Market Insights
Quarter 3, 2017
Welcome to the Q3 Market Insights for 2017 from National Property Buyers, where our local agents provide expert analysis of property markets across the country.
Sections: National Market Overview | Victoria | Queensland | South Australia | New South Wales | Case Studies | Rental Wrap Up
National Market Overview
Early spring housing markets have produced mixed results with Sydney continuing to ease, Melbourne remaining robust, and Adelaide and Brisbane showing steady but slow growth.
The latest figures from CoreLogic take national dwelling values 0.5% higher over the previous quarter, which is the slowest rate of quarter-on-quarter growth since June 2016. Nationally values are up 8.0% over the past twelve months.
Source: Corelogic Hedonic Index
Sydney has experienced its first month-on-month decline after 17 months of consistent capital gain. Our team on the ground have noticed more controlled and lower bid amounts at auctions compared to the frenzy experienced 18 months ago.
Melbourne’s housing market is also showing slower growth conditions, however, growth remains relatively resilient compared with Sydney. The recent data released by the ABS show that Melbourne has experienced the largest capital growth out of all Capital Cities with about 100,000 people a year for the past four years moving to Melbourne to call it their home.
Mr Lawless from Corelogic said, “The stronger housing market conditions in Melbourne are supported by auction clearance rates which have consistently remained above 70%. Additionally, advertised stock levels remain remarkably low and private treaty sales continue to sell rapidly, averaging 30 days on market.”
The Brisbane housing market is showing steady growth but the oversupply of units is dragging the state average down. This is represented by the latest percentage change YOY for Units (-2.61%) and Houses (4.03%). We would suggest investors steer clear of these units/apartments however if you are an owner occupier looking for lifestyle property close to the CBD it could present an opportunity but make sure you negotiate hard.
Adelaide’s property market continued its upward trend in price growth despite its slow population growth and jobs uncertainty. A good sign for investors is rental prices are being pushed higher by market demand this makes the entry price and yield more attractive for interstate purchasers. However many interstate investors are still sitting on the sidelines when it comes to investing in Adelaide but properties purchased in the right location can lead to strong capital growth opportunities. Due to the lack of high-end stock on the market, several local agents are advising their vendors to auction their properties to maximise competition from several bidders.
Statistics that take a macro view of the property market only give a general guide to the fluctuations of price growth. They encompass all types of property; those performing well in terms of capital growth as well as properties that have performed poorly.
It’s vitally important for buyers to be aware that there are markets within markets. If growth on a macro level is easing it does not mean that growth within particular suburbs would also be easing. Quality property in highly sought after areas will always attract strong competition and therefore a better chance of strong capital growth.
So what are some of the factors influencing the market. Population growth and unemployment rates (5.6%) continue to. The Reserve Bank recently held rates at 1.50%, the 13th consecutive hold since the RBA made its last move in August 2016. Though lenders don’t always listen! And in the last quarter several federal and regulatory bodies legislative changes have taken effect and are now beginning to having the intended impact on the market. More information about the legislative changes can be read below:
Government and Regulatory Bodies Changes
- The introduction of restrictions on interest only loans and increased interest rates for investors by APRA (Australian Prudential Regulation Authority) means investors are finding it difficult to source low rate – interest only loans and this is slowing the investor market.
- First Home Buyers (FHB) have seen increased activity in the market due state wide concessions on stamp duty. Each state has implemented different concessions so it worth speaking to a Buyer Advocate or Financial Advisor to find out more.
- In the 2017-18 Budget, the Government announced that it will deny income tax deductions for the decline in value of previously used plant and equipment in residential premises used for residential accommodation effective from 1st July, 2017. Unless a property is new, investors are no longer able to claim this depreciation which will increase the holding cost. The expected result is an increase in investor activity for new property.
- In the 2017-18 Budget, the Government announced that it will deny travel expense claims for investors visiting interstate properties. This will increase the holding cost for interstate buyers if they wish to visit their properties.
