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February 15, 2024 by ash 0 Comments

In 2024, building costs, interest rates, migration, and more will affect Coast real estate

A rapid rise in median prices in the region in 2023 led to some shocks, according to Ray White data.

The value of houses increased from $993,070 to $1,085,742, while the value of units increased from $719,817 to $775,197.

Many people were surprised by the rise, according to Ray White chief economist Nerida Conisbee.

“Prices didn’t slow down on the Sunshine Coast,” she said.

“It was surprising because many people predicted that prices would plummet in many beachside locations, especially in the Sunshine Coast.”

A drop in prices during the second half of 2022 prompted that opinion, but the market rebounded in 2023.

“The downturn didn’t last very long,” Ms Conisbee said.

Parrearra, Bokarina and Buddina experienced the largest price increases as buyers jostled to be near the sea, while Mooloolah Valley and Rosemount experienced gains in the hinterland.

Despite rising interest rates, property values in the region have increased for several reasons, according to Ms Conisbee.

As a result of limited housing supply and an influx of people, supply and demand played a major role.

She said there was definitely population pressure.

Despite rising construction costs, many people have been forced into established homes in South-East Queensland.

The situation is probably worse in the south-east, where construction costs have risen more than 35 percent over the past two years.”

A rise in property prices is expected in 2024, according to her.

The growth rate is likely to remain the same,” she said, “it’s quite possible we’ll see a similar trend.”.

This will be a factor if interest rates are cut earlier than expected.

There has been a sticking point in the market: the cost of financing.

“However, if interest rates begin to fall, that will fuel the market.”

Until buyers prefer buying new homes and bear the brunt of building costs, established homes will continue to attract top dollar.

She said, “At some point, the pricing will balance out.”.

In order to keep up with construction costs, which will not decrease, price growth must continue to increase.”

Eventually, more homes will be built as a result.

According to Ms Conisbee, “it is harder to build on the Sunshine Coast” largely because of planning regulations and construction costs, but she expects federal and state governments to encourage more new housing.

Furthermore, she predicted that people would continue to move to the region, which would push prices up.

“South-East Queensland’s population shift appears to be continuing,” she said.

As a result, we are seeing more people settle there than we did in previous cycles, not only from within the state, but also from abroad.

“It’s now seen as a place to live permanently, as opposed to just a place to visit.”

According to her, it is a “buyer’s market”.

A lot of sellers have been sitting on their hands because there is nothing for them to buy. I think one of the things that hopefully happens in 2024 is the number of properties for sale starts to rise.

Slower price rises expected

According to Cameron Kusher, director of economic research at PropTrack, the Sunshine Coast saw “superior price growth” in 2023.

Due to rising interest rates and inflation, he expected local home prices to continue rising in 2024.

He explained that “the slowdown in growth is the result of the delayed impact of interest rate hikes, as well as the weakening labour market.”

It is still expected that prices will rise, but at a slower rate.

There are two factors that will influence home price growth on the Sunshine Coast: migration to the region and subsequent demand for housing, along with the amount of stock on the market.

On the Sunshine Coast, there has been a shortage of stock for sale, which has supported prices.”

The housing supply is a major concern

Tim Lawless, CoreLogic’s head of research, said a limited supply of housing also contributed to rising prices.

Sunshine Coast markets have been characterized by low supply, he said.

During November, CoreLogic tracked 2944 homes on the market, 14.5% lower than the same time last year and 37.5% lower than the 10-year average.

There has been strong selling conditions and upward pressure on prices due to such tight advertised supply levels.

Sunshine Coast housing values have grown faster than most other regional markets, and he expects prices to continue to rise.

“However, the pace of growth won’t be as strong as the pandemic phase, which reached 38.7% annual growth through 2021,” Mr Lawless said.

“Worsening affordability constraints will likely slow the rise in housing values.

In spite of this, interstate migration and low supply are expected to keep housing prices mildly upward.

A key factor in 2024 will be the number of listings, migration, and interest rates.

Vendor activity will be an important trend to watch, he said.

Through November, advertised supply was trending lower as buyer demand outweighed the flow of new listings, but if this trend begins to reverse, buyers may benefit from more choice and less urgency.

The Sunshine Coast has been one of the most popular areas for internal migrants, supporting housing demand.

