How capital city investors can capitalise on today’s property market

“The very first thing I’d do is be liquid. It’s not just risk mitigation for you, but it’s your opportunity to execute opportunities, so to speak. Investors with the most cash will always do well.”

“I’d also be looking for diversification. So, if I’ve invested in Sydney during the last cycle, then I perhaps consider moving to Brisbane or potentially entertain the idea of investing in some areas of Perth,” Mr Waters highlighted.

At the end of the day, the significant migration and population growth in capital city markets, particularly Sydney, Melbourne and Brisbane, will always be supporting their property markets, thus allowing investors to take advantage of opportunities regardless of the current movements of the market.

What to buy

For investors who are willing to take the leap and start investing once again, Mr Waters recommended concentrating on larger blocks that can be split.

Ultimately, investors are advised to avoid the unit market, which is expected to face oversupply soon.

Adding to his recommendations, Mr Waters said: “Keep close to the CBDs and don’t go regional. I think Canberra has had its time and Tasmania is very much the same.”

“South Australia, I think there’s some opportunities there. Sydney, too, has those gems that you may come across with every now and again.”

Mr Waters also warn investors against being caught up with acquiring multiple properties over a short period of time.

“Don’t get caught up in, ‘This person’s got 100 properties or 30 or six or two’. It’s not about that. It’s about what it represents to you in net equity and net cash flow. Ultimately, what the goal is and how big your portfolio is will dictate where you should go.”

Growth drivers

Apart from South Australia and Sydney, Brisbane also carries opportunities for property investors, according to Mr Waters.

With the right fundamentals, particularly infrastructure and jobs growth, the Queensland capital is poised to provide good value growth to investors this year.

“Brisbane has an abundance of universities, but also looking at what’s in the pipeline, there are significant things lined up there.”

“That’s where investors get it wrong. They look at the now, but they haven’t been to council or talked to the town planners to see what’s in the pipeline in terms of DA approvals and construction. That will have a direct effect on their rentability in two or three years’ time, whether it’s the universities, the train lines, the freeways or the community facilities.”

At the end of the day, investors are advised to focus on long-term strategies in order to ride the waves and thrive through fluctuations in the property market.

“Don’t look for quick wins because that’s pure speculation – you may as well go to the casino.”

“You need something that’s a fundamental, something that’s going to give you ample cash flow. Cash flow management is king because you can have all the cash flow coming in, but if your expenses aren't in check, then you sustain a negative impact on your portfolio.”

“Subscribe to what’s affordable for you now and in the future. Do you plan to start a family? Do you plan to upgrade the home? Just be real about it, I should say,” Mr Waters concluded.

Tune in to Steve Waters’ episode on The Smart Property Investment Show to know more about the strategies that could help investors succeed in today’s property market.

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