- Effective 1st July, 2017 foreign investors will now pay double the surcharge on stamp duty for new purchases and 2% land tax (up from 0.75%), foreign investors will pay as much as $95,490 in stamp duty for a $800,000 purchase.
It will be interesting to see how the next quarter travels, typically Spring is a busy time in real estate and we should see a number of properties coming on the market ensuring auctions can be run before the usually slow Christmas holiday period.
As always, the need to seek expert advice and guidance when making your property purchase is vital.
Market Overview
Melbourne has had another strong quarter and along with Hobart has outperformed all other capital cities. While growth overall has eased in the last quarter, prices are still climbing but at a slower and more steadied pace.
Melbourne’s inner ring property market continues to remain strong with a considerable amount of the competition coming from downsizers who have targeted inner-urban lifestyles and upgraders who are searching for their family home close to the city. Three and four bedroom properties are in short supply in areas and as such, the sales results are exceeding agent and vendor expectations on a regular basis.
Competition for the established apartment market has eased, however we expect it will bounce back in the last quarter with increased demand. This will be due mainly as a result of increased confidence in the FHB category, as legislative changes (in particular waived stamp duty for purchases sub-$600K) take effect.
The introduction of stamp duty concessions for first home buyers has also heated the townhouse and villa segments of the markets in this price range (notably in the middle ring north, west and outer east). As these first home buyers aggressively fight for properties which only a year ago were investor targets, the competitive market conditions have buoyed these dwelling types despite strong downturn in investor numbers.
Lending changes introduced by APRA have reduced the number of investors in the market as they find it difficult to source low rate interest only loans as banks must ensure by September 30th that lending volumes for interest-only loans are kept beneath 30%.
NPB’s clearance rate of 89% continues to be higher than the state average of approximately 75%. The NPB clearance rate is a snapshot of ‘investment grade’ or ‘cream of the crop’ properties representing only those we shortlist and/or recommend to clients.
South Caulfield
Overview
Caulfield South is located 10 km south-east of the CBD. It is a large suburb with a population of approximately 18,000.
Caulfield South is well serviced by infrastructure with Elsternwick or Glen Huntly train stations, trams along Glen Huntly Rd & Hawthorn Rd, parkland and easy access to the city via Nepean Highway.
It is located close to Monash University, Caulfield campus and the Caulfield Racecourse and Plaza. It also less than 6 kms to Chadstone Shopping Centre the southern hemispheres largest shopping centre.
South Caulfield is piggybacking off its closer to the CBD cousins Caulfield and Caulfield North and experiencing steady capital growth. In addition for people that want to be close to the water but are outpriced in suburbs like Elwood and Elsternwick it is a handy alternative with a bit more bang for your buck. It is only around 3-4 km from Elwood beach and 4-5km from Brighton beach.
The majority (54%) of properties are houses, followed by semi-detached terraces (32%) and flats (14%). The median age is 40.
Pricing
The median price of a house is Caulfield South is $1,605,000 and for a unit $777,500. Houses are considerably cheaper than its more expensive neighbours. The average weekly rent is $420.00.
Current Median Pricing 2017
Trend in Growth
Source: REIV
Example Purchase
A great example of a recent purchase is 25 Gardenvale Road. Renovated and very well appointed 4 bedroom, 2 bathroom Californian Bungalow with a pool sits on over 600sqm of land and is perfect for a family with schools and parks closeby in addition to public transport, cafes, shops & restaurants. This property was secured prior to auction at $1,758,000. Click here to view the agent listing.
Glenroy
Overview
Glenroy is 13 km north of Melbourne’s CBD and is a large suburb with a population of approximately 22,000.
Glenroy is well serviced by infrastructure with Glenroy station, numerous parks and easy access to the Western Ring Road to get in and out of the city. There is a major retail district and a developing café scene. It is also home to the exclusive Northern Golf Club & neighbours Oak Park which has a new $27M Aquatic Centre being built.