In addition, interest rates should be watched closely. There is a growing expectation that interest rates will begin to fall by the end of 2024. While any rate cuts are likely to be gradual, lower interest rates are likely to stimulate buyer activity.”

It is expected that housing values will keep slowly climbing to record highs in the future, according to Mr Lawless.

According to him, the housing market is highly cyclical due to factors such as debt costs, credit availability, supply versus demand, and sentiment.

Over the next six months, housing values are likely to reach new record highs on the Sunshine Coast if the growth trend continues.

As housing affordability worsens, prospective buyers will face increasingly high barriers to entry.

According to CoreLogic data, hinterland towns like Glass House Mountains, Diddilibah-Rosemount, and Nambour had experienced the strongest growth in the past year.

There will be more homes built

In December, the state government released a framework for almost 900,000 new homes by 2046.

In South-East Queensland, the plan aims to provide more affordable and well-located homes as the region prepares for an additional 2.2 million people.

In the nation’s fastest-growing region, the release follows months of consultation with communities, local governments, and industry.

There are 5000 hectares to be added to the urban footprint for residential and employment purposes, including at Yandina on the Sunshine Coast.

A real housing supply would be enabled by the plan, according to Premier Miles.

“Queensland is experiencing its golden decade of growth, so we need more homes than ever before,” he said.

As part of the national housing supply challenge, ShapeSEQ will ensure we deliver more homes while preserving the great lifestyle our region has to offer.

“It’s a blueprint for building nearly 900,000 more homes.

We want to make sure the homes are what South-East Queenslanders want, strategically located to meet their needs, reduce costs, and increase affordability.”

As state elections approach next year, Antonia Mercorella, CEO of the Queensland Real Estate Institute, said accommodation would be a hot topic.

Housing is a complex challenge and a highly prevalent issue facing our state, and will undoubtedly weigh heavily on voters’ minds,” she said.

February 13, 2024 by ash 0 Comments

Maitland: The regional city that’s ‘the best place to raise a family’

In equal parts alluring and terrifying, living in the country can be a dream come true for Sydneysiders.

The area has plenty of space, cheaper real estate, a more relaxed lifestyle, and fewer traffic jams.

Meanwhile, city dwellers can be worried about where to find decent coffee, what to do after dark, where to send their children to school, and what will become of their careers. 

Between Newcastle and the Hunter Valley, Maitland combines rural charm with city convenience.

PRDnationwide Hunter Valley managing director Reece Thompson says there are a wide range of properties, from historic homes in Morpeth to prestige homes in Bolwarra Heights, as well as house-and-land packages in new estates and acreages.

You can still buy a freestanding home for less than $500,000.

“It’s an affordable rural lifestyle,” Thompson says.

COVID has seen a real spike in visitors because it offers more bang for your buck than Sydney or Newcastle.”

From Woodberry in the east to Lochinvar in the west, the Maitland local government area covers almost 400 square kilometres.

Trade and transport were important along the Hunter River in the early 1800s.

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After the railway arrived from Newcastle in the 1850s, river traffic declined.

There are still outstanding transport connections in Maitland.

It takes about three hours to get to Central by express train.

Sydney’s CBD can be reached in less than two hours by car.

You can reach Newcastle CBD and beaches within half an hour of Newcastle Airport.

It takes about half an hour to reach the vineyards and tourist attractions of the Hunter Valley.

You can find everything from quaint cafes overlooking the river at Morpeth and The Levee in central Maitland to the Stockland Green Hills mall at East Maitland. 

Early next year, a new hospital will open.

Among the region’s biggest employers are agriculture, mining, tourism, manufacturing, and construction.

Public and Catholic schools, as well as Hunter Valley Grammar School, are available for families with school-aged children.

Thompson says, “I’ve been here a long time.”.

“It’s the perfect place to raise a family, away from the hustle and bustle.”

In 2016, Tim Skinner opened The Bikesmith & Espresso Bar, combining his passions for coffee and cycling.

It combines an espresso bar with a bike shop and workshop.

Skinner compares the bike shop to an old-school motor garage.

“We ship bikes all across the country.”

As someone who used to work for a mining company, Skinner says moving to Maitland CBD led him to discover the city’s rich cultural offerings.

