Perth median price to hit the $1million mark within 10 years

Posted by Scott Banks on March 23, 2010

Perth’s median house price will hit $1 million in the next 10 years, a property price monitoring group predicts.

A review compiled for the Sunday Times newspaper by Australian Property Monitors has tipped the median house price in many Perth metropolitan suburbs to hit $1 million within five years.

Within 10 years, only a “handful of suburbs in the Perth metropolitan area will have a median house price below $1 million”, the Sunday Times reported.

Western Australia’s house values could be the highest in the country, according to the paper, as the state rides another expected resources boom in the next decade.

The median house price in Peppermint Grove, which lies on the Swan River, just outside the Perth CBD, was predicted to reach more than $25 million in the next decade.

But while the prospect of housing prices doubling in the next 10 years was good news to some property buyers, the paper said first-home buyers were increasingly being priced out of the market.

news.smh.com.au

Property Investment News – Australia

Posted via email from scott banks real estate group

10 keys to property investment success…

Posted by Scott Banks on March 22, 2010

Most home owners and investors are chasing one thing: explosive capital growth.

One key to getting it is your area’s overall sales performance.

Some locations and suburbs surge ahead of others and deliver amazing price gains. They’re called property ‘hotspots’.

Why should we be chasing hotspots?

“Most property investors want capital growth,” Yardney says. “If you get more than average capital growth, you can borrow against the increased equity and go (buy) again.”

So how can you tell if the suburb you own a house in, or want to buy in, is a hotspot – or potential hotspot?

Here are 10 signs to look for:

1. New transport

New transport links can instantly transform an area’s desirability. “It brings areas that were more remote into closer proximity to the city,” Yardney said. He adds there are usually three waves of price gains on the back of new transport infrastructure: when it’s first announced and everybody gets excited, when construction begins, and near completion. “Those that do best get in early of course, but they’re taking a potential risk that it may not ever be completed or take longer than expected,” he said.

2. Regeneration/rezoning

Governments can spend millions revitalizing an area, improving amenities, road and other infrastructure. In Sydney, the regeneration of Redfern has helped drive strong prices gains for homes. Rezoning from industrial to commercial can also bring a new wave of people moving in, pushing prices higher.

3. New infrastructure

Apart from roads and transport, the building of new amenities including schools, sporting facilities, and universities can transform a location and boost demand for houses.

4. Social trends – sea change

Major social trends can transform areas overnight into high-demand areas. Sleepy coastal areas became hot during the ‘sea change’ trend when people seeking a quieter life moved there permanently or snapped up holiday homes.

5. Employers relocating

A new factory or other major source of employment can suddenly boost demand for housing and drive up prices.

6. Gentrification

Yardney says one of the most powerful trends is gentrification. Previously working class areas with desirable attributes, such as proximity to the CBD, can suddenly become attractive to more wealthy buyers.

7. Ripple Effects

Housing recoveries often start close to the city centre and move out in what’s dubbed the ‘ripple effect’. Learn to ride the wave. Yardney says when prices rise people go across the road to the next suburb for better value. “People buy in the best location they can afford and if they can’t afford there they move to the neighbouring suburb,” he said.

8. Economic boom towns

Boom towns are driven by a major economic factor that has made people wealthier or attracted more residents. The most obvious example is Perth where property has surged on the back of the resources boom.

9. Exclusivity

Yardney says some areas are hotspots simply because of their exclusivity which causes them to outperform market averages. “Turnover is low and it’s difficult to buy and when it does come up for the people who buy there, money isn’t as big an object,” he said.

10. Desirability

Some things never stop being in demand: houses with access to the water and houses close to the CBD. These may not only hold up better during property downturns, but their strong rebounds can quickly turn them into hotspots when the market recovers.

Source: http://kerbsideappeal.wordpress.com/

Property Investment News – Australia

Posted via email from scott banks real estate group

Sydney Property BOOM tipped for 2010: a very strong tip to put your house on…

Posted by Scott Banks on February 25, 2010

Ready … Jane Flemming and Ian Purchas with twins Samuel and James

on the hunt for property in Woollahra. Photo: Helen Nezdropa

WHAT a difference a year makes.

Last February many property experts were prophets of doom in the face of the world financial crisis. But today’s Sun-Herald Property Guide paints a rosy picture for a large number of home owners.

Eighty two suburbs are tipped to see median price growth of 10 per cent or more for houses over the next year, while 53 suburbs will see 10 per cent growth or more in apartment values.

The Fairfax-owned Australian Property Monitors, which gives price data and predictions for more than 600 Sydney suburbs in today’s guide, expects some of the year’s hottest performers for houses to be beachside: Bondi Beach, South Coogee, Tamarama and Curl Curl with more than 12 per cent median price growth likely.

The star apartment suburbs include Darling Point, Point Piper, Cammeray, Lane Cove, McMahons Point and Avalon, which are also tipped to experience median price growth of more than 12 per cent.

APM economist Matthew Bell said rising interest rates would take their toll on the more affordable suburbs in Sydney by the end of the year.