The majority (63%) of properties are houses, followed by semi-detached terraces (27%) and flats (9%).There has been a shift in demographics with older age groups reducing and the predominant age group becoming 25-34 years and are primarily couples with children.
Back in the 1950’s there were many Housing Commission properties built on large quarter acre blocks which have since been developed into smaller allotments making them more affordable for young families.
There has been a shift in demographics with older age groups reducing and the predominant age group becoming 25-34 years and are primarily couples with children.
Pricing
According to property data from REIV houses in Glenroy have a median price of $793,000 and units $551,000.
Data from realestate.com has the median sales price for houses in Glenroy in the last year at $666,035 based on 317 home sales. Compared to the same period five years ago, the median house sales price for houses increased 57.5% which equates to a compound annual growth rate of 9.5%. With a median rent of $375 that is a 2.9% rental yield.
The median sales price for units in Glenroy, VIC in the last year was $485,000 based on 316 home sales. Compared to the same period five years ago, the median unit sales price for units increased 21.0% which equates to a compound annual growth rate of 3.9%. With a median rent of $355 that is a 3.8% yield.
It is important to remember these medians are at a macro level and apply to ‘good’ and ‘bad’ properties in the suburb. When using a Buyers Advocate service only the cream of the crop are selected for clients (according to budget)
NBP Purchase
2/30 Gladstone Parade is a prime example of a property we purchased for a client in the last quarter. It is a 3 bed, 1 bath modern townhouse that was built in 2009. The townhouse is walking to distance to the station, shops and local schools.
We fought off 3 strong bidders to secure the property for our client at $680,000. Click here to view Agent Listing.
by Antony Bucello
Director and Victorian State Manager
Antony is married with 2 children and lives in Lower Templestowe, Victoria. Educated at Swinburne University, his sales and marketing career has spanned over 30 years in both the Financial Services and Property sectors. Having been involved in countless property purchases for his clients over the years, he is now a leading Melbourne Buyer Advocate.
0418 131 950 or email me
Market Overview
The market continues to roll along in Brisbane.
We are not breaking any glass ceilings but we are showing steady, continued capital growth across all price points from the inner CBD to the outer 30kms suburbs.
Whilst the top end of the market will always set new highs as the demand for luxury housing close to the CBD grows, the lower end of the market in the outer suburbs are also showing that property is as good an investment asset as anything as it is becoming harder and harder to source good properties under the $400k price point.
The Unit market in and around the CBD is still in free fall for most projects due to the oversupply issue and a recent Heron Todd White report has stated that some recent resales were down 30% less than the off the plan sales.
With an expected 15,000+ apartments being added to the already flailing oversupplied market over the next 12 months forecasters are predicting a further sharp decline of between 7-14% in real terms over the next 2-3 years. This would be a smart time for downsizers to watch the second-hand market closely if they are considering purchasing an apartment close to the city with all lifestyle amenities.
Whilst the Jury is still out on Brisbane being an Auction driven market for a successful sale it is clear in all of our suburb searches that a hot market at both ends is resulting in more and more properties being marketed for Auction as opposed to the more traditional method of sale in Queensland – private treaty listed with a price.
What we can see in the back to back quarters is demonstrating a fall in overall “%” of properties cleared at auction in this last QTR with the 1st QTR of the year marginally ahead. Interestingly though a lower “%” of cleared auction properties in this last QTR still produced a higher volume of properties sold.
Monthly Auction Clearance rates
Monthly Auction Sold Houses
Suburbs to watch
So which suburbs can you buy in with confidence that will grow your return?
Given that both the inner ring markets and the outer rings are performing very well year on year it all comes down to affordability and then selecting the best suburbs for your price point.
We believe the inner ring suburbs of Seven Hills & Highgate Hill are going to be the star performers in the coming months with the Northern Outer suburbs of Lawnton & Kallangur in the low-end ranges.
Seven Hills and Highgate Hills
Seven Hills
Seven Hills is located 5 kilometres east of the CBD and has a direct express bus route to the Brisbane CBD. It has four parks in total and the Seven Hills Bushland Reserve is over 50 hectares in size which has great walking tracks for locals.