The town has so many interesting things going on, such as an amazing poetry scene, repertory theatre, and small-scale farmers’ markets. Everyone is driven by a high level of passion for what they do.”

February 6, 2024 by ash 0 Comments

The RBA leaves the official interest rate on hold, fueling hopes of a easing in mortgage repayment pain

As inflation eases, the Reserve Bank leaves its cash rate at 4.35% at its first board meeting of 2024

For the second meeting in a row, the Reserve Bank left its interest rate unchanged, giving Australian borrowers hope that repayment woes may be over.

On Tuesday, the board left its cash rate at 4.35% at its first meeting of 2024. All 29 economists surveyed by Reuters expected the decision.

Despite recent data showing easing inflation, the Reserve Bank of Australia said inflation remains high.

“The board expects inflation to remain in the target range for some time yet,” the statement said. A further increase in interest rates cannot be ruled out as the best path for inflation to return to target in a reasonable timeframe depends on the data and the evolving assessment of risks.”

A rate cut is unlikely based on today’s statements, according to Tapas Strickland, NAB’s Head of Market Economics.

Based on the Reserve Bank’s forecast, Strickland interprets the likelihood of a cut in H1 2024 as low, but a cut in H2 2024 is consistent with inflation reaching target by mid-2026.

After the first review of the RBA in a generation, the Albanese government ushered in a series of changes that included the first two-day gathering. In addition, the number of meetings will be reduced from 11 to eight per year.

Between May 2022 – just prior to the federal election – and last November, the RBA raised its interest rate 13 times, or 425 basis points. Those increases, the most in three decades, have pushed up mortgage repayment costs by almost $1,500 a month.

The weak retail spending at the end of 2023 has fueled hopes that the central bank will cut rates soon. As a result, inflation fell to a two-year low in the December quarter, more than expected by the RBA and market economists.

Economists at the major banks were not forecasting a lending rate reduction until well into the second half of 2024 before today’s announcement.

Warwick McKibbin, a former RBA board member and now director of the ANU Centre for Applied Macroeconomic Analysis, said before today’s decision that interest rates probably wouldn’t fall soon, and may even need to increase further.

Inflationary risk outweighs disinflationary risk, he said. “Inflation is not under control yet.”

Costs may remain high in the economy because of recent wage deals including those on the waterfront, which increased salaries by almost a quarter over four years. An energy price shock could still result from the escalation of tensions in the Middle East, McKibbin said.

In addition to the revised tax cuts, rising commodities would also provide a “demand impulse” to the economy.

After the statement, the Australian dollar rose by about 0.2 US cents to 65.1 US cents.

Inflation remains “too high” and the economy’s demand for goods and services continues to exceed its capacity to supply them, the bank said in its updated monetary policy statement released on Tuesday. While GDP growth has slowed, it is helping to lessen the imbalance.

The domestic outlook is “broadly balanced”. Market expectations are that the cash rate will remain around its current level of 4.35% until mid-2023 before declining to around 3.25% by mid-2026, according to its forecasts.

Although it trimmed its forecast for near-term price changes, the RBA barely changed its forecasts for when inflation will return to its preferred 2-3% target range.

The Federal Reserve predicts consumer price inflation and its trimmed mean measure – which strips out more volatile movements – to ease to 2.8% by the end of 2025. According to its November forecast, those rates would be at 2.9% by that time. The range midpoint would be approached by mid-2026.

“Recent high inflation is consistent with excess demand in the economy and strong domestic cost pressures,” the statement said. “Services inflation remains high despite having passed its peak, while goods inflation has recorded substantial declines.”

However inflation should continue to retreat in the first half of 2024. The RBA now expects the consumer price index to come in at 3.3% and the trimmed mean gauge at 3.6% by this June, compared with 3.9% forecast three months ago for both measures.

The sharper forecast slide in the CPI this year means wages will be firmly positive in real terms by mid-2024. The wage price index will have ended 2023 at 4.1% – in line with inflation – and remain at that level by June.

When bonuses are added in, “real employment income had increased over the past year across all quintiles” of the economy.

Wage growth alone will continue to outpace CPI to at least June 2026, clawing back some of the shortfall in the past two years when inflation outpaced salary growth.

The higher wages, though, are coming with little additional output. “Recent weak productivity outcomes have contributed to very strong growth in unit labour costs, placing upward pressure on inflation,” the RBA said.

