Navigating the Property Market: A Strategic Outlook for 2024

Between the festivities and 'down time' this week we know that many business owners and property investors are thinking about 2024. So we thought it worthwhile to share an article written by Andrew Schwartz, managing director, co-founder and CIO of fund manager Qualitas. 

CapStack has been instrumental in helping clients secure optimal debt solutions for their diverse real estate projects and acquisitions.

[Full article here]

With property investment, timing is everything. The recent peak in the Australian commercial real estate market may have passed, presenting a critical juncture for investors to reassess their portfolios. But there are opportunities for smart, nimble investors at every stage of the property cycle, including this one.

Strategic Selling: 

As the market adjusts, consider selling non-core assets to reduce leverage while liquidity levels are still reasonable. Seize the opportunity to protect equity and avoid becoming a forced seller at the market bottom.

Global Market Dynamics: 

The Australian property market is catching up with a global downswing. Understanding the shifts in cap rates and rental growth is crucial as the market recalibrates.

Cap Rate Recalibration: 

Over the next two years, anticipate Australian cap rates aligning with global trends. The transient nature of capital suggests a profound impact on various real estate asset classes.

Risk Mitigation: 

Acknowledge the state of the market and assess the resilience of your assets' cashflows. For those vulnerable to economic weakening, consider selling non-core assets to achieve debt reduction and weather potential storms.

Equity to Debt Shift: 

In times of falling asset values, explore opportunities to shift from equity to debt. Tactical credit fund managers can provide much-needed credit, leveraging fear prevailing in the market.

Strategic Acquisitions: 

Rather than fearing a market downturn, see it as an opportunity. Consider making at least one significant acquisition to step-change your position, recognising that timing is crucial in every property market cycle.

Take Away: 

Recognise and embrace market shifts. Every cycle triggers a wealth transfer from those who ignore change to those who seize opportunities. Stay informed, adapt your strategy, and position yourself for success in the evolving real estate landscape. 

Step 1: 

Call your trusted CapStack commercial finance mortgage broker for a coffee early in the new year. Let's talk!

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