As 2024 begins, the changing financial markets we faced in 2023 are still with us, especially as interest rates are likely to remain higher for longer. This situation is proving tricky for investors and developers who are feeling the pinch of mortgage stress.

The pressure isn't just about interest rates either. Since the pandemic, costs for construction, maintenance, land taxes, and insurance have all shot up. Those who have investments in growing sectors like housing or retail might be able to weather the storm, but others are finding the investment terrain increasingly tough, weighed down by regulatory pressures and reduced returns.

Developers are also under pressure. The increased cost of borrowing has sent ripples through the industry, making financing for new projects more expensive. This surge in borrowing costs has compelled developers to revisit their financial projections and project budgets, challenging the feasibility of proposed developments.

Additionally, with mortgages becoming more expensive, potential buyers are hesitating, leading to a decline in demand for new properties. Meanwhile the rise in materials costs means some developers are backing out of big projects, while others are facing delays.

Adding to the sector's challenges are looming regulations and bureaucratic roadblocks. Expected changes in industrial relations and tax could have a significant impact on the building and construction industry.

Without a doubt, 2024 calls for resilience and adaptability. At McGees Property, we're focused on steering our way through these complexities, pinpointing opportunities, and ensuring our clients prosper in this changing landscape.