What can we expect to happen to our property markets over the next decade?
That’s a common question I’m being asked by both our clients at Metropole and various media sources.
But I think I’m disappointing them with my answers because I tend to say something like “a lot will happen over the next decade, but I don’t make forecasts – instead I have expectations.
Now there’s a big difference between forecasts and expectations.
I expect there to be a recession in the next decade.
But I don’t know when it will come.
I expect the property market to boom and then prices will tumble again. But I don’t know when.
I expect that some investments I will make won’t do well.
But I don’t know which ones they will be.
I expect interest rates will rise. Probably not for a number of years. In fact, I don’t know when.
I expect that some investments I will make won’t do well.
But I don’t know which ones they will be.
And I expect another world financial crisis.
But I have no idea when it will come.
Now these are not contradictions or a form of cop out
As I said…there’s a big difference between an expectation and a forecast.
An expectation is the anticipation of how things are likely to play out in the future based on my perspective of how things worked in the past.
A forecast is putting a time frame to that expectation.
Of course, in an ideal world we would be able to forecast what’s ahead for our property markets with a level of accuracy.
But we can’t, because there are just too many moving parts.
Sure, there are all those statistics that are easy to quantify, but what is hard to identify is exactly when and how millions of strangers will act in response to the prevailing economic and political environment.
Then there will always be those X factors that crop up.
Those unforeseen events that comes out of the blue, which could be local or overseas that undo all the forecasts we made.
Just look at these two major events that have rocked the world in the first month of this year.
- The terrible, tragic bushfires in Australia. At present it’s uncertain how this will affect our economy, the forecast budget surplus, tourism or consumer confidence.
- The Middle East conflict which will affect fuel prices and economies around the globe
While I’m emphasizing the economic impact, I’m not in any way belittling the tragic human impact these unexpected events have had.
So what should you do about this?
I’ve found the most practical approach is to have expectations of what could happen without specific forecasts.
That’s because when you expect something to happen at some stage in the future, you’re not surprised when it happens.
Expecting the worst while preparing for the best forces you to invest with room for error, and psychologically prepares you for the inevitable disappointments.
This is exactly how I planned for the most recent property downturn of 2018-19.
I didn’t know when it would come, how long it would last or how it would affect the value of my property portfolio or the cash flow of my business.
But I knew a downturn would come once again, and I was prepared for it with cash flow buffers to see me through the difficult times.
What I’m trying to explain it that there’s a huge difference between, “I expect another next property downturn sometime in the next decade” and “I expect the next property downturn in the second half of 2024.”
One of the big differences is how I invest
If I expect the property upturn we’re currently experiencing will be followed by another property downturn, then I won’t be surprised when it comes.
But since I don’t know when this will happen, I won’t make the focus of my property investing trying to time the property cycle.
That’s because trying to time the property cycle or looking for the next “hot spot” are two of the reason many property investors fail.
On the other hand, strategic investors maximise their profits during property booms and minimise their downside during busts by investing in assets that have “always” worked, rather than looking for the next hot spot or for the type of property strategy that works “now.”
They own investment grade assets in investment grade inner and middle ring suburbs of Australia’s three big capital cities.
The type of property that keep growing in value over time without fluctuating wildly in price when the property cycle slows down.
If you’re looking at buying your next home or investment property here’s 4 ways we can help you:
Sure our property markets are improving, but correct property selection is even more important than ever, as only selected sectors of the market are likely to outperform.
Why not get the independent team of property strategists and buyers’ agents at Metropole to help level the playing field for you?
We help our clients grow, protect and pass on their wealth through a range of services including:
- Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family. Planning is bringing the future into the present so you can do something about it now!
- Buyer’s agency – As Australia’s most trusted buyers’ agents we’ve been involved in over $3Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective – that’s something money just can’t buy. We’ll help you find your next home or an investment grade property.
- Wealth Advisory – We can provide you with strategic tailored financial planning and wealth advice.
- Property Management – Our stress free property management services help you maximise your property returns.
This article is republished from propertyupdate.com.au under a Creative Commons license. Read the original article.
Revealed: The 10 Brisbane suburbs in which to buy property in 2020
These are the 10 up-and-coming Brisbane suburbs tipped to pay dividends for property investors in 2020.
THEY are called the up-and-comers; suburbs that buyers may have turned their noses up at five years ago, but which now have the potential to boom.