Overall, the risks to the domestic outlook are “broadly balanced”, implying the RBA is comfortable with current rate settings. International risks, however, are “tilted to the downside”, particularly if inflation rates don’t retreat as quickly as now expected.

In Australia, rents are among the propellants for inflation and the pace of increases is expected to remain high because of ongoing tightness in the market. Housing prices, meanwhile, increased strongly over 2023 and are now back above the previous peak in April 2022.

While households are saving less than pre-Covid levels, spending is supported by savings socked away during the pandemic. “This suggests there is scope for savings rates to decline further to support consumption,” the report said.

The jobless rate should be marginally higher by June this year, at 4.2%, and then edge higher to 4.4% a year later and remain around that level out to June 2026. The previous peak unemployment rate was 4.3%.

Australia should continue to avoid an economic contraction but the slowdown will be greater than forecast three months ago as consumer spending has lately dimmed more than tipped.

By June, annual GDP growth will ease to just 1.3% compared with a previous predicted 1.8% pace. By year’s end, GDP will be expanding at a 1.8% clip, or slightly less than the November expectation of 2%.

Households and businesses have seen a jump in debt-servicing costs as interest rates have risen, the RBA’s statement noted. However, competition among banks, lags in people coming off fixed-rate loans, and refinancing, meant that the actual increase was 105 basis points less than the 425bp rise in the cash rate since May 2022.

For businesses, borrowing costs have risen about 390bp, or 35bp less than the RBA’s hikes.

Depositors, too, have missed out on some of the rate rises. The average rate paid by banks was also 105bp shy of the RBA’s increases. The RBA noted the competition watchdog, the ACCC, had found in its inquiry concluded in December 2023 “there had been limited pricing competition between banks”.

Australia’s commodity prices continue to be supported by overseas demand, including in China even as that nation’s property sector continues to wilt. The December quarter terms of trade – which compare export to import prices – are expected to have increased as LNG prices rose and the cost of imports retreated.

For the forecasts, crude oil prices were assumed to be broadly unchanged, or 4% below the level expected in the November statement, despite the ongoing tensions in the Middle East.

February 1, 2024 by ash 0 Comments

In 2024, experts will be watching these up-and-coming areas

These three locations could offer smart investors both short-term yields and long-term growth.

DPN, an investment provider and finance broker, has revealed their top three picks for investors seeking a sound, growth-oriented asset in the new year.

With rumours that the Reserve Bank of Australia will continue to hike interest rates and an ongoing shortage of homes, DPN stressed that investors must focus on properties that offer both short-term and long-term yields.

Their latest report found that “there are a number of areas across the country currently offering strong investment opportunities, despite the cash rate being at its highest level in 12 years”.

Here are DPN’s top three locations to invest in 2024.

1. Wanneroo, Western Australia

For interstate investors looking for a bargain, the City of Wanneroo in Perth could be an excellent option.

Perth’s median house price is currently $584,000 versus $1.25 million in Sydney. Alex Reithmeier, DPN’s research executive, revealed that “Perth’s affordability from the perspective of an interstate investor is a standout, with its median price now below 50 per cent of Sydney”.

“You’d have to go back to 2007 to see those prices in the harbour city,” Mr Reithmeier observed.

Wanneroo, in particular, has seen 11.7 per cent capital growth over the last three years and 4.5 per cent annual rental yield over the last five years, fuelled in part by new infrastructure.

“A number of major transport infrastructure projects for the region have recently been completed including the Northwest Freeway Extension and the Yanchep Rail Extension which has improved accessibility and will provide further future growth for the region,” said Mr Reithmeier.

He also noted that suburbs like Eglinton in the Wanneroo LGA offer a combination of coastal living and urban convenience that is appealing to families.

2. Maitland, NSW

One of the gems of NSW is Maitland, a regional hub located within reach of both Newcastle and the Upper Hunter’s coal mines.

DPM reported that the median home price for the City of Maitland is now $694,000, with the area seeing 8.5 per cent capital growth since 2020 and 3.8 per cent annual rental yields over the past five years.

“Substantial infrastructure investments across the region, along with a robust and growing economy, are fuelling strong population growth in Maitland,” stated Mr Reithmeier.