Further to this, the suburb has a fantastic vibe, great food and dining, quality schools, big blocks and mainly low density residential zoned property. The households in Seven Hills are primarily couples with children and urrently, the median sales price of houses in the area is $815,000 and $442,500 for units.
Highgate Hill
Highgate Hill is located 2 kilometres south of the Brisbane CBD on the Brisbane River and is only a short walk to the West End and Southbank. It has many restaurants to choose from and leafy parks on the river to kick back and relax.
It is also only a short ferry ride to St Lucia and the University of Queensland
The predominant age group in Highgate Hill is 25-34 years as it is extremely popular with young professionals working in the CBD
Currently, the median sales price of houses in the area is $1,194,000 and for units $528,250. Rental yields are 3.1% for houses and 4.5% for units.
Kallungur and Lawnton
Kallangur
Kallangur is a suburb in the Moreton Bay Region, it is approximately 25kms north of Brisbane and is only a five minute drive to the Petrie Train Station which provides an express ride into the city within 30 minutes. It is well serviced by the nearby Westfield North Lakes for shopping and is only a 20 minute drive to the Redcliffe beach or a 40 minute drive to the Sunshine Coast.
The current median price of houses in the area is $379,000 and units are $342,900. Rental yields are 4.9% for houses and 5.6% for units.
Lawnton
Lawnton is it is approximately 25kms north of Brisbane. The size of Lawnton is approximately 9 square kilometres and has 10 parks covering nearly 3% of total area. Households in Lawnton are primarily couples with children and similar to it’s neighbouring suburb Kallangur it makes for an affordable housing option in addition to an easy commute to the city for work.
It also has the added advantage of having its own Aquatic Centre for those that prefer this than to head to the nearby Redcliffe beach.
Currently the median sales price of houses in the area are $384,000 and units $342,900. Rental yields are 4.8% and 6% respectively.
by Stephen McGee
Queensland State Manager
Stephen is married and lives in a bayside suburb of Brisbane. Stephen brings over 15 years of experience in residential property to National Property Buyers QLD, including residential property investment and small-scale developments. Stephen was also voted “Best Buyers Agent in Queensland” by his clients in the Investors Choice Awards of 2015.
0488 501 170 or email me
Market Overview
The Adelaide market has continued to show great signs of steady growth with good quality stock along with great prices being achieved by Vendors.
With auction clearance rates sitting around 68%, many properties are getting sold prior to auction.
We have been seeing an increase in investor activity over the past quarter, with many from interstate seeing good value in potential investments in Adelaide. Most of these buyers sticking to a budget of up to $500,000 which does allow for great options in investment purchases while achieving high rental yields in certain areas around the metropolitan area.
There has been solid FHB activity for new properties or House & Land Packages, making the most of the government incentives on offer. (A $15,000 grand for new builds valued up to $575,000)
We expect to see continued growth and competition in specific areas of high demand and lifestyle properties.
Largs Bay
Overview
Largs Bay is a sensational beachside suburb that has many turn of the century character residences positioned in wide tree-lined streets and offers a great seaside lifestyle for families and professionals.
Located just 30 minutes from the Adelaide CBD and positioned adjacent the major $2billion re-development of the historical Port Adelaide Harbour and close by Techport Australia, the nation’s premier naval industry hub there is a wide range of job opportunities available.
In close proximity to the popular and eclectic Semaphore retail and restaurant precinct with great local beaches right on your doorstep.
Great schools and easy access transport coupled with comparatively affordable beachside homes complete the attractiveness of the emerging coastal suburb.
Households in Largs Bay are primarily families enjoying the great lifestyle on offer.
Pricing
According to Corelogic the median house price is $520,000 and units $307,885. Rent is $385 for a 3 bedroom and $493 for a 4 bedroom and $280 for a unit.
