Well, the Christmas and New Year’s parties have been and gone for 2017, which can only mean one thing, it’s 2018 and we have to go back to work.
The fireworks are over until next New Year.
I know that 2017 was 365 days just like any other year (leap years excluded), however it did seem to go by faster than I can ever remember previous years going. Maybe I am just getting old!!
Anyway, the work won’t get done pondering over 2017, we have a fresh new year to get stuck into and sell more management rights.
The new year has started right where 2017 left off, with a strong demand for both existing management rights businesses and off the plan new builds.
Stock was at a premium towards the end of last year as people wanted to buy, settle and get in before the new year,
It is very much a seller’s market again, and has been for the last 12 months as very few quality listings hit the market. Of course, with a seller’s market comes an increase in the multiplier as supply and demand dictates values.
Our only problem with a seller’s market and increased multipliers is, that it does take the valuers and subsequently the banks some time to catch up to where the buyers and sellers are.
We can’t see any changes to that seller’s status in the foreseeable future, unless everyone decides to sell their businesses all at the same time and we get a situation where there is too much stock on the market.
The off the plan market has slowed a little as developments across Brisbane and Melbourne are completed and these management rights settle.
New buildings are in the market with units for sale, however they are unlikely to begin construction prior to the last quarter of 2018 or first quarter 2019, as unit sales will drive development funding and commencement dates.
The Brisbane CBD 3klm fringe, incorporating South Brisbane, Woolloongabba, Stones Corner, Fortitude Valley and Teneriffe appear to still be the hottest new development areas.
Several of the national and international developers have sites and projects underway in these suburbs, with the only slow up for now, being unit sales.
Off shore investor unit funding has been a huge issue for developers in these markets, however there are alternate funders out there who have access to non-bank funds at similar interest rates to the banks.
We are more than happy to give an introduction to these funders to any developer or sales manager who may be struggling with this issue.
Melbourne is the undoubtable the national hotspot at present as far as interest in management rights go.
We have personally been down there on the ground selling management rights for the last 10 years and now fully understand the issues that are raised in this market. We are more than happy to meet and discuss Melbourne with anyone who may be interested in looking there.
We have an office in Melbourne with fulltime management rights staff who are instrumental in bringing new developments and off the plan MLR’s to the table.
There is very little by way of resale management rights businesses in Victoria, so the majority of sales are off the plan, which requires experienced operators.
Well, let’s get stuck into it and see where 2018 takes us.
Will it be a lemon or lemonade, only time will tell?
Have a great start to the year and please call us whenever or wherever we can assist.
The RCA team.