Right now, the newspapers, on and offline, are full of stories about the fluctuating real estate market, with every economist, agent and bloke at the pub asserting their predictions as to what will happen in property.
While many of these forecasts rely on historic and present trends, and do provide valuable insights, albeit varied and often contradictory, most in major media are guided by what is occurring in capital cities like Sydney and Melbourne, and generalised to the rest of the country.
But — and this should come as no surprise — many niche markets outside of Sydney and Melbourne operate somewhat distinctly, influenced by global and national conditions and events, but also heavily impacted by local politics, weather conditions, infrastructure and development among other things.
In February, we stepped outside the major cities and put the spotlight on real estate in the regional markets of Orange and Dapto, where both local and national influences are creating unique market conditions.
This month, we head to Tamworth as Professionals Real Estate principal and EAC director, John Oehlers, provides his raw and honest take on the local market.
In a nutshell, I think the Tamworth and New England marketplace will have some challenges over the coming years, but opportunity awaits the patient investor.
The next 24 months will be the most challenging since the GFC. I’m no scaremonger, but I have always preferred to give my honest opinion rather than sugar-coat the market to toe the line of old-school agent thinking.
It’s my opinion history will show the next 24-36 months to be the most challenging time for all business since the GFC. I’m talking business across the nation, not just the property market in my area.
Several factors, including no credit in the system, an upcoming election and, in the area where my business operates, the worst drought on record, all add up to sub-par sales turnover.
The Tamworth and New England region will not see double digit capital value loss like our metro cousins will, but we are already seeing our turnover drop off considerably.
It must be said, however, that Tamworth has one of the most proactive councils in the country and they have maintained a strong ethos on growth and new industry to the area over the last 30 years.
The state government has identified Tamworth as an area they want to grow heavily and considerable funding on large infrastructure projects has been earmarked for our city.
As a general rule, I’m very cautious not to get too political one way or the other, that being said, I have a lot of concern for the economy in general when Labor’s mandate is to tax to generate revenue, on top of uncontrolled spending, rather than stimulate the economy by investing.
The current government will have returned the large national deficit Labour left 12 years ago into surplus this year, they will continue to foster investment by not abolishing negative gearing and changing the capital gains tax laws.
In my area, larger companies have already offloaded staff in an effort to maintain sustainability and if the Labor party creates a man-made event that inadvertently jolts the economy, I genuinely fear for the economy, mum and dad punters and retirees.
If the property market is to continue to drop considerably then astute investors will look to take advantage. The key will be positioning yourself to buy well when the time is right!