Source: Corelogic
According to realestate.com.au the median sales price for houses in Largs Bay, in the last year was $557,000 based on 21 home sales. Compared to the same period five years ago, the median house sales price for houses increased 11.3% which equates to a compound annual growth rate of 2.2%. With a median rent of $385 that results in a yield of 3.6%. With careful selection of the right property, a higher rental yield can be achieved, making Largs Bay an attractive area for investors.
Purchase Examples
Please refer to the Case Studies for a recent purchase in Largs Bay.
Millswood
Overview
Millswood is a large suburb, situated 3.5 kms to the south of Adelaide’s CBD and immediately adjacent to the south-west of Hyde Park.
Homes located on the Hyde Park side are grand old homes on large blocks. This is absolutely blue chip real estate. More modest homes on smaller blocks can be found across Goodwood Road.
Millswood has access to both the upmarket shopping strip of King William Road at Hyde Park and also the good selection of shops and services along Goodwood Road. There are local primary schools in the region, and also Annesley College (a private school for girls) nearby on Greenhill Road.
Millswood is great for professionals looking for easy access to the city or families seeking urban lifestyles.
Price
The median price of houses in Millswood is $1,100,000. Compared to the same period five years ago, the median price for houses has increased 71.9% which equates to a compound annual growth rate of 11.4%. The median per weekly rent is $480 resulting in a 2.3% yield.
Soure: Realestate.com.au
The median price for a unit is $512,500, therefore is insufficient rental data to calculate a median.
by Katherine Skinner
Buyers Agent and Senior Property Manager
Katherine Skinner began her career in property over a decade ago in Melbourne working in Buyer’s Advocacy and Property Management. Returning to her home town of Adelaide in 2009, Katherine quickly established a reputation as an exceptionally thorough and diligent practitioner, providing outstanding customer service coupled with a calm and positive attitude while working with some of Adelaide’s most highly regarded agencies.
0438 729 631 or email me
Market Overview
The Sydney market is levelling – the high growth previously experienced is slowing down and the heat is no longer in the market, agents are having to work harder to find buyers for the less desirable properties however properties in areas of higher demand are still achieving strong prices. Whilst a correction is not expected the market has slowed since the first half of the year.
Sydney is currently experiencing the lowest Auction Clearance Rates since this time last year. Averaging around 65% to 70% compared to approximately 81% same time last year.
Competition on auction day has slowed and we are seeing a higher number of auction campaign properties selling prior to auction. There has also been an increase in off market sales activity with agents preferring to run property previews with select buyers and in many cases successfully selling properties without having to run a full marketing campaign.
We have seen an increase in investor activity over the last quarter within the $500,000 budget range. There is good buying in Sydney, the Central Coast and Newcastle at this price point but you have to know where to look and investors with this budget are preferring to buy property closer to Sydney and within a shorter distance from their home. The increased activity in this budget range is also being driven by First Home Buyers who are choosing to purchase a property within commutable distance of Sydney or are buying purely for investment (rentvest).
Government and Regulatory Bodies Changes
Federal changes by the government are also having the intended effect on the market:
- The introduction of restrictions on interest only loans and increased interest rates for investors by APRA (Australian Prudential Regulation Authority) means investors are finding it difficult to source low rate – interest only loans and this is slowing the investor market.
- The incentives introduced by the NSW State Government on 1st July, 2017 for First Home Buyers (FHB) has seen increased activity in the market for those with a budget of up to $650,000, buyer competition has strengthened and prices are starting to rise in this segment of the market.
- In the 2017-18 Budget, the Government announced that it will deny income tax deductions for the decline in value of previously used plant and equipment in residential premises effective from 1st July, 2017. Unless a property is new, investors are no longer able to claim this depreciation which will increase the holding cost. The expected result is an increase in investor activity for new property or the consideration to purchase older properties with the ability to upgrade & add depreciation.
Merrysland
Overview
Merrylands is located 25km west of the CBD. It is a large suburb with a population of approximately 29,653.
