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Why you should get busy investing in Brisbane Residential Property in 2013

brisbane investor brisbane property investment

Is now the right time to be investing in Brisbane rental property?

Terry Ryder has some interesting insights for Brisbane Property Investors on ways to pick the ideal time to get into the market.

The biggest twits in real estate are the people waiting for the trough. brisbane investor brisbane property investment

Many tell me they’re not going to act until “the market bottoms”. I ask how they think they’ll be able to identify the bottom when it arrives. They don’t have an answer.

Primarily, I think, they’re waiting to read about it in a newspaper.

Here’s the problem. There’s nobody writing for newspapers with sufficient expertise to know a trough from a peak.

Here’s another. By the time journalists start writing about the market bottoming, after receiving a press release from an attention-seeker, it will be too late. It will have occurred six months earlier.

And here’s the biggest problem. While people have been scratching their bottom waiting to pick the bottom, the bottom has already happened. In many key markets, it’s already part of history.

It may not feel so for some people, but 2012 has been a much better year in real estate than last year. Darwin and Perth have had huge rental increases and prices have started to follow. The bottom has long since passed in those two cities.

The latest figures for Sydney and Brisbane also indicate the declines of 2011 and early 2012 have been arrested, and those markets are also moving forward. 

Around Australia, many regional markets have left their troughs in the distant past and have had strong growth years in 2012. There are dozens where prices grew 5% or more in the past 12 months.

The trough-seekers have been piling into markets like Gladstone this year, having missed the trough which happened two to three years ago.

As I wrote in a Property Observer column earlier this month, it doesn’t get any better than this for property buyers. All the indicators – including rising sales activity, increased lending levels, improved clearance rates, six interest rate reductions and seven consecutive quarters of improved affordability – declare that now is the moment.

So, following an improved 2012, next year will be better again. I’m expecting growth in all the capital cities except Melbourne (Hobart I’m not sure about – weak economic fundamentals may be counter-balanced by the advancement of key construction projects and state government spending packages).

The regions will again provide the most upside for property investors. Many regional towns and cities have been solid in 2012 and some have been very strong.  There will be more growth markets in 2013 than this year.

It’s important to pick the right ones. The key factors to look for include diverse economies, proactive local councils, spending on infrastructure and expansion of jobs-creating businesses.

The best capital growth will be found in those that experienced significant rental growth in 2012, but not the same level of price growth – yet.

Most likely these will be regional areas touched by the resources sector but not dependent on it. Toowoomba in Queensland and Tamworth in NSW provide a couple of pertinent examples. These places have been important, prosperous regional centres long-term but have an additional powerful element to their economies with the emergence of resources activity in their area of influence.

These are safe places to invest – you’re getting the benefit of the mining sector without the risk of buying in a mining town.

So here’s the best tip for getting the best out of 2013: get busy now. Don’t be a herd animal. Most investors follow the pack and end up like pigs feeding at the trough, in a shambolic frenzy – except, it’s not a trough any more. By the top everyone’s gorging themselves, it’s well on the way to the peak – or has already passed it.

This article was originally posted on propertyobserver.com.au and written by

Terry Ryder who is the founder of hotspotting.com.au and can be followed on Twitter.

For more, watch Terry’s free webinar Regions vs capital cities: Where to invest in 2013

 

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Gold Coast

“2021 saw an insatiable appetite for off the plan projects in premium locations.” Five Minutes with Paul Geduon from S&S Projects

SS Projects

It was a stellar 2021 for the Gold Coast apartment developer, S&S Projects.

They sold out Awaken, their Rainbow Bay project of just nine apartments, with a top sale of $8.15 million secured for the penthouse, which was bought by a US couple.

Their nearby project, Esprit, is over 80 per cent sold, and there are plans already on the desk of the Gold Coast City Council for their next project, a rare mixed-use apartment and hotel development in Palm Beach.

Urban recently caught up with S&S Projects director Paul Geddoun to discuss the Gold Coast apartment market.

JC: How did you view the performance of the off the plan market in 2021, and what are the strongest positive and negative factors that will influence outcomes in 2022 and 2023?

PG: 2021 saw an insatiable appetite for off the plan projects in premium locations.

Although the less premium project markets has been strong, the price growth has not been at the same level as premium projects. Sales volumes at record pricing in premium projects is unlike anything we have seen previously.

Esprit

Esprit 217-227 Boundary Street, Coolangatta QLD 4225 

We expect the market to remain strong in 2022 and 2023 however the growth will not be at the same level as there was a little bit of catch up along with more limited stock which has driven these markets at these levels where there is no more projects available and increased competition which will slow the growth.

The negatives are that there has been a shortage in materials and labour due to border restrictions along with globally driven stimulus which has put excess funding into the market with international infrastructure upgrades for job creation to stem any recession fears as a result of Covid which has forced up the cost of construction which may cause some project issues.

JC: What trend (short term or long term) has prompted your greatest enthusiasm for the apartment market, and what is the issue of most concern to you and or your clients?

PG: In general, real estate has seen great growth which has provided many with increased equity which has driven decisions for holiday homes and downsizing into apartments. The greatest concern in the near future is interest rates and people being overextended.

JC: Has urbanisation stalled amid the rush to the regions and what will it look like over the decade ahead? 

PG: I think urbanisation is strong with price growth and competition allowing developers to create better built form outcomes and develop sites in areas where the feasibilities once didn’t allow it.

I think the future looks strong for many new areas that have been the recipients of this higher-grade development creating better urban areas.

JC: How important do you view the push for sustainability practices in the apartment market, and what initiative has seized your interest or focus? 