These infrastructure investments include the $835 million Maitland Hospital and John Hunter Health and Innovation Precinct, $700 million Singleton Bypass, $450 million Newcastle Inner City Bypass and $240 million Newcastle Airport expansion.

“Benefitting from its proximity to Sydney, young families and first home buyers are moving up to make house ownership a reality,” said Mr Reithmeier.

3. Logan, Queensland

According to Mr Reithmeier, Brisbane has two major elements in its favour.

“On the face of it, Brisbane is the story of the Olympic infrastructure boom but an undercurrent of persistent interstate migration from the southern states in search of improved affordability is fuelling demands for regions such as Logan,” said the research executive.

Over the last three years, Logan witnessed a massive 15 per cent capital growth per annum, and 3.1 per cent rental yields per annum in the last five years.

“The City of Logan has a good affordability price point compared to other Brisbane metro areas, which makes property investing economical,” Mr Reithmeier said.

He also noted that its convenient location between Brisbane, the Gold Coast and Ipswich make it well-positioned for both employment and lifestyle.

January 30, 2024 by ash 0 Comments

Key factors regarding home prices in 2024

Here are the key factors facing the Australian real estate market right now, as outlined by industry experts.

After a whirlwind year of rate hikes, cost of living pressures and rental strife, economists and real estate experts are watching the Australian property market carefully to see what happens next.

Here are some of the big issues facing the property market in 2024.

INTEREST RATES

After almost two years of RBA hikes, REIA president Leanne Pilkington said economists are divided about whether interest rates will begin to fall.

Several people believe interest rates have peaked and will begin to decline in the second half of this year, Ms Pilkington said.

According to PropTrack economist Anne Flaherty, stabilized or falling interest rates in 2024 could help restore buyer confidence following two years of uncertainty, leading to further price growth.

She said the rapid increase in interest rates caused a big drop in sentiment.

There was a lot of uncertainty about how much people would have to repay.”

However, international conflicts could push inflation, and therefore interest rates, back up again, said REBAA president Melinda Jennison of Streamline Property Buyers.

Consumer confidence can also be affected by it, she said.

IMMIGRATION

Since the federal government announced plans to halve immigration by 2025, population growth is expected to be slower than in 2023, Ms Flaherty said.

Although fewer migrants are expected to enter the country this year, population growth is expected to put pressure on the property market – particularly the rental market in our major capital cities.

RENTAL CRISIS

According to Pilkington, more investors exited the market last year and could continue doing so following the spate of interest rate hikes, contributing to the shortage of rental properties.

According to her, there are simply not enough rental properties to go around.

According to Flaherty, with vacancy rates near record lows across the country, rents are likely to continue rising in 2024, but at a more moderate pace than last year’s 11.5%.

HOME BUILDING INITIATIVES

It is true that home building incentives are in place, but the supply pipeline is very slow and is unlikely to make a significant dent in the supply shortage this year, Ms Jennison said.

According to her, the number of building approvals in the last 12 months has dropped in both detached and attached dwellings.

Besides the reversal of the surge in dwelling approvals caused by the Homebuilder incentive during Covid, there has also been a slowdown in new construction. Apartment developments have stalled due to skyrocketing construction costs, reducing the supply of new homes at lower price points.

IN 2024, THE KEY DRIVERS OF THE MARKET

*Interest rates – falling or stable rates in 2024 could increase consumer confidence and demand

* Cost of living – rising inflation through 2024 has reduced take home pay for many Australians while mortgage repayments have increased, affecting their borrowing power and ability to buy homes.

* Investors – High costs of living and interest rates have prompted many investors to sell their properties, reducing rental stock but increasing sales listings.

* Immigration – a decline in immigration could mean less demand for rentals, while experts predict that population growth will be strong enough to push rents up at a time when vacancy rates are near record lows.

* Building approvals – a slowdown in approvals and construction starts will exacerbate a chronic shortage of supply, potentially driving up prices

* Supply and demand – Perth, Brisbane and Adelaide, which have strong demand and relatively few listings, will continue to see price growth this year, while Sydney, Melbourne, Hobart and Canberra, which have more listings and fewer buyers, will see less price growth.

January 23, 2024 by ash 0 Comments

The fastest growing regional area in NSW is Maitland

Another year, Maitland has been named the fastest-growing regional area in NSW for 2022/23.