Merrylands is well serviced by infrastructure with the Merrylands Train Station connected to the Airport, Inner West & South train line as well as the Cumberland train line. It is also serviced by buses that run from Liverpool to Parramatta. Conveniently located next to the M4 residents have easy access to the CBD, Parramatta and the Blue Mountains area.
It is located close to Western Sydney University, Parramatta campus and the Rosehill Racecourse as well as the major shopping hubs of Westfield Parramatta and Stocklands Merrylands.
Merrylands is benefiting from the ripple effect of the rapidly growing areas of Parramatta, Harris Park and Rosehill and is experiencing steady capital growth. In addition, for people that want to be close to the Parramatta CBD but are outpriced here and in surrounding suburbs, Merrylands is a good alternative returning more bang for your buck. It is only around 4km from the Parramatta River and 9km to the Sydney Olympic Park and Rhodes and it’s central Sydney location makes it easy to access the north and south of Sydney via the M7.
The majority (59%) of properties are houses, followed by units (29%) and semi-detached townhouses (12%).
Almost half the population are couples with children with a high proportion of people aged 20-39 years.
Pricing
The median price of a house is Merrylands is $880,000 and for a unit $512,000. Houses are considerably cheaper than its neighbouring suburbs of Parramatta, Harris Park and Rosehill. The average weekly rent for houses is $500 and units $420.\
Current Median Pricing 2017
Trends in Growth for Units
Trends in Growth for Houses
Purchase Example
A good example of an investment opportunity or entry level owner occupier buying is a property at 41B Barcom St, Merrylands West. Brand new duplex within a 4 minute drive and walking distance to Merrylands town centre and train station. The property was originally purchased by a savvy developer in 2016 for $730,000 who built this duplex which was purchased in August 2017 for $845,000. The property appeals to quality tenants and represents a rental return of $700pw which would generate a 4.3% yield. Click here to view the agent listing.
Umina Beach, Central Coast
Overview
Umina Beach is located 87km north of the Sydney CBD. It is a large suburb with a population of approximately 16,000 and is bordered by Ettalong Beach, Blackwall and Woy Woy.
Umina is easily accessed within a 1 hour drive from Sydney on the M1 Freeway and is well serviced by the Woy Woy and Gosford train line, making this lovely beachside suburb an easy commute to Sydney.
It is located on the Central Coast’s beach Peninsula and is an easy 20 minute drive to Gosford. Umina Beach is leveraging off the rapid changes in the Gosford area is currently experiencing steady growth. With the redevelopment of the Gosford Hospital and the ATO and Department of Finance, Services and Innovation relocating to newly built premises in Gosford, this area is set for future growth.
Umina is returning more bang for your buck either as a home owner or investor. With a lower price point for entry and easy access to Sydney, Gosford and the surrounding beach suburbs such as Avoca and Terrigal, this suburb has become popular among Sydney families looking for a sea change and investors looking for higher yields – Granny Flat opportunities abound here.
The majority (80%) of properties are houses, followed by semi-detached townhouses (12%) and units (7%).
Umina Beach has a higher proportion of older people aged between 40-69 years however this is starting to change as young families (38%) move into the area.
Pricing
The median price of a house in Umina Beach is $735,000 and for a unit $605,000. Houses are considerably cheaper than its neighbouring suburbs. The average weekly rent for houses is $428 and units $360.
Current Median Pricing 2017
Trend in Growth for houses
Purchase Example
A prime example of a good return for this homeowner is the recent sale of 49 Brisbane St. This property was converted to dual living for the extended family or provides dual rental income for the savvy investor. This 5-year old house ticks all the boxes for a stylish beachside home and is within walking distance of the beach and town centre.
Sitting on a superb allotment of 658m2 this newly built home with council approved granny flat is a true set and forget property that will return an above average rental yield and provides outstanding opportunity for future growth. The property was purchased for $1,262,500 and was last sold in 2010 for $252,500. Click here to view the agent listing.
by Simone Luxford
State Manager New South Wales
An outstanding analytical approach, dedication and attention to detail, as well as her sound work ethic and desire to achieve a positive outcome for her clients are Simone’s distinctive personal qualities within her field of expertise. With a Bachelor of Business degree, Simone has a background of over 17 years experience as a Senior Research Consultant in corporate marketing and 10 years experience researching the property market.
