VIC home owner grant changes – benefits for investors?

The First Home Owner Grant in Victoria has been increased from $7,000 to $10,000, taking effect from July 1, 2013.

The Victorian Coalition Government announced the changes last week (April 28), in order to stimulate more first home buyer activity in the real estate market.

The increased first home owner grant will only be available for properties that have just been built, and are valued lower than $750,000.

On top of the rise in the grant, the state government will also be bringing forward stamp duty costs of 40 per cent, which will help to reduce the amount that buyers pay for new and established dwellings.

However, the changes to the grant may not be all that positive for first home buyers in the state, as the Real Estate Institute of Victoria chief executive Enzo Raimondo has pointed out in a press release: "The majority of first home buyers – around 70 per cent in the March quarter – prefer to choose established homes."

The new grant changes may instead lead first home buyers to continue renting, as purchasing a home has become more expensive under the new rules.

"Right now, first home buyers benefit from $12,691 in combined government assistance on a $450,000 home, but after July 1 that will drop by $5,103."

As the costs for purchasing a new property will be increasing for first time buyers, it may lead them to consider renting accommodation for the time being instead.

The Melbourne property investment sector might just benefit from the changes to the grant, as people who were planning to purchase a house this year may put their plans on hold for a while longer.

Another benefit from the changes, is the increased rate of construction in the real estate sector. Building may increase after the new rules kick in, as established dwellings are no longer applicable for the grant.

This means more newly constructed property investment stock in the market, which may have a flow-on effect to median house prices in the state.

Posted by Sara Pritchard

Apartment dwellers are commonly young renters

People aged 20-34 have been the most common demographic to occupy apartments over the last ten years, according to a recent report from BIS Shrapnel.

The report, titled 'Emerging Trends in Residential Market Demand', found that living in an apartment or multi-unit dwelling is becoming an increasingly popular choice across all age categories.

As the popularity of this lifestyle rises, the report has predicted it will drive demand over the next decade.

Information from the Real Estate Institute of Victoria has shown that in Melbourne, young renters are most commonly found in inner-suburbs.

The average age of renters for suburbs such as Parkville, Carlton, and Melbourne CBD is under 30 years, as many of the residents in these inner-city dwellings are students.

Other suburbs containing high volumes of young renters are Oakleigh East, Huntingdale, Notting Hill, and Clayton.

There was also a large number of young renters in outer suburbs, which offer residents lower living costs.

This information may be of interest to those considering purchasing Melbourne investment property, as it shows where the areas with the highest occupancy are. This is a vital factor to consider when purchasing investment property, to ensure that properties are kept tenanted and receiving income.

In a prediction for the future, BIS Shrapnel have found two possible scenarios: the young renters will move on to the next stage in their lives and purchase houses; or they may adapt to an inner-city lifestyle and continue to live in apartments.

"This scenario provides an opportunity for developers to meet demand for a different type of multi-unit dwelling to the typical investment stock that is currently being built in established areas to accommodate the younger 20-34 year old renters," stated BIS Shrapnel senior manager Angie Zigomanis.

"Dwellings would need to be designed to be more appropriate to their next life stage of family with young and growing children, offering more space, both indoor and some outdoor, or located adjacent to public outdoor spaces."

Posted by Sara Pritchard

Melbourne property prices growing

Median house and unit prices in Melbourne have increased for the March 2013 quarter, according to the Real Estate Institute of Victoria (REIV).

The median house price in the city has now reached $561,500 in seasonally adjusted terms, which is a notable increase from the previous quarter at $534,000.

Median prices for metropolitan units increased by 1.4 per cent from $449,500 to $456,000.

REIV chief executive officer Enzo Raimondo has attributed this growth to the increased buyer activity seen in December, which has carried on into the early months of the new year.

Growth in population is also a contributor, as well as the current low interest rates which have improved affordability.

Inner and middle city suburbs were the best performers for this quarter, with Balwyn, Brighton, Doncaster, Northcote and Camberwell all reporting improvements and growth.

"The overall improvements in the market are highlighted by changes in the clearance rate which rose from 61 per cent in the March quarter last year to 62 per cent in the December quarter and 69 per cent in this March quarter," said Mr Raimondo.

"Higher sales volumes were recorded with an estimated 6.4 per cent more than the March quarter last year."

The small amount of growth in unit prices is due to the current high volume of apartment stock in inner-city suburbs.

The increase in house prices may have a flow-on effect to increase property values, which is good news for investors who own Melbourne investment property.