”Once we reach 7.5 per cent to 8 per cent, rates will start altering people’s buying decisions,” he said.

Yet today the toughest challenge facing buyers continued to be finding an affordable home that appealed to them, a situation made worse by a shortage of new listings in many areas.

”Prices are on the way up,” said downsizer Leslie Reily, who has been scouring Glebe, Camperdown, Erskineville and Newtown for a three-bedroom house or apartment priced up to $900,000 since April.

”I’ve come close to buying a couple of times but just missed out. It’s a difficult one – things are changing really quickly and with interest rates going up, it will be interesting to see if prices stabilise.” She’s not holding her breath.

”In the end, it comes down to when you need a house,” she said.

Upgraders are having similar problems after prices unexpectedly increased in the second half of last year as confidence improved.

Olympian Jane Flemming and husband Ian Purchas – parents of twins James and Samuel – forked out $2500 in legal and inspection expenses in preparation to bid at a recent auction only to have the house sell for $800,000 more than the agent quoted.

“Prices are moving at the mid to upper end of the market, I think driven by [consumer] confidence,” Flemming said.

“If we found something tomorrow we would make an offer and move in next week. All our ducks are in a line now – we just need to find the right property.”

Most analysts anticipate a slowdown in first-home buyer activity in 2010, with researcher RP Data reporting the volume of first-timers last year was the highest on record – a 55 per cent increase on the previous year.

SOURCE: smh.com.au

Property Investment in Australia

Tips on how to pick the next BOOM locations in Australian property

Posted by Scott Banks on February 4, 2010

Read the news to see where to invest in property

WANT to know how to exploit investment opportunities this year? Take several large steps backwards.

Investors fail to see the best opportunities to buy or develop growth real estate because they look too “micro”. The bigger picture is more important. But they can’t see the suburb for the houses.

Many investors put their energies into scrutinising the property to buy. That’s important — but where they buy is more important than what they buy.

Most crucial of all is the rationale supporting the where.

To get investment right, punters need to know about matters that, at first glance, appear to have little relevance. Here’s an example. Kevin Rudd made a speech to an Australia Day reception in which he said his government planned to “radically invest” in infrastructure.

The Prime Minister said the “core challenge” for the government was dealing with economic problems created by an ageing population, with a quarter of Australians predicted to be over 65 by 2050.

“We need to grow the economy faster by boosting the productivity of our economy,” he said. “That is the only solution forward for Australia.”

He proposes to achieve this by investing rapidly in infrastructure, in skills and in education and training. He cited multi-billion-dollar investments in a national broadband network, road and rail construction, education and health as examples of where the federal government would spend heavily over the next few years.

Political rhetoric is not a solid foundation for an investment strategy, but we know from recent experience that this government is willing to go deeply into deficit to fund infrastructure.

This is highly relevant to property investors and developers as few things create real estate growth more than new infrastructure.

A $150 million expansion of Nambour Hospital on the Sunshine Coast is an example of a relatively small infrastructure project that ripples through the local economy.

It’s regarded as a lifesaver for the local building and construction industry still recovering from the downturn.

The project improves local services, creates jobs (220 construction workers on site every day) and provides business for local tradespeople and suppliers, and generates demand for housing.

Given that the new building will house an expanded outpatients clinic, renal chairs, antenatal and pediatric clinics, special care nursery and pediatric ward, general wards and a purpose-built respiratory-infectious diseases ward, there will be new jobs in its operation.

Property investors might see a headline about growth in the aerospace industry near Ipswich and turn the page.

But they should be interested. Ipswich, in the growth corridor extending southwest from Brisbane, is expected to become the nation’s epicentre of aerospace when the next phase of RAAF Base Amberley is constructed.

The project is predicted to bring thousands of jobs to Ipswich when construction begins in 2012. The KoBold Group says it will position Ipswich as a global leader in aerospace and defence industries. Executive manager of KoBold Group Jeff Budgen says: “It will bring hundreds of millions of dollars to the Ipswich region.”

Federal member for Blair Shayne Neumann goes further. He says the centre may be worth billions of dollars to the Ipswich economy. The state government has committed $30m towards its construction.

Adelaide is alive with infrastructure projects, including a desalination plant, a redevelopment of Adelaide Oval and new police headquarters to house 1000 staff.

A $120m upgrade of the former Submarine Corporation shipyard at Osborne sounds of little significance, but it’s huge for Adelaide.

The upgraded ASC facility will be the key construction site in the federal government’s $8 billion air warfare destroyer program.

This project involves the work of 50 companies, subcontractors and suppliers, and represents the biggest defence project undertaken in Australia.

The $3.5bn desalination plant being built on Victoria’s east coast has hundreds of workers on site, and reports suggest this has led to a rise in real estate prices and rents in neighbouring towns such as Wonthaggi.

I see a big future in Newcastle real estate thanks to expanding infrastructure related to resources and power generation. Another scrap of news relevant to investors is the plan announced by the University of Newcastle to become a multi-campus mega university by 2020, increasing its student population by a third to 40,000, making it one of the nation’s top three regional universities.