When it comes to investing in property, never selling has tended to be the rule of thumb, with investors leveraging off an existing property to buy their second or third investment property.

This is something investors should bear in mind when considering future financial options.

Let’s look at what’s been happening over the past few weeks.

• Vacancy rates

Yes, like many parts of Australia, figures from REI NSW show the Newcastle/Lake Macquarie area did see vacancy rates increase to nearly 2.5% in May. Due to our screening processes and marketing strategies, we as an agency consistently have lower than average vacancy rates; in April we did experience a bit of a peak with a vacancy rate of 1.5%, but this fell as quickly as it rose, and we’re currently looking at a less than 1% vacancy rate in our managed properties.

• Property prices

While many areas in Australia have experienced a slump in property values of between 5 and 10%, in our area, prices have actually remained relatively steady. Furthermore, with less properties on the market, we haven’t really seen a noticeable difference in sale prices.

With unemployment expected to rise, the end of stimulus packages and a potential second wave of COVID-19, there are predictions of a property drop later in the year, but this remains to be seen. Although some industries have suffered immensely and there are people finding it tight, there are also a lot of people who have been working throughout this pandemic and will continue to do so in the coming months.

• Weekly rental value

While the rental landscape has seen some interesting shifts, with some young renters moving home, and some holiday let properties coming onto the long-term rental market, weekly rental values are generally holding steady.

We did see some renters experience financial difficulties, and under the emergency 60 day stop on evictions for rent arrears, a small proportion of tenants did request a rental reduction to see them through the difficult times.

Furthermore, we always believe good tenants are worth holding on to, and as we helped negotiate mutually beneficial agreements, landlords have also been able to access government payments and take repayment holidays.

So, the question on everyone’s lips is what should they do, if anything, now?

Newcastle is in the enviable position of being a desirable area for those looking for a lifestyle change, is within commuting distance to Sydney and has a university, so we feel the Newcastle rental market will hold its own in the coming months.

Furthermore, with low interest rates, and the stock market not performing, property investment remains a genuine investment opportunity for many.

While the cause of this economic uncertainty is one we have never seen before, realistically, we feel investors should view it in the same way as any other time we’ve experienced economic uncertainties. The market fluctuates naturally, buying and selling costs are still there, so we advise that you consider all options and talk to a financial specialist before making any major financial decision.

We are always happy to share our thoughts, knowledge and 40 plus years of expertise, so please call us on 02 4954 8833, send us an email to: mail@apnewcastle.com.au or call into the office if you want to know more.

Don’t forget to check out our Facebook page for handy tips on selling your property or what to look for when buying a property.