Maitland City Council granted over 1,180 development applications (DAs) during the financial year, which resulted in 1,147 new housing lots.

It took an average of 27 days for DAs to be approved – one of the fastest in NSW.

More than 880 land plots were also released as a result of more than $85 million in subdivision work by developers.

The project currently includes 800 lots under construction, 1,100 lots being prepared for construction, and 2,500 lots seeking DA approval.

Jeff Smith, general manager of Maitland City Council, says these figures and the pipeline of future projects demonstrate the city’s confidence in its economic future.

We continue to grow at the fastest rate in the state, which indicates that investors and homeowners recognize Maitland’s potential as a great place to live.

With great development outcomes, we strive to maintain the balance between progress and preserving the character of our city.

Through our Capital Works Program, we invest significantly in local infrastructure to support forecasted growth.”

The Maitland 2023/24 Works Program includes $19.7 million for major roadworks, $9 million for road rehabilitation and resurfacing, and $11.4 million and $29 million for building and recreation projects.

There are several major infrastructure projects in the pipeline for the community, including:

  • $26 million Raymond Terrace Road project to reduce traffic congestion.
  • Completion of upgrades to Harold Gregson Park at Maitland Regional Sports Complex.
  • Road and intersection upgrades throughout the Thornton road network.
  • New community centres in Tenambit and Chisholm.
  • New sports grounds in Chisholm and Lochinvar.
  • New skatepark and place space at Roy Jordan Oval in Gillieston Heights.

January 18, 2024 by ash 0 Comments

Buy here now: Where you could double your money by 2031

The top spots for ‘mum and dad’ property investors in Queensland have been revealed, with the potential for buyers to double their money by 2031 if they act now.

A property investment expert has identified 11 suburbs where he predicts land prices will double by the time Brisbane hosts the Olympic Games, with Ripley, Burpengary East, and Coomera among the locations set to boom.

The median land prices in the selected suburbs range from an affordable $275,000 to $520,000, with the potential to generate rental returns of more than four per cent per year.

Custodian managing director James Fitzgerald said it was “impossible” for home prices to not continue to grow in these suburbs, which were also still cheap enough for the average buyer to invest in.

“It’s a mistake to think house prices will go down,” Mr Fitzgerald said. “I can’t see a version of the future where house prices are cheaper than they are today.”

Mr Fitzgerald said many people wrongly thought property investors were rich and that the average person could not afford to invest in property.

But he said that, in reality, only 10 per cent of Australians owned one or more investment properties and of that number, nine per cent owned just one or two properties.

“You don’t have to be rich to invest in property,” he said. “You just need to have your finances organised and do your research.

“There are still plenty of locations where ‘mum and dad’ investors can buy something within their budget, which will deliver solid returns.

“I know there was a lot of demand in southeast Queensland during Covid, which drove prices up a bit, but there are still plenty of affordable options, particularly north of Brisbane and to the west of the CBD.”

Ripley, in Queensland’s fast-growing western growth corridor, is Mr Fitzgerald’s top pick.

“Its population is tipped to grow substantially in the next decade and there is plenty of infrastructure being built there,” he said.

“It is a State Government Priority Development Area, with the state government announcing in August it would commit $21 million to help unlock more land in the area, by providing money for road infrastructure.”

Burpengary East is also an area which has been identified for future development.

“It already has good public transport and is close to the University of the Sunshine Coast Campus at Petrie which expects to have 10,000 students by 2023,” Mr Fitzgerald said.

“Both Ripley and Burpengary East, have affordable median house prices and are offer good rental returns for investors.”

On the Gold Coast, Mr Fitzgerald said Coomera was the only area where there was available land left and room for population growth, and therefore, infrastructure growth.

Mr Fitzgerald said the key to choosing the right location for investment was to find areas with growing populations, employment, and infrastructure.

“Those are the usually going to be locations which are close to big employers, so something close to hospitals, universities, industry areas, that type of thing,” he said.

“Our view is that the top 10 projected population growth areas are the best investment

opportunities in each city.”

Ray White AKG principal Avi Khan, whose area covers two of the suburbs on the list — Flagstone and Logan Reserve — said he had noticed many ‘mum and dad’ investors switching their focus to renovation projects after being priced out of the market by larger builders and developers.

