Investing is an excellent strategy to build wealth and financial security, and 2023 is shaping up to deliver plenty of opportunities for savvy investors.

While the way you decide to invest is up to you, here are some of the forecast trends for the next twelve months.

Investor trends for 2023:

Caution around new developments

While there is a shortage of rental homes in Australia right now, investors are being warned to complete thorough due diligence before buying off the plan or committing to a purchase that is still under development.

Labour and material shortages impacted property development timelines in 2022 and this is expected to continue in 2023. While buying off the plan doesn’t have to be off the table by any means, it is important to work with reputable developers and real estate agents who have excellent contacts and a good track record of successful projects.

Buying for yield

The current rental crisis means rental yields are high in many postcodes. Investors with smaller budgets may find they can buy a cheaper home with a decent yield as a stepping stone to a highly productive portfolio.

Buying at the ‘lower end’ of the price spectrum usually means purchasing older homes in regional or less ‘trendy’ areas. Investors are warned to think about whether they are buying in a market which won’t deliver lasting returns.

Looking beyond residential

Some investors will be looking at office and commercial properties in 2023.

One industry where space is at a premium is warehousing. As retailers stock up because of supply chain concerns, storage vacancy is also at a premium so this could provide investment potential.

Meanwhile, the Australian Financial Review is reporting that ‘B and C grade’ office values will fall as businesses offer premium spaces to attract people back to the workplace. This may see the end of cheaper offices, which will be repurposed to create more industrial spaces.

Go Niche

With the market for traditional office spaces falling apart in 2023, investors are steering towards more niche-style investment properties.

Businesses such as child care centres, medical clinics, and pubs are looking inviting to investors who might traditionally have invested in office space. Spaces like these are more affordable for a single investor than a large complex, and because they are considered a higher risk, they have the potential for a decent yield.

Avoid fixer-uppers

Buyers across all sectors are straying away from fixer-uppers thanks to lengthy delays in construction.

If you plan to flip a property or renovate it to charge higher rent, be prepared to play the long game and be patient while you wait for tradespeople and supplies.

Get the right advice

Buying well involves the help of a broker, financial planner/advisor and real estate agent.

Every market has its own trends, perks and forecasts. Investors who choose wisely will understand the long and short-term opportunities of their purchase and will look at elements including:

• Market Demand
• Rental yield
• Local infrastructure and development
• Tenant appeal
• Holding costs
• Managing potential interest rate rise

After a slower and difficult-to-predict year, potentially high rental yields are bringing investors back in force. Work with your local Professionals agent to find the investment property that’s right for you.