Mr Raimondo has also predicted that due to high amounts of supply, prices will remain relatively subdued for the remainder of the year – meaning that this year may be a good opportunity for those looking at investing in real estate.

Posted by Sara Pritchard

Melbourne house prices rising

Victorian house prices have seen a small amount of growth during the month of March, and those who are interested in purchasing Melbourne investment property may want to take note of what this means for future growth trends.

The Real Estate Institute of Victoria's (REIV) April Research Bulletin has shown an increase of 0.9 per cent in the House Price Index (HPI), with a 1.1 per cent increase in the Unit Price Index (UPI).

This is a positive indicator for the property market, and shows that house value may soon see good rates of growth.

In terms of previous house price growth seen over 2012-2013, REIV chief officer Enzo Raimondo stated that the Melbourne HPI saw an increase of 3.2 points in the last six months.

Mr Raimondo stated that the REIV is hopeful for better conditions, such as the increases seen in 2009.

"It is important to note that this recovery is mild when compared to the last cycle when the first six months of consecutive improvement saw an 8.8 point rise from 111.2 to 120 between July and December 2009," commented Mr Raimondo.

However, the latest increase in property prices is still a positive indicator for the real estate market – even if it was only a small one.

"This recovers some of the value lost in prices over the past two years but they still remain below their peak of 144.8 in April 2011," stated Mr Raimondo.

The slow increase in consumer confidence is likely to be a contributor to the mild growth rates seen this month, however Mr Raimondo has stated that as a result the growth period is likely to be steady and last a lot longer.

"As a result it is likely to be more sustainable, which is better for those seeking to buy over the remainder of autumn and into winter," said Mr Raimondo.

Purchasing an investment property now before prices increase means that you can secure yourself a great investment and enjoy the benefits from potential property value growth in the future.

Posted by Sara Pritchard

Big weekend for Victorian auctions

Melbourne investment property is heating up, as reflected by the large number of auctions seen this past weekend (March 23 and 24).

The Real Estate Institute of Victoria stated that there were 1,106 auctions held this past weekend, with a clearance rate of 68 per cent.

The REIV stated in their latest weekly set of property statistics that 753 of the properties were sold, 353 were passed in and a further 223 on vendor bid.

The 68 per cent clearance rate in Victoria is seven points higher than this time last year, and two points higher than what was seen in 2011.

"Auction sales volumes are also higher than in 2011 and 2012. Compared to last year there has been 15 per cent more homes sold," said REIV chief executive Enzo Raimondo in a March 22 statement.

"The Melbourne residential market has turned the corner after two slow years with more active buyers and sellers."

Mr Raimondo said that the increased activity could be attributed to the increase in confidence, and lower interest rates which have helped to improve conditions.

Investors may wish to take note of the recent changes, as opportunities for a lucrative residential prospects may also be present.

The REIV has also been releasing research throughout the year detailing the increases in prices and clearance rates for property sales in 2013, which has also helped to improve property market conditions.

"From a historical perspective the largest weekend on record was on 14 and 15 March 2008 when there were 1,351 auctions and a clearance rate of 67 per cent," Mr Raimondo stated.

REIV research has shown that the median price of a house in Melbourne is currently at $529,000, which has increased by 26 per cent over a five year period. This growth shows positive results for the property industry, and with an increase in buyer confidence these factors will likely serve to help the Melbourne property market thrive.

Posted by Sara Pritchard

City of Melbourne embracing city dwellers

The city of Melbourne is acknowledging the ever-growing number of city residents and workers by opening up new sport courts in Docklands last week (March 6).

Improvement of areas available to city dwellers is good news for those looking at Melbourne property investment, as it shows that the city is embracing its inner-CBD residents and providing them with the kinds of facilities that are typically more common in the suburbs.

The multi-purpose sporting facility will be able to host a number of sports activities – such as netball, futsal, and basketball.

In a press release, Places Victoria chief executive Peter Seamer stated: "The opening of the sports courts demonstrate Places Victoria and the City of Melbourne’s commitment to delivering community infrastructure to support and strengthen Docklands’ community."

Mr Seamer also stated that there are a number of other projects on the way to improve the community for Docklands residents.

Lord mayor Robert Doyle stated: "Community sport is an important part of the fabric of a neighbourhood. The sports courts were a priority for local residents. They are now open and ready for competition and casual matches."

In a press release from July 2012, planning minister Matthew Guy stated that Docklands continues to make a significant contribution to the economy in Victoria.

"The last year alone has seen more than $2.4 billion worth of commercial and residential development under construction across 16 projects, including more than 1,500 dwellings," said Mr Guy.