Brisbane’s housing market is ripe for investment as cheap money, buyer confidence and a lack of supply drive demand for property.
Industry experts are saying now is the time to buy, so using their tips, The Courier-Mail has compiled a list of the 10 best suburbs in which to buy property in 2020.
The results are based on criteria such as infrastructure, public transport, dining precincts, buyer demand, school catchments, neighbouring suburbs, capital growth and affordability.
And so as not to ignite a turf war, the chosen Brisbane suburbs are a mix of north and south locations.
1. BRIDGEMAN DOWNS
Distance from CBD: 13km
Median house price: $785,000
Number of house sales in past 12 mths: 137
This under-the-radar suburb was once only considered for prestige, rural residential properties, but is evolving into a solid investor option, according to ASPIRE Property Advisor Network.
“Increasing rents, falling vacancies, a rising population and affordable property options
are the gold standard when it comes to selecting promising investment locations and
Bridgeman Downs ticks all those boxes,” ASPIRE managing director Richard Crabb said.
“Most long-term Brisbane residents probably wouldn’t think of Bridgeman Downs as
an investor enclave, because it is so tightly held at approximately 85 per cent or more
owner-occupied, but this is exactly why we have pegged it as a great investment
Latest figures from SQM Research, a data company, show that the rental vacancy rate in Bridgeman Downs tightened from 4.5 per cent in November 2016 to 3.2 per cent in November 2019.
“A combination of rising rents and tightening vacancies is a key indicator of
investment income growth potential,” Mr Crabb said.
He said the suburb’s population had grown about 13 per cent over the past five years.
2. CARINA HEIGHTS
Distance from CBD: 8km
Median house price: $667,500
Number of house sales in past 12 mths: 60
Carina Heights set some records last year at the entry level price range, which has pushed
the average house price higher, to $667,500, according to Realestate.com.au — not bad for a suburb that once struggled to crack an average of $600,000.
“It’s the first-home buyers, the investors and, interestingly, the upsizers who have been attracted to this little pocket in the south,” independent buyer’s agent Wendy Russell said.
“Knock-downs and rebuilds are on the minds of home buyers who see value in Carina Heights now that an average house in neighbouring Camp Hill will set you back a whopping $220,000 more, at an average of price of $910,000.”
Ms Russell said she believed Carina Heights would continue to see the knock-on effects of being the next suburb over from blue-chip suburbs of Camp Hill and Norman Park.
3. EVERTON PARK
Distance from CBD: 9km
Median house price: $605,000
Number of sales: 110
If you haven’t checked out the newly opened ‘foodie laneway’ — Everton Plaza’s Park Lane, you’re missing out.
Described as the foodie epicentre for northsiders, Everton Park has hit the mark when it comes to attracting those who enjoy the café/foodie lifestyle, but don’t want to head into
the city to get it.
Ms Russell said lifestyle suburbs attracted home buyers and renters.
“Keep an eye on this little northside suburb because at an average house price of $605,000, it will undoubtedly attract the attention of investors and first-home buyers in 2020,” she said.
4. FERNY GROVE
Distance from CBD: 13km
Median house price: $620,000
Number of sales: 60
Ferny Grove has experienced a 23 per cent rise in views per home listing on Realestate.com.au, a property listings website, over the past quarter as buyers start to realise its potential.
Realestate.com.au chief economist Nerida Conisbee said the suburb was well catered for when it came to schools and parkland.
“It also has a train station, which is popular with buyers,” Ms Conisbee said.
“With a median of $620,000 it is a bit more affordable and is a price point that is appealing to investors.”
Distance from CBD: 10km
Median house price: $550,000
Number of sales: 81
Keep following the train line northwest and buyers with a budget of $600,000 or less will find Keperra.
Ms Russell said the flow-on effect from the suburb’s neighbour, Mitchelton, should guarantee property prices in Keperra rise this year.
“Just 10km from the CBD and with the train at your doorstep, the suburb is certainly an affordable option for first-home buyers looking to enter the market,” she said.
Distance from CBD: 29km
Median house price: $395,000
Number of sales: 95
In Greater Brisbane the suburb of Loganholme has experienced strong growth in its median house price in recent months, according to Real Estate Institute of Queensland (REIQ) southern Brisbane zone chair Rebecca Herbst.
“The attraction of Loganholme is its easy accessibility to the M1, whether you work in Brisbane’s CBD, or are heading to the Gold Coast on the weekend,” Ms Herbst said.
