Valuation fears quashed despite supply influx
Investors might be uneasy about upcoming supply in some capital city markets, but one real estate director believes the focus of investors should be on another key consideration.
Oversupply is a term that may strike fear into the hearts of property investors with an established portfolio; the notion that a property could be devalued by external forces may give investors a feeling of hopelessness, but according to Kristian Nelson-Marshall, director of Cobden & Hayson Surry Hills, investors should not be worrying about more properties diminishing the growth of their portfolio.
Speaking at a property investment event in Sydney’s Surry Hills, Mr Nelson-Marshall used Waterloo as a prime example of unnecessary investor stress, which has recently seen approximately 800 apartments added to the suburb over the course of three months.
Instead of worrying if a property’s value will be watered down with extra stock, Mr Nelson-Marshall said that investors should be more concerned if their property is quality or not.
“Naturally, the market will gravitate to quality residential accommodation,” the director said.
At the moment, Mr Nelson-Marshall has noticed trends pointing towards newer properties, while older, two-style properties are becoming less popular.
However, the director said that this shift is only temporary and thinks it will swing back to focusing on quality property as a whole.
“They talk about these new builds going up everywhere and there’s oversupply. Well, you have a look around and how many cranes are actually in the sky?” the director asked.
“There’s not, in our market, our inner-city fringe, five kilometre radius… a huge amount.
“If you have a closer look at Waterloo, it’s slowly now swallowed up in development. There’s not much more room to do, to develop in that area. So, I think we’re going to start to see that swing back again in the rental market to strengthen, coming 2019.”
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