PG: There is a strong focus on sustainability, and this is being most represented in the fixtures and fittings being installed which are more efficient and it is also common practice to place as much solar on the roof of project to assist in the ongoing sustainability and costs of the operating buildings.

 

Article Source: www.urban.com.au

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Opinion

How home loan mortgages rose in 2021 to record levels

home loan

Lender records were broken in every state and territory except WA, according to the ABS data

Purchases by NSW owner occupiers came with mortgages sat at around $770,000, according to the latest lending data.

The national average mortgage size for owner-occupiers has reached a record high of $595,568 according to ABS data.

Records were broken in every state and territory except WA.

The national mortgage was up $92,404, an 18% hike over the year.

The November ABS Lending Indicators, released 14 January, advised the loans were for the purchase of new and existing dwellings.

The national average mortgage size for owner-occupiers has reached a record high of $595,568 according to new ABS data out today.

Records were broken in every state and territory except WA, according to the ABS data in original terms.

Victorian home buyers saw the biggest jump in their mortgages, up 24% or $120,000 to $618,602.

Average new owner-occupier mortgage size, November 2021

Amount Year-on-year change
National
$595,568 $92,404 18.4%
NSW
$769,459 $125,112 19.4%
Vic
$618,602 $120,032 24.1%
Qld
$513,649 $73,604 16.7%
WA
$439,578 $22,868 5.5%
SA
$421,801 $38,016 9.9%
ACT
$585,859 $58,434 11.1%
TAS
$445,915 $73,175 19.6%
NT
$433,333 $53,271 14%

“Demand for Aussie housing remains firm, but affordability has decreased because home prices have surged more than wages,” Ryan Felsman, senior economist at CommSec noted.

“In November housing stock was high and the country’s two largest states were freshly out of lockdown, so it’s no surprise to see a rise in new lending,” RateCity.com.au research director, Sally Tindall, said.

“Growth in property prices is starting to slow on the back of fixed rate rises and a crackdown by the regulator, but the opening up of borders this year will increase demand, keeping prices moving north,” she forecast.

The data did not include refinancing, nor renovation loans.

Renovation loans surged by 18 per cent in November to a record $569 million. The value of lending for renovations is up by a massive 115 per cent on a year ago.

Canstar analysis showed Australian mortgage holders refinanced $15.72 billion worth of loans to a new lender in November 2021, down 2.3% from October.

 

Article Source: www.urban.com.au

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Opinion

Should you buy that investment property this year?

investment property 1

Property investors are set to snap up homes and apartments across Australia in 2022, as interest rates remain low and rental vacancy rates continue to tighten.

But experts are forecasting it won’t all be smooth sailing, as future landlords face the uncertainty of both federal and state elections, with housing policies that are yet to be defined. They also face possible interest rate hikes, which are looming on the back of inflationary pressures.

While interest rates may not rise immediately, tighter lending rules introduced in 2021 have already made it tougher for investors to get a mortgage, Loan Market Mortgage Broker Daniel Koutsamanis said. But that hadn’t yet had a major impact on the number of people looking to invest.

Changes to loan rules, including the calculation of debt to income ratios, (the amount someone can borrow depending on their earnings), and of interest rate buffers that determine if a borrower can afford a mortgage if interest rates rise by 3 per cent, had seen the amount that could be borrowed fall by between 5 and 10 per cent.

“Budgets are coming down a little bit, but there hasn’t been a drastic change,” Mr Koutsamanis said. “There’s still a fairly decent amount of confidence, with clients wanting to invest. The sentiment is still pretty decent, pretty strong.”

That confidence follows a stellar year for investors, with the number of new loan commitments jumping by 89.6 per cent across the year to October 2021, Australian Bureau of Statistics figures showed.

There was $9.73 billion of new loan commitments for investment properties in October alone, the data showed, despite the hit to rental markets in both Sydney and Melbourne over the year.

Rents in Melbourne dropped significantly over 2021, making it one of the cheapest capital cities to find a rental property. Apartment rents dropped by 7.5 per cent across the year to September and house rents fell by 2.3 per cent, Domain figures show.

Sydney apartment rents fell by 2 per cent over the same period, while house rents rose as people looked for bigger properties during lockdown.

investment property

Tenants have flocked to Queensland to escape lockdowns. Photo: Domain 

Both markets rely on overseas migration to help fill rentals, including international students who were kept out of the market because of the COVID-19 pandemic.

Unlike Sydney and Melbourne, Queensland saw an influx of new tenants and new buyers, moving away from lockdowns in both cities.

Mr Koutsamanis said some investors were still looking at buying in Queensland, where the vacancy rate has dropped below 1 per cent and is just 0.5 per cent on the Sunshine Coast, according to SQM Research.

A rise in tenant numbers is now predicted in Sydney and Melbourne as international borders reopen to overseas students, workers and tourists, providing opportunities for investors across the country, Sydney-based Aus Property managing director Lloyd Edge said.

“With the international borders reopening, there is opportunity for more growth, with students returning at the moment. I think the properties in the city might start to come back,” Mr Edge said.

Demand for Airbnbs could also return, offering investors a way back into the short-stay rental market, Mr Edge added.

While rents may improve slightly with borders reopening, they would stay lower until migration returns to normal levels and investors would need to think about the long term, keeping properties for at least 10 years, said Melbourne-based buyers agent Wendy Chamberlain.

“Over time, real estate is a forgiving investment, so investors do need to look to the long term. They need to buy assets that can weather the storm rather than be hard hit, like student accommodation.”

Ms Chamberlain said looking further out of the city, and in regional areas, where investors could buy a bigger property with their money would help attract tenants looking for more space.

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