“Lifestyle is easy, the Logan Hyperdome is close by and the houses are affordable. It is easy to pick up a nice home for between $350,000 and $450,000.”
Other suburbs in Logan City that have experienced above average price growth and have further capital growth potential include Crestmead and Hillcrest.
“In Crestmead, affordability is the key,” Ms Herbst said. “Where else can you pick up a three-bedroom brick home for $250,000, only 30 minutes and 30km from the Brisbane CBD?”
Agent comparison site OpenAgent found Logan had some of the highest rental yields for houses, with Logan Central at 6.49 per cent.
Damian Piotto of Ray White Marsden said Logan was ideal for investors, particularly those from interstate.
“Entry-level housing is always appealing, especially to interstate investors when they compare local house prices — NSW in particular — and see significant value long-term,” Mr Piotto said.
“Rental returns are always going to be strong with the area located right in the middle of Brisbane and the Gold Coast, great public and private schooling, and the blue-collar industry within a 10 minute drive of these areas.”
Distance from CBD: 10km
Median house price: $685,000
Number of sales: 112
School catchments are all the rage in Brisbane and one of the most sought-after includes Mansfield.
Ranking number 2 in the 2019 Better Education Top 100 Public High Schools in
Brisbane, with a state overall score of 99, the Mansfield State High School catchment has become a hot spot for families.
Property Club president Kevin Young said homes in good school catchments could command an extra 10 per cent weekly rent, compared with suburbs outside the catchment area.
“The focus on property buyers moving forward is to identify new investment in schools that will boost demand for homes in the local area,” Mr Young said.
“With the start of a new school year, it is timely that property buyers in Queensland start to target areas where government is going to invest significant amounts of money in new educational facilities, which will boost the future demand for housing in these areas.”
Distance from CBD: 11km
Median house price: $572,500
Number of sales: 10
Let’s not forget Brisbane’s southwest, where one suburb to watch is Oxley.
A train ride from Oxley Station to Brisbane Central takes about 27 minutes and with an average house price of $572,500 it should be on the watch list for first-home buyers and investors.
“With neighbouring house prices up to $360,000 more (Corinda, $787,000, Sherwood, $932,500 and Graceville, $912,000), Oxley has the recipe for growth as an outlying
suburb on the train line with an affordable entry price for homebuyers,” Ms Russell said.
9. STAFFORD HEIGHTS
Distance from CBD: 8km
Median house price: $611,000
Number of sales: 115
Stafford Heights popped up on the radar of buyers in 2019 because of its affordability and accessibility.
“With an average house price of $611,000 it’s hard to pass up this suburb as an alternative to the more expensive neighbouring areas of Kedron and Gordon Park that had their day when the M6 Tunnel opened,” Ms Russell said.
She said the suburb’s proximity to Prince Charles Hospital and Westfield Chermside Shopping Centre made it appealing, along with the fact it was flood-prone.
“Stafford Heights could very well be in for continued growth in 2020 with so many ticks against it’s name — affordable, accessible and it doesn’t flood,” Ms Russell said.
Russell Duplock and Larissa Lawrence recently bought an investment property in the suburb through Ms Russell.
“We liked the general feel of Stafford Heights,” Mr Duplock said.
“There are a lot of young families in the area and a lot of property renovations happening too.”
Mr Duplock said the property was in a good school catchment and close to shops and restaurants, which he hoped would support capital growth.
“I feel Stafford Heights in the next couple of years is going to go well, considering it’s still affordable,” he said.
The couple also had no trouble leasing the property.
“We had four applications from the first open home and had it rented two days after, so plenty of interest,” Mr Duplock said.
Distance from CBD: 14km
Median house price: $625,000
Number of sales: 204
The bayside suburb of Wynnum offers lifestyle, infrastructure and affordability.
InSynergy chief property investment advisor Richard Sheppard said investors should consider the middle and outer rings of Greater Brisbane for houses, because the boom had largely started in the inner-ring housing suburbs and was rippling its way out.
Mr Sheppard said Wynnum, and the neighbouring suburbs of Manly and Lota, had strong market fundamentals that would underpin property price performance in the years ahead.
“That’s because, not only are they in the middle to outer ring areas, they offer
lifestyle while also being close to new and expanding infrastructure like the airport
and port, as well as road upgrades that will improve access to the CBD,” he said.
This article is republished from www.news.com.au under a Creative Commons license. Read the original article.
