19 brings a brighter real estate future for the general population, with more options to liquefy and diversify property structures. Savvy investors’ portfolios will be seen through an array of state locations to reverse property investment risk. With our experience from 2019-2022, it is more important than ever to have investments scattered, not just in one area. A lot of multi-million dollar investors are currently in the process of mixing up their assets in a way that serves them in a new real estate environment. Whilst many investors and developers have gone from owning commercial to investing heavily in industrial- we see that the absolute necessity always comes back to the need for a stable residential market. With interstate travel now strengthening directly in our local market, more than ever, we see Casuarina as a strong holiday destination. It has grown and will continue to be attractive for holidaymakers paying a seasonal premium to be here. This also is relative to the calibre of people and families coming into the market by defining who can afford to holiday and live here long term.
After coming into a property cycle much quicker than some may have expected, we think it is imperative to note that our unemployment levels are at an all-time low. Despite rising interest rates, they are most likely going to end up where they were pre-pandemic. The strong performing sector in Casuarina real estate is premium A-grade homes. Casuarina has a high walk score, meaning amenities are generally within a 20-minute radius. People of affluence do not like to travel and will pay for the privilege of living in lifestyle suburbs and locations with a high walk score. This is key because we know that 80% of a property’s performance depends on its location and neighbourhood, leaving Casuarina real estate a clear winner in all categories.
What was fear of missing out (FOMO) has now turned to fear of buying early (FOBE). We see buyers waiting for the property market to hit bottom; however, it is evident that our economy is still growing. Wages are rising, with many borrowers ahead in their mortgage repayments. The scarcity-themed news that the media likes to portray is not quite adding to reality. The world continues to evolve, with new buyers entering the market. In September 2022, buyers and investors were still obtaining finance with $28 billion approved Australia-wide. We will see consumer confidence comeback as buyers get more comfortable and familiar with the market change. Consumer sentiment will be a huge driving factor over the summer of 2022.