0429 039 558 or email me
Forever home purchased for repeat clients in Melbourne
Suburb: Coburg Address: 43 Philip St
Property Type: 3 Bedroom House
Purchase Price: $1,010,000
Agent Listing: http://bit.ly/NPBCoburg
Client type and budget: Repeat clients that had previously purchased an investment property in Elwood that is currently being managed by NPB. Clients were first home buyers with a budget of $1m wanting a period home in a specific primary school zone in Coburg, which also had to be walking distance to the train station. They used our full service – search, assess and negotiate.
Property: Stand-alone weatherboard period home with 3 bedrooms or two and a formal lounge. Features include hydronic heating, split-system a/c, ornate ceilings and Baltic pine floors.
Solution: Properties around school zone were assessed for lifestyle, comfort and future growth.
This property was identified as ready to move in with the ability to renovate and grow with the family in the future.
Walking distance to a range of lifestyle attractions including popular primary schools, local parks and public transport options, it’s also close to Sydney Road cafes, restaurants and Coburg’s renowned shopping precinct.
Purchase: The property was purchased in September 2017 PRIOR TO AUCTION to avoid competition driving the price higher.
First home buyers seeks an investment property in Sydney
Suburb: Merrylands
Address: 11/12 Chetwynd Road, Merrylands
Property Type: 2 Bedroom Apartment
Purchase Price: $489,950
Agent Listing: http://bit.ly/NPBMerrylands
Client type and budget: Our client was a first home buyer seeking to buy an investment property in Sydney with a budget of $500,000, she preferred Sydney to the Central Coast and wanted a property that had shown consistent year on year growth of at least 7%. Other purchasing criteria included the property needed to be within walking distance to a train line and shops, cafes and restaurants. Our client had been looking for over 6 months and decided to engage our services to help her secure the ideal investment property. After some preliminary research we focused the search on Harris Park, Rosehill and Merrylands.
Property: Established 2 bedroom apartment in a secure block, recently renovated, north facing top level, bright and airy.
Solution: This property was identified as the perfect investment opportunity with a high yield in a great location. It is within walking distance to local amenities, Stocklands Merrlyands and the train station. Access to the M4 is only a 4 minute drive and the property attracts an approximate yield of 4.4%!
Purchase: Successfully purchased at under median value within 1 day among strong buyer competition.
Interstate buyer seeks coastal investment property near Adelaide
Suburb: Largs Bay Address: 12a Olive Street
Property Type: 3 Bedroom House
Purchase Price: $468,500
Agent Listing: http://bit.ly/NPBLargsBay
Client type and budget: NSW investor wanting to invest in Adelaide property market – up to $480,000 budget
Property: Brand new “turn-key” 3 bedroom, 2 bathroom, 2 living room home.
Client’s brief: A low maintenance house with good rental yield and strong indication of future capital growth.
Solution: Largs Bay was looked at extremely closely due to the beachside location, future developments and job opportunities in the area, access to the CBD and potential growth due while still being very affordable.
12a Olive Street was identified to tick all the clients’ boxes for an investment property, while being brand new will continue to be low maintenance along with good depreciation options. Property was leased after a single open with a great rental yield of 5%.
Purchase: The property was negotiated through Private Sale and was secured for under our client’s budget.
Queensland miner buys future proof apartment in Brisbane
Suburb: West End Address: 36/35 Buchanan Street
Property Type: 1 Bed Apartment
Purchase Price: $375,000
Agent Listing: http://bit.ly/NPBCoburg
Summary
With all of the hype and despair around the unit market in CBD it is not a very good climate for an investor to reap a timely return on their money – however, this also creates an opportunity for the owner occupier who is looking to downsize or relocate into a CBD apartment.