How is Brisbane’s unit market faring?
While the Brisbane housing market remains in full swing, a senior researcher has questioned the value of units in the Queensland capital.
In a recent blog post, Eliza Owen, head of research at CoreLogic, discussed whether Brisbane units were still in oversupply.
“The narrative of oversupply and underperformance in Brisbane units has dominated conversations around south-east Queensland property for almost five years,” Ms Owen wrote.
“At January 2020, Brisbane unit values remain 11.5 per cent below their 2010 peak to be at similar levels to 2007. But the latest data on property values, construction and population growth suggest that the story is changing.”
Ms Owen said it is worth noting that oversupply is “very much a unit-centric story”, with houses across Brisbane posting strong capital growth in recent years, “except for a brief, cyclical downturn over part of 2019”.
“In the previous trough-to-trough cycle that lasted between 2012 and 2019, annual house value growth outperformed unit growth by an average of 290 basis points. This is larger than usual discrepancies and is above the series average difference of 130 basis points,” Ms Owen said.
“In other words, the past cycle saw units significantly ‘underperform’ relative to housing stock in Brisbane. The rolling annual growth figure shows that unit values have largely declined since July 2016.
“2016 was a time when units were being built across Brisbane at an unprecedented level. ABS completion data suggests 21,342 units were completed, against a historic average of 11,585 per year. In the December 2016 quarter, the number of unit completions even eclipsed the number of houses delivered across the state.”
Furthermore, Ms Owen noted both CoreLogic and ABS data shows there’s been a convergence between the number of dwellings required and supplied since the beginning of 2018.
“With approvals data suggesting a decline in construction, and steady estimates of population growth, Queensland dwellings may fall into undersupply in the year ahead. Rental yields are also well above the capital city average at 5.3 per cent gross, meaning there could also soon be a turning point in investor demand.
“However, one unknown in this analysis would be projects that have stalled due to falling unit values in the past few years. If these re-commence, added supply could once again weigh down growth.
“The turnaround in the supply-demand dynamic is already being seen in unit values. Since bottoming out in June 2019, CoreLogic indices show the Brisbane unit market has recovered 2.2 per cent. This fits in with a more broad-based recovery, as reductions in the cash rate have reduced the cost of servicing debt, and increased incentive to purchase property,” Ms Owen concluded.
This article is republished from www.smartpropertyinvestment.com.au under a Creative Commons license. Read the original article.
Brisbane Poised To Attract More Buyers
Brisbane’s housing market is poised to attract many potential homebuyers this year, supported by its infrastructure pipeline and the increasing interstate migration, according to a forecast by the Finance Brokers Association of Australia (FBAA).
The affordability gap between Brisbane and the two biggest capital city markets, Sydney and Melbourne, has influenced the influx of people to Queensland, boosting the housing demand in Brisbane.
FBAA said Sydney’s property cycles, in particular, have been the driving force of interstate migration to Brisbane.
“The real effect of this migration increase has come into question and rightly so, how influential can an additional 30,000 people be to an entire capital city market. The driving force is the affordability gap between Sydney and Melbourne,” FBAA said.
Recent figures from the Australian Bureau of Statistics show that Sydney is currently 64% more expensive than Brisbane.
“Each time we’ve seen the price gap rise, we’ve seen an exodus of people out of New South Wales to Queensland resulting in Brisbane price increases,” FBAA said.
Furthermore, the pipeline of infrastructure developments in Brisbane might boost its appeal to potential buyers.
Some of the anticipated developments include the Brisbane Airport expansion, Brisbane Metro, Northshore Hamilton Precinct, Cross River Rail, Brisbane Live, and Queens Wharf redevelopment.
“The evolution of Brisbane combined with the proven market drivers will be critical to the direction in which Brisbane’s property cycle moves. In terms of price rises, we’ll require the imbalance of supply and demand to favour the demand,” FBAA said.
According to a separate forecast by Domain, Brisbane is slated to record the second-highest price growth this year next to Sydney.
“We forecast the median house price to rise by 8% in 2020 and in 2021. This follows a period of soft price growth when Brisbane’s house prices rose only 5% in the previous three years,” said Trent Shire, an economist at Domain.
With this price-growth projection, Brisbane could witness its median house price go over the $600,000 mark for the first time.
This article is republished from www.yourinvestmentpropertymag.com.au under a Creative Commons license. Read the original article.
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