The last several years have seen a tremendous change in the global real estate market and with economies reopening after a long hiatus from the global health crisis, it is expected to bounce back.

However, it cannot be denied that the uncertainty loomed over the industry and people are starting to see good opportunities in the new market environment.

Why understand the real estate market?

The answer to this question would matter to anyone who owns a property, whether it be for residential or investment property purposes.

Understanding the real estate market is key to knowing what your options are and how you can make smart decisions when planning to purchase or invest in one.

So, how can you take advantage of the market currently? 

Here are some ideas to consider when leveraging real estate intelligence;

Interest rates

This is a key indicator that can be leveraged by those wanting to make a good deal. 

While interest rates may drive property prices in different ways, interest rates can impact the cost of mortgage and financing rates, such as changes in capital flows that can influence supply and demand in the market.

Another impact is in the derivation of capitalisation or discount rates, which is equal to the risk-free rate and a risk premium.

These factors are critical and can offer good opportunities when you have the available capital on had to invest in real estate.

Cash flow

With the current situation, properties are either positively or neutrally geared.

As mortgaged property investments source their repayments from rental revenues but with yields low due to vacancies or failure of tenants to make payments, cash flow becomes challenging. 

In big cities such as Melbourne or Sydney, where rental yields dropped since the COVID-19 pandemic lockdowns, regional areas and smaller cities benefited from the situation and saw an increase in yields of 5 per cent, which means instant cash flow.

Properties with positive cash flows can be good for investors looking to enhance their portfolio as it can allow them to hang on to their assets as they wait for better capital growth.

Another advantage with low-interest rates is that the situation allows investors to borrow money, provided it is within their bounds of being capable of adhering to their regular repayments.

Distressed properties

Understanding a vendor’s motivation is a good investment opportunity. 

Some sellers are ready or motivated to make a quick sale for several reasons such as an unforeseen circumstance, family or medical emergencies, or to relocate to another site for work or other compelling reasons.

As the government steps in to help out distressed tenants or property owners get their feet back from the economic effects of the pandemic, it opens doors for investors to purchase property that may be lower than its actual market value.

This can provide investors with instant equity and boost revenues, especially when paired with a good cosmetic renovation of the property or small parts in it.

Government incentives

During a crisis, the government never fails to step in and inject stimulus funds to help jumpstart the economy and the pandemic has seen it gravitate largely on real estate.

Stimulus packages being offered range from $10,000 to $25,000, depending on the locality, made available for investors or homeowners looking to renovate or build a new house structure.

These government exemptions and grants are largely available across Australia and provide a windfall for several segments of the industry, which can also be a good way to boost equity.

Take note, though, that there are certain criteria for those who are entitled to avail of these.

If you are following the trends in the real estate market, you may be able to follow the tide and see how you can take advantage of profitable opportunities. 

But for those who feel they need more guidance and strategic advice regarding property investments and the real estate market, don’t hesitate to engage in the services of a real estate agent- you’ll surely find out that it going to be very rewarding and well worth your time, effort, and investment.