Areas that are seeing high rates of growth and development, such as Docklands and other suburbs of Melbourne city, possess great potential for property investing. Community facilities, such as sports areas, may make the area more attractive for those looking for city rental accommodation – and the development in the area may also lead to increases in property value over time.

Posted by Sara Pritchard

Investment in the future of Victorian public transport continues

Investing in real estate in Australia is an attractive venture for many reasons.

One of the most evident is that many state governments are demonstrating they are serious about improving public transport infrastructure.

Victorian premier Ted Baillieu and public transport minister Terry Mulder announced Monday (November 26) that the Victorian government would be purchasing 40 new carriages for the V/Line network.

The first of the carriages should be delivered in 2014, with the last expected to arrive in 2016, according to Mr Mulder.

This will be in time to meet increased service levels with the opening of the Regional Rail Link in 2016.

"This is the first new order of regional trains since 2009, during which time demand on key regional lines has grown significantly," said Mr Mulder.

Mr Baillieu also pointed out it was great news for manufacturing in Victoria as it would secure more than 70 jobs at Bombardier.

The Regional Rail Link is a major project designed to relieve congestion in Victoria's rail network.

It will eventually create capacity for an additional 23 metropolitan and 10 regional services during morning and evening peak periods, providing for an extra 54,000 passengers trips a day.

Key infrastructure improvements like this could have very positive consequences for Melbourne property investment.

Posted by Sara Pritchard

Melbourne CBD apartment buildings fast tracked

Victorian planning minister Matthew Guy announced last week (November 12) that he had brought forward approval of two new residential developments in central Melbourne.

The construction will see 800 apartments built in an investment worth $200 million to the Victorian building industry.

Mr Guy said the developments demonstrated that the inner city was a prime location for Melbourne property investment.

"The Melbourne CBD provides immediate access to public transport, to Melbourne's great retail centres and vibrant laneway culture continuing its appeal for a growing residential population," said Mr Guy.

Those considering real estate investment in Australia may be encouraged by the fast tracked approvals as they indicate continuing demand for property in the inner city.

Employment opportunities, public transport infrastructure and access to open spaces continues to drive such demand, and Melbourne is consistently rated as one of the most liveable cities in the world.

The Victorian government announced in September a new reform to the planning scheme amendment process designed to cut red tape and speed up decision making.

Mr Guy says that continuing reform of the planning system will ensure a healthy construction sector, helping development keep pace with population growth and maintaining the confidence shown by private industry in the government.

Posted by Sara Pritchard

Eco-tourism to boost Melbourne economy

Melbourne has a host of property investment opportunities related to the tourism industry.

Increasing numbers of visitors bring an injection of funds to the local community, creating flow-on effects for other businesses and encouraging further development.

The cultural splendours, world-class sporting events and magnificent retail selection are enough to draw visitors from across Australia and all over the world.

However, the natural beauty surrounding the Victorian capital also plays a role in attracting tourists and permanent residents alike. 

There is also a new market that should bring its own share of business – eco-tourism.

Planning minister Matthew Guy announced Wednesday (November 12) that the government rezoned land within the rural hinterland and coastal areas of Corangamite Shire, which would have a hand in creating tourism opportunities and boosting productivity.

"If Victoria is to compete on a global scale, tapping into the lucrative eco-tourism market is essential," Mr Guy said.

"Corangamite Shire is ideally placed to grow its tourism sector and improve access to its world-class natural tourism assets."

Real estate investment may be supported by increased tourism in the region as commercial growth takes place and employment prospects begin to develop.

IT industry continues to grow in Victoria

Those who are considering Melbourne property investment may be encouraged by the news that the city's modern industries are growing at a rapid pace.

It was announced Monday (October 23) that app development company Outware Mobile would bring 23 new jobs to the Victorian capital by 2014, in addition to the various tech companies making Melbourne their new home.

The company is expanding and making its mark in an industry that simply did not exist just four years ago, said state technology minister Gordon Rich-Phillips.

"The growth in mobile app development is extraordinary, and proactive Victorian companies are making the most of it," he stated.

"It's a confidence boost for Victoria's information and communication technology (ICT) industry to know there are an additional 23 high-tech jobs on the way in the app development field."

Real estate investment ventures may be supported by the success of such a progressive industry in Melbourne.

Increased trade between Victoria and the Asian nations of China and India has also proven to support development of the ITC industry, in terms of research capabilities and business agreements.

Posted by Sara Pritchard