Investor Outlook Positive
At the start of last year the property market had entered a new growth phase and investors were tentatively predicting growth for 2020. Then Covid-19 hit and confidence in the market went through what can only be described as a rollercoaster ride over several months.
There was economic uncertainty and market commentators were predicting a dire outcome for the property market on the back of job losses and business instability. Many investors sat on their hands, waiting for an indication of where the market would go. Others invested countercyclically and bagged good deals over lockdown. Then whoosh! The market was off again and was soon hitting record sales prices across the country.
The Government’s response to the lockdown was to freeze rents for a period, and when rapidly increasing property prices became national news it reacted by implementing changes to the Residential Tenancies Act. The raft of changes was aimed at improving security of tenure for tenants, but some of the changes were contested strongly by landlords.
Added to these regulatory changes were impending Healthy Homes standards’ compliance dates, which meant that alongside the rent freeze, the cost of providing rental housing increased again. But to allay the pain of the increased expenditure, by the end of 2020 landlords were experiencing excellent capital gains across the country. FOMO pushed the prices up, with many investors becoming active in the market.