“Australia’s love affair with renovations is on full show in our suburbs,” Mr Khan said.

“When we market homes such as the one at 19 Billabong Drive, Crestmead, demand and inquiry is on average about 60 per cent higher than a standard home we market.”

The dilapidated house at 19 Billabong Drive attracted a record 161 registered bidders when it recently sold at auction for $494,700 to Sydney-based investor, Suliman Karim.

Property Investment Professionals of Australia (PIPA) chair Nicola McDougall said investor purchases had fallen significantly over the past 18 months, while many thousands of investors were also selling off their assets.

According to the latest ABS Lending Indicators, the number of new investor loan

commitments have fallen more than 27 per cent since interest rates started rising in May last year.

“It’s clear that the normal flow of investment activity — both inbound and outbound —

has been off-kilter for some time, so, until that changes, vacancy rates will remain at

record lows and rents will climb ever higher,” Ms McDougall said.

“While governments talk about offering incentives to the big end of town for such

supply strategies as build-to-rent, not a red cent has been offered to private investors

who supply more than four in every five rental properties in this nation.”

Ms McDougall said property prices in most locations had posted solid growth over

the past two quarters given stronger market metrics.

“Of course, the low supply of listings was part of the reason why, as well as strong

rental market conditions and record overseas migration,” she said.

Inspire Realty CEO Colin Lee said Brisbane’s record low rental vacancy was helping to steer people away from renting and into home ownership — putting more pressure on the housing market.

“As we approach 2024, buyers should prepare for intense competition and swift

decision-making, as sought-after properties are once again selling rapidly.” Mr Lee said.

“For buyers, this may be an opportune time to buy and invest in property and secure

something before the end of the year and the surge in 2024.”

January 16, 2024 by ash 0 Comments

Dual occupancy properties: reasons to invest

Financial goals can be impacted greatly by the choice of investments you make for the future.

Investing in the housing market is a proven method, but how do you determine which type of property is right for you – now and in the future?

Building from scratch or buying a ready-built property, investors across Australia are embracing dual occupancy properties.

In dual occupancy, there are two dwellings on the same property.

These can be attached or detached, and there are three main types. Most granny flats are the size of a studio and have one or two bedrooms.

Duplexes consist of two properties that share walls – units are a good example of this.

An example of a dual key property would be a two-level home with an entry on the lower level.

Why are dual occupancy homes attracting investors’ attention? Would it be a good idea for you to join the revolution?

Dual occupancy has many benefits

When investing in property, you want to make sure you’re getting a good return on your money.

In general, dual occupancy properties generate a higher return since you can have two separate tenants paying separate rents.

You can charge a higher price for either occupancy if the property is in good condition.

To help pay the mortgage, you can live in one section and rent out the other.

Investors have plenty of flexibility with dual occupancy properties. Renting both properties, living in one and renting out the other, or selling one and keeping the other are all options.

The profits from all options are high. There is also a low investment risk since you have two properties that you can lease out.

If you want to make the most out of your land, you don’t need to subdivide it, which means there are no holding fees or excess council taxes, and insurance rates are lower.

Double occupancy in a building

By developing dual occupancy living on a large block of land, you’re opening the door to a range of exciting future options.

Despite the fact that the build will cost more from the start, the returns are well worth it.

As a result of having more than one income, you will receive a higher-than-average yield, be able to pay off your mortgage faster, increase your portfolio, and improve your cash flow in general.

A second dwelling could be used as an Airbnb, you could have plenty of space if your parents need assistance in the future (or if you do), and you could even take advantage of some tax deductions.

It is not just about having two houses on the same block that is considered dual occupancy.

To learn more about your options, speak with the experts about three, four, or even more.

Dual occupancy properties are a great way to invest in your future.

Although we’ve attempted to be as helpful as possible, this page should not be construed as professional financial advice. Before making any financial decisions, you should seek independent, professional advice.

January 12, 2024 by ash 0 Comments

Here are some suburbs to watch out for in 2024 in Brisbane

Despite a strong year in 2023, Brisbane’s property market isn’t slowing down, and these suburbs could see major growth next year.

According to CoreLogic, Brisbane’s median dwelling price went up 11.9% from 1 December to 1 December. On average, houses were going for $870,000, now only about 7.5% below Melbourne.

