http://thenewdaily.com.au/money/2014/01/07/taking-property-plunge/#./?&_suid=140203080698805029205680323766
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Thursday 5 June 2014
Tuesday 15 January 2013
Resource-rich Hunter investment property hotspot
Newcastle and the Hunter Valley have been identified among the nation's top regions for property investment, by a panel of industry experts.
http://www.abc.net.au/news/2013-01-16/resource-rich-hunter-investment-property-hotspot/4466720
Monday 3 December 2012
Monday 8 October 2012
Perth and Brisbane heading into property market upswing: Louis Christopher
By Larry Schlesinger
Tuesday, 09 October 2012
Tuesday, 09 October 2012
The
capital cities of Australia’s resource states are leading the property market
recovery, according SQM Research managing director Louis Christopher.
Christopher
places Perth houses and units at 6.30 on the property clock, indicating the
market has just bottomed out and heading into an upswing, and Brisbane houses
and units at six o’clock, indicating the market has bottomed out.
His
assessment of the Perth market is based on falling listings and a tightening
rental market.
Perth
house and unit prices have also stopped falling, says Christopher.
In
its September stock-on-market report, SQM found that Perth online residential
listings declined by 3% to 17,517. Year-on-year they are down 14.6%, the
biggest decline of the mainland capital cities (excluding the much smaller
Darwin market).
SQM
also found that the Perth vacancy rate tightened from an already very low 0.7%
in July to 0.6% in August, with just 1,177 properties available for rent
(compard with more than 2,600 in Adelaide and nearly 12,000 in Melbourne).
Apart from Darwin (0.5%), Perth has the tightest rental market in Australia.
This
tightening vacancy rate resulted in median house rents increasing by $10 to
$450 per week over the August quarter, with weekly rents for units, apartments
and villas rising by $20 to $430 per week, according to the latest REIWA data.
Christopher
says Brisbane has bottomed out due to falling listings volumes and house prices
no longer falling.
According
to SQM Research, Brisbane online residential listings are down 8% year-on-year
to September, with the vacancy rate at a tight 1.5%
Investors
looking to get into the Sydney market at the bottom of its cycle may have
missed out, according to Christopher.
Christopher
has Sydney houses at seven o’clock on the property clock, with units slightly
further ahead at 7.30, indicating houses are well on their way to rebounding.
In
both the case of houses and units listings are falling with SQM recording 2.9%
fall in Sydney listings in September to be down 13.1% year-on-year to 30,408
properties for sale.
In
both house and unit markets he says evidence of a recovery can be seen in
rising Sydney auction clearance rates, which was 63% over the weekend.
However,
Sydney houses are not making a homogenous recovery, with prestige houses stuck
at four o’clock, according to Christopher, indicating they still have some way
to fall.
Sydney
units are slight further ahead of houses in the property cycle due to the
introduction of the $15,000 first-home buyer handout, which applies to new
homes, including apartments, marketed off the plan.
The
Melbourne property market (houses and units) is assessed as having some way to
go before bottoming out – at five o’clock on the property clock.
“Melbourne
listings are still elevated and are not falling," says Christopher.
“There
is some evidence of a rise in clearance rates, but no real evidence of a rise
on prices, he says.
SQM
has Melbourne online residential listings up 3.2% year-on-year to September to
51,564 properties listed for sale.
Adelaide
and Canberra are assessed as flat property markets and at the same point in the
property cycle as Melbourne (five o’clock).
In
the case of Adelaide, Christopher says that “listings are still elevated, yet
they are no longer rising at rapid rate.
“There
is no evidence yet of increased buyer demand and prices are flat.”
In
Canberra, apart from listings remaining high and prices flat, Christopher says
the “outlook is uncertain due to the federal budget”.
Darwin
is assessed as the only capital city market that has already rebounded (at nine
o’clock) and heading towards it its peak.
“There
has been a strong lift in Darwin house and unit prices starting in the first
half of this year.
“Stock
levels are falling rapidly. The rental market very tight,” he says.
Original Article:
Tuesday 3 July 2012
Sydney property squeeze drives Hunter’s boom time
25 Jun, 2012 04:00 AM
HUNTER property prices are set to boom, according to a report that
predicts a 17 per cent increase in the next three years.The study,
by business research agency BIS Shrapnel, predicted the greater
Newcastle housing market would be boosted by the ‘‘inward migration’’ of
people fleeing the Sydney squeeze.It comes less than a month after Residex, a property information firm that collates data on real estate markets throughout Australia, listed 17 Hunter suburbs as among the best for capital growth in NSW.
