“I think right now and for the next five years property in the major cities will become the hottest investment class you can possibly think of.”
That’s according to Mark Bouris, the founder of Yellow Brick Road (a financial services company that does not market direct property) appearing on Channel Nine’s weekend breakfast news show last Saturday.
Bouris said that he expects the RBA will cut interest rates even further – below 2.5% – meaning that with borrowers will be getting bank mortgage rates at historical lows of between 4% and 4.5%.
“What [these low interest rates do] is reposition house prices upwards,” Bouris says.
“From now until about five years’ time house prices will go up quite a lot and it’s a good time to take the opportunity to invest in real estate.”
The market is continuing it’s strong start to the yaer according to the latest Auction sales results:
• Sydney 78% , 4 week average 73%, compared to 55% this time last year.
• Melbourne 72%, 4 week average 71%, compared to 57% this time last year. Click Here To Read More
We have just posted a major property market update for 2013 on our website. Be sure to check out the full update at Australian Property Market Update May 2013.
This update is largely as a result of a recent presentation that we attended on the Australian property market, presented by Tim Lawless, the research head of RP Data. I managed to take copious notes and have provided a full summary.
The update includes:
Australia’s current economic conditions:
Current interest rates
The effect that these factors are having on:
With lower interest rates and improving rental yields in many markets the typical cash flows on investment properties are improving dramatically.
We have had a number of investors asking us about what the typical cash flows would be on some of our current projects.
Given the drop in rates and rise in rents, for many investors it’s now a cash flow positive scenario.
We have available:
• A generic cash flow for a local investor, who is borrowing the lot – See Positive Cash Flow Below
• A generic cash flow for a non resident investor who is borrowing 70% – See Positive Cash Flow Below Click Here To Read More
Our latest Brisbane off plan investment property is located in the popular Brisbane inner city suburb of Teneriffe, a suburb that is offering huge investment potential.
A few weeks back we mentioned the strength of a high Walk Score as it relates to capital values and rents, from Matusik’s findings, Here’s a direct link to Matusik’s one page summary of his findings: Click Here
According to Matusik, each point of walk score in Brisbane is worth, on average, up to:
• $9,350 in dwelling value (in Brisbane),
• 0.15% lift in capital gain,
• $5 per week in rent
Teneriffe has a walk score of 88, it’s the 7th most walkable neighbourhood in all of Brisbane. Click Here To Read More
We are proud to launch what we believe will be one of the best projects for 2013 – this one is very special.
If you are considering an investment this year, make sure that you check this out, you will not be disappointed.
High Rental Yields – 5.75%+ for most apartments
High Growth Inner City Location – named in BRW’s top 5 suburbs to invest in 2013
Long Settlement – secure your investment now on just 10%, no more to pay until mid 2015
Located in Brisbane’s Inner City Suburb of Teneriffe:
Why We Like Brisbane as an Investment Location! Click Here To Read More
In further evidence that the property market is on the move, the Bureau of Statistics has just announced that:
Home Loan approvals rose a seasonally adjusted 5.2 per cent month-on-month in March.
Economists had expected a rise of around 4%.
The time for an investment property purchase is now, as the market is just beginning to pick up. Bearing in mind also that these figures do not reflect on last weeks interest rate drop by the RBA of one quarter of one percent, down to 2.75%. To date all of the majors, except for Wetspac have passed on the full rate cut to their home loan clients, in fact ANZ have passed on a little more.
With rates now even lower, loan approvals are expected to continue to be strong and we would expect that this increase in market activity will continue to push property prices upwards. With currently low interest rates and very solid rental returns in many locations, investors can in many cases borrow the entire amount for a property purchase (assuming existing equity) with a minimal impact to their out of pocket expenses.
Brisbane in particular is offering very good rental returns, often 5.5%+ in a location that many researchers are suggesting is at the bottom of the current cycle. We currently have high quality apartments in inner city locations, priced from $390,000 with rental assessments from $450 per week (6% return) so when you then take in to account the very low interest rates, you can see why investors are getting in to the market.
Check out our latest off plan investment property to secure a quality apartment in an inner citry growth location.
Great news for those considering an investment property, the latest Home Finance Index, commissioned by the CBA and MFAA , shows that Confidence about the housing market has surged to its highest level in almost three years, with nearly one in two Australians (49.8%) now expecting house prices to rise over the next quarter.
Investors will be rushing to invest, with other findings of the survey pointing to a greater confidence about the housing market including that 83% of those surveyed who own homes believing now is a good time to buy an investment property compared with 78% in September 2012 and 74% in March 2012.
Confidence is the key and looking at some of our economic indicators, it’s easy to see where this confidence is coming from:
Interest rates: The RBA dropped rates to a record low 2.75% last Tuesday and already most banks have followed by passing on the full rate cut to their borrowers. This latest rate cut and the rise in rents in many areas means that for many, it will be cheaper to buy than rent and this will bring more buyers in to the market.
Investors will also be keen to enter the market as net yields will improve due to the cut in rates, along with solid rental returns in many locations. Click Here To Read More
Have you ever wondered just what impact a walk score can have on an investment properties performance? In Brisbane we now know that one point of walk score is worth $9,350 in dwelling value.
We have previously talked about a property’s or suburbs walk score and how a higher score is preferable as it means that residents in that area have more consumer destinations within walking distance and as such it’s a more convenient area. Demand for these areas will generally be high, which in turn puts pressure on rents and property prices.
Walkability scores range from 0 (car definitely required) to 100 (a walkers paradise, where daily errands do not require a car) Click Here To Read More
A quick update to start the week, just to ensure our investors know that the market is currently very upbeat and as such, property is selling fast.
We currently have a number of excellent off plan apartments in Sydney, Melbourne & Brisbane, all with a 2014 or 2015 completion. Some of these apartments we have accessed very early and as such we have an exclusive period of access for our investors. On the others, they are also available now through local agents etc.
If you are one of the many investors that is intending to invest this year or next and you are just “waiting for the right time” please be aware that the time is now and if you wait too long, before you know it the right time will pass you by, as others get in first.
Great news for those considering an investment property, Australian Property Monitors (APM) have just released their latest figures and have suggested that the national housing market has recorded it’s best start to a year since the very strong conditions seen back in 2010. Dr Wilson from APM suggested that:
“Buyer activity is set to increase through the remainder of 2013 driven by growing optimism and record low interest rates that have likely bottomed out,”
Video – APM’s Snr Economist Dr Andrew Wilson presenting the latest data
Melbourne was the standout performer for the March quarter with house price growth of 3.6%. This was above Sydney’s growth over the same period, which saw medium prices grow 1.7%.
Though as APM point out, Sydney’s growth over the past year has been stronger at 4.2%, with Melbourne following closely behind with 3.7%.
Dr Wilson suggests that:
“Sydney has now posted consecutive quarters of record level median house prices to clearly move from the recovery phase that commenced early in 2012 into a solid expansionary phase of cyclical house price growth,” Click Here To Read More