Key points

  • Brisbane’s prestige suburbs are expected to keep growing, where the charm and lifestyle create a demand that never goes away.
  • The fast-growing Moreton Bay LGA might be a good place to look for a bargain.

Brisbane’s market hasn’t slowed down yet like Australia’s second largest city. Before too long, buying a house in Melbourne will be cheaper than in Brisbane if the current growth rate continues.

One analyst says prices in Brisbane will keep going up in 2024 is Louis Christopher of SQM Research

“Brisbane prices are expected to rise [in 2024]…driven by a recovering Chinese economy with strong demand for base commodities like iron ore,” he says.

Whether it’s mining jobs, the 2032 Olympics or our beaches, Brisbane’s population is set to grow for a long time.

Within a decade, 350,000 people will emigrate to Brisbane, both internally and from abroad, according to consulting firm RSM. Brisbane needs more housing than ever before, said former Deputy Premier Stephen Miles.

A plan is needed to make sure homes are delivered when and where they need to be.

In the 12 months to November, SQM reported the number of Brisbane property listings had fallen 12.6%.

Canberra listings were up 24.4%, Hobart listings were up 22.1%, Melbourne listings were up 4.2%, and Sydney listings were up 3.5%.

Several experts in the real estate industry have helped us pick spots in Brisbane that could be particularly lucrative.

January 9, 2024 by ash 0 Comments

Young buyers can enter the market with rentvesting: a new trend

Buying a home in Newcastle or Lake Macquarie may seem increasingly out of reach for some young people, but there is a solution – rentvesting. 

Since prices and interest rates have risen 143 times in just 15 months, rentvesting is gaining popularity. 

Nigel Watts, managing director of Niva Property, says this may be a viable method for young people looking to get into the property market. 

According to him, rentvesting is simply renting where you want to live and investing in a property in a better location. 

“The first thing you should do is get into the property market at a young age, and with a well-chosen property you can start to build equity and wealth.   

In addition to your normal savings, you can use this equity to help fund a future home. 

The second benefit is that it teaches people about investing and finance, which is a great life skill to have, and thirdly, renting can be a great way to live your life before settling down in a family home.”   

In the past five years, the average house price in Newcastle has risen 38% to $966,000. 

There is a 43% rise in Lake Macquarie, to $935,000. 

In the current real estate market, homebuyers typically need $200,000 saved for a 20% deposit. 

According to him, a house loan with a 6% interest rate would require a monthly repayment of $4,593 – 63% of the average household income in Lake Macquarie and Newcastle.   

 A RENTVESTER’S GUIDE TO GOOD PROPERTIES  

A good rentvesting property will have low vacancy rates and good overall yields, Nigel says. “Buying in a more affordable area with low prices, investing in a location with strong macro indicators that show positive capital growth prospects, and investing in a suburb with low rental vacancies will make for a good investment.” 

Keeping the property for the long term is the most important thing, he adds. 

The rewards of your hard work may not be realized if you sell within the first five years.”  

In order to ensure affordability, he recommends working out cash flow projections before you invest. 

“Investing in an established property that is able to be improved is a good strategy because you know what you are getting and there is generally less risk involved than buying off the plan.” 

It is especially true now that many builders are going into liquidation and costs are rising.   

By carefully planning and managing renovations, you can also manufacture additional equity with an older established property.       

“Avoid something too rundown that needs a lot of work and costs a lot in maintenance and repairs,” he warns.   

According to historical data, houses tend to outperform units, but if you can only afford a unit, consider one in a smaller complex which generally has fewer strata issues, lower costs, and fewer hassles. 

WHERE TO INVEST IN RENTVESTMENTS  

Nigel says, “That’s the million-dollar question.”.   

“If you don’t feel comfortable buying away from where you live, your options are obviously limited, but you can still buy local and achieve your goals. It all comes down to where you live, affordability options and of course your borrowing capacity.   

Setting realistic expectations is key, and you may need to invest in a new area.  

You could also consider living in your rental property or rentvesting with a sibling or friend, according to Nigel.       

Disclaimer: Nigel Watts is not a financial adviser or tax accountant and is not authorised to provide financial advice or taxation advice.  You should ensure that you discuss your financial position and any investment decisions with your accountant and/or financial adviser.