The author of the latest study, Angie Zigomanis, told the Newcastle Herald a tight rental market, an undersupply of housing and a strong local economy propped up by the resources boom would ensure positive returns for homeowners and investors.
Mr Zigomanis said the market was ready to kick back into life, after a boom in the early part of the 2000s followed by four or five years of modest growth.
‘‘Prices probably overshot the mark [in the early 2000s] and we witnessed a period of catching up,’’ Mr Zigomanis said.
‘‘It may well be that lower interest rates have become a trigger for bringing people back into the market.’’
The Herald reported on Saturday that Hunter-based lenders the Greater Building Society, Hunter United Credit Union and the Newcastle Permanent Building Society had all recorded significant increases to their home loan portfolios in the past year.
Mr Zigomanis said Newcastle was a better place to invest than similar-sized areas such as the Gold Coast, where there was an oversupply of housing.
The report also predicted that Sydneysiders squeezed out of an increasingly unaffordable market would look to Newcastle and Wollongong, where prices were lower.
BIS Shrapnel predicts the median house price in Sydney will be $750,000 by 2015, and the report says new dwelling construction in the city is well below the level required by population growth.
‘‘As the deficiency of dwellings in the Sydney market increases, and affordability deteriorates due to a combination of rising prices and higher interest rates, [Newcastle and Wollongong] are likely to benefit from a higher inward migration of residents from the state capital,’’ the report said.
Original Article: http://www.theherald.com.au/news/local/news/general/sydney-property-squeeze-drives-hunters-boom-time/2601049.aspx
Wednesday 11 April 2012
HOTSPOTS:
A PHENOMENON WITHOUT FOUNDATION
Barely a day goes by without some report unveiling a new investment hotspot, a top ten hotspot list or some other variation of the hotspot phenomenon in an attempt to lure investors in a new direction. Despite this media fascination, the hotspot concept is fundamentally flawed and in some cases can even be dangerous for investors. When we evaluate an investment opportunity to recommend to investors, an area hotspot status does not even scratch the surface of the level of due diligence required. There are a whole range of other factors at play that, if not considered, may not only impact the success of an investment property significantly but can also make an investment in a hotspot suburb a recipe for disaster. Many so-called experts nominate hotspots based purely on past performance, taking into account price growth over a specified period and assuming the trend will continue. Regardless of the motivation of such experts, the simple fact is that location, while important, is not the only factor that influences the success of an investment property. There is no guarantee price growth in the past will be replicated in the future. Similarly, there is no guarantee projected future growth based on a particular circumstance will deliver the anticipated results. Consider the case of Ravensthorpe in Western Australia, a frequent inclusion on hotspot lists several years ago. BHP Billiton opened a $2.2 billion nickel operation in Ravensthorpe, attracting large numbers of investors looking to capitalise on the major uplift in residential demand, only to unexpectedly close the mine eight months later. Ravensthorpe population immediately slumped, prices followed suit and investors were left reeling as rental returns plummeted. This example is typical of the danger associated with investing in single commodity mining towns. It also demonstrates the negligence of an investment strategy based purely on location. What about factors including projected employment in the area, the quality and track record of the developer, the level of current and future infrastructure spending, and the propensity for neighbouring high density development that will directly impact competition for tenants and, eventually, buyers? There are many criteria that must be considered to ensure genuine security for an investment. A decision should never be made based on a postcode alone. There are many examples of good and bad investments within the same suburb, sometimes merely streets apart. One of our former sites, deNode Apartments in Surry Hills, is a prime example. You won't find Surry Hills on many hotspot lists. Indeed, an analysis of price and rental growth in Surry Hills in recent times is unspectacular. However, the deNode development has delivered an annualised return since May 2009 of nearly 29%, outperforming the Surry Hills average by over 20% and dwarfing the performance of most investment hotspots nationally in the process. Aside from its location in the more desirable part of Surry Hills, deNode benefits from a lack of competing development, high rise restrictions in the area, intelligent contemporary design and convenient access to infrastructure and amenities designed to appeal to the emerging tenant demographic of the area. One of the underlying problems with the fascination with hotspots is that the median figures for a given area that the so-called experts refer to when developing their hotspot lists. In doing so, a plethora of other influential factors are effectively ignored.
