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As we approach Christmas, I thought I’d reflect on the year that’s been. There’s little doubt that we’ve seen a shift in the market in 2016, driven mainly by subdued sentiment and sensationalist journalism. This has exposed great opportunities, particularly for first time investors including several Blue Wealth staff. One of the real shifts has been in a developer’s ability to bring a project to market. Here’s why:
What this means it’s becoming increasingly important to identify reputable developers, to ensure that a project is delivered per obligation. What else have we learnt in 2016?
Supply is cyclical
Tightened developer funding has significantly impacted the feasibility of future projects, subsequently restricting supply and instigating over $4.1 billion (12,818 apartments) worth of cancellations and deferments in the last 18 months for both Brisbane and Melbourne. To put it in perspective, the cancellation rate is FIVE times, what it was between 2012 and 2014. Difficulty bringing a project from approval to construction means that we can negotiate great incentives for our clients.
Bubble Babble
With credibility on the line, you’d think that media outlets would withdraw from the perpetual talk of a bursting bubble. For that ‘bubble’ to burst we’d need no less than an economic meltdown, drastically higher interest rates, loss of jobs and an unprecedented evaporation of demand. The probability of one of these is unlikely, let alone all in unison. The fact is, there hasn’t been a property crash in almost 130 years, and yet it wouldn’t be hard to find 130 headlines that warned of an impending crash in the last 6 months alone.
As always, it’s important to maintain perspective. Property performs best when held long term and guided by the research and education provided at Blue Wealth we will make your journey as easy as possible.