One of our NPB fly in fly out clients is an absolute example of “future proofing” your purchase price.
Client Brief
The client told Steve that he has a very lucrative job in the QLD mines and wants to buy a 1 bedroomed unit in Brisbane CBD that he can pay off asap and then when he comes to live or R & R in Brisbane he can just park his car and walk everywhere. He gave us a budget of $350-$370k.
Steve’s Advice: Steve explained to the client the turmoil that is currently within the CBD unit market can certainly be used to his advantage. The key to minimise NPB`s client exposure to the same factors is to buy well and select the right property. We established that even though the client is after a one bedroom unit it does not have to be in a high rise complex adorned with all of the extras that investors think they like but turn out to be expensive items that more often than not turbo charge the body corporate fees disproportionally.
So we began the search for a reasonably young(8-10 years) one bedroom apartment, no more than 50-60 units in total in complex – low rise preferable and none of the “expensive add-ons” that barely get used. It would then come down to interior size as we always go by the mantra big is best.
Property Acquired
We located a great apartment in the West End of Brisbane – in a very boutique and prestigious complex right on the Brisbane river. Over 56 sqm internally and was one of only three 1-bedroom apartments in the complex with the others being a mix of 2 bedroom and 3 bedroom river frontage prestige apartments.
The seller had bought the property in 2014 for $420,000 – it had been on the market for sale for over 300 days. This was a perfect opportunity for us to grab a bargain.
After a week of negotiating, we secured the property at a purchase price of $375k. This is what I would call a price that was protected by any future variations in the market – Future proof!
The client is over the moon and can`t wait to finish his contract and come down by the riverside.
In the interim, the property will also attract a rental of over $400/week which for the investor translates into over a 5% yield on purchase.
A great outcome.
Our 3 local Property Managers provide an overview of the rental market in their home states.
Melbourne Rental Overview
On average across all our stock, we find it takes 1 to 2 weeks to let a property. We have also noticed that property we manage that was purchased using our Buyer Advocacy service tends to lease faster and for a higher amount.
Tenants are also instigating tenancy renewals more and wishing to stay longer term. This is in part as tenants are seeking out more stability and that there is less rental available on the market. They are finding the ‘grass is greener’ right where they are.
The vacancy rate for properties NPB managed is 0.9%, this is lower than the city average of 1.7%.
Average Weekly Rents for Melbourne
Source: SQM Research
by Ivonne DiPerna
Brisbane Rental Overview
Inner city suburbs are seeing a high vacancy rate with most sitting at the 5% mark, however properties on the Redcliffe peninsula and surrounds are sitting at 2.6%. It appears many renters are trading in the city lifestyle and moving to the outer suburbs due to the increase in public transport upgrades (new train lines) and a lower rental rate. In these areas they can rent a house for the same as a unit closer to the CBD.
Units and townhouses are slower to rent, and owners are having to reset rental rates due to the increase of available properties in some areas.
Our Buyers Advocacy service purchased 3 properties in this area in the last month – all vacant upon settlement. We secured tenants for all 3 within a week achieving a 5% yield for the clients.
Current vacancy rate for properties that NPB manage is 1.4% compared to the Brisbane city vacancy rate of 3.1%. We recently rented 7 properties in one week. Houses are being snapped up after the first home if priced correctly but units and townhouses are taking more time due to the influx in the market.
Source: SQM Research
by Tracey Farrell
Adelaide Rental Overview
The Adelaide rental market is strong in inner suburbs and lifestyle hot spots. Glenelg, Largs Bay and Semaphore all offer coastal lifestyle with an easy run into Adelaide. City hot spots for daily commuters include North Adelaide, Prospect and Norwood.
It is taking on average 2 weeks to lease a property with approximately 3 applications per property which is a great driver for interstate investors to consider Adelaide.
The vacancy rate for properties in Adelaide is 1.6% with an average weekly rent of $376 for a house and $290 for a unit.
Source: SQM Research
by Katherine Skinner