Article by Aviate Group, Level 4, 50 Stanley Street, East Sydney NSW 2010
Barely a day goes by without some report unveiling a new investment hotspot, a top ten hotspot list or some other variation of the hotspot phenomenon in an attempt to lure investors in a new direction. Despite this media fascination, the hotspot concept is fundamentally flawed and in some cases can even be dangerous for investors. When we evaluate an investment opportunity to recommend to investors, an area hotspot status does not even scratch the surface of the level of due diligence required. There are a whole range of other factors at play that, if not considered, may not only impact the success of an investment property significantly but can also make an investment in a hotspot suburb a recipe for disaster. Many so-called experts nominate hotspots based purely on past performance, taking into account price growth over a specified period and assuming the trend will continue. Regardless of the motivation of such experts, the simple fact is that location, while important, is not the only factor that influences the success of an investment property. There is no guarantee price growth in the past will be replicated in the future. Similarly, there is no guarantee projected future growth based on a particular circumstance will deliver the anticipated results. Consider the case of Ravensthorpe in Western Australia, a frequent inclusion on hotspot lists several years ago. BHP Billiton opened a $2.2 billion nickel operation in Ravensthorpe, attracting large numbers of investors looking to capitalise on the major uplift in residential demand, only to unexpectedly close the mine eight months later. Ravensthorpe population immediately slumped, prices followed suit and investors were left reeling as rental returns plummeted. This example is typical of the danger associated with investing in single commodity mining towns. It also demonstrates the negligence of an investment strategy based purely on location. What about factors including projected employment in the area, the quality and track record of the developer, the level of current and future infrastructure spending, and the propensity for neighbouring high density development that will directly impact competition for tenants and, eventually, buyers? There are many criteria that must be considered to ensure genuine security for an investment. A decision should never be made based on a postcode alone. There are many examples of good and bad investments within the same suburb, sometimes merely streets apart. One of our former sites, deNode Apartments in Surry Hills, is a prime example. You won't find Surry Hills on many hotspot lists. Indeed, an analysis of price and rental growth in Surry Hills in recent times is unspectacular. However, the deNode development has delivered an annualised return since May 2009 of nearly 29%, outperforming the Surry Hills average by over 20% and dwarfing the performance of most investment hotspots nationally in the process. Aside from its location in the more desirable part of Surry Hills, deNode benefits from a lack of competing development, high rise restrictions in the area, intelligent contemporary design and convenient access to infrastructure and amenities designed to appeal to the emerging tenant demographic of the area. One of the underlying problems with the fascination with hotspots is that the median figures for a given area that the so-called experts refer to when developing their hotspot lists. In doing so, a plethora of other influential factors are effectively ignored.
Article by Aviate Group, Level 4, 50 Stanley Street, East Sydney NSW 2010
Thursday 19 January 2012
TOP 10 TIPS FOR BUYING AN INVESTMENT
PROPERTY
It’s
never a wrong time to buy property if you know what to look for and how to find
it.
1.
Leave your emotion at the doorBuying an investment property requires a different mindset to buying a home to live in. Start your property search with a clear head. “Investment property decisions should be made from a logical point of view, not an emotional one.”
2. Location Location Location
Don’t be afraid to look outside your own suburb. Property Sauce at the moment favours regional areas such as the Hunter and Newcastle that offer good amenities for tenants and are close to public transport.
3. Avoid oversupply
When looking at potential investment properties, take into consideration other local factors that could impact on your rental and capital growth. Are there many similar properties close by? Are properties about to come onto the market that could cause a glut and drive the price of your property down? “You want to mitigate against the risk of oversupply.”
4. Buy new
Buying new has the advantage of giving buyers time to research a development and learn more about a potential investment. Check out the developer, architect and builder. In certain States, buying new can offer stamp duty reductions. There is the added tax advantage of depreciation and maintenance should be lower than an older property
5. The right amenities
Retail strips and shopping centres can be attractive amenities if your property is within a comfortable walking distance of up to 700m. The same applies for train stations, hospitals and schools. Being too close to amenities can start to impact negatively on a property as noise and traffic considerations come into play.
6. Give your potential Tenants what they want.
Make sure any investment property will suit your target rental market.
7. Budget
Develop an Investment property buying budget and find out what kind of property is right for you. While it’s important to be clear about your investment objective, be it for capital growth or sustainable yield reasons, it’s also crucial to know where you stand in terms of borrowing capacity and investment readiness.
8.Get a good lender
Investors with a clear idea of their property preference as well as a strong relationship with a mortgage broker or a bank have the best chance of success. Property Sauce can introduce you to the right brokers.
9. Understand supply and demand
Vacancy rates are low and there are no signs of this improving in the short-term, so investors can continue to expect low vacancy rates and increasing rental yields.
10. Take advice from experts
When it comes to property, everyone has an opinion. But it may pay to take advice from experts in the field, the people that have worked in the industry over the long term and have a strong track record, and believe residential property is suited to a long term investment strategy
Give Property Sauce a call on 02 95717650
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