Paul Castran - CEO - Castran Gilbert

Property investors should start planning right now to take advantage of the next upturn in the property cycle, according to quantity surveying firm Asset Economics.

“Property booms never last but neither do property busts.”

In taking advantage of the next boom, investors need to make sure they’re buying for long-term capital growth remembering to take in account the ripple effect.

As the next property cycle comes around, it‘ll be the most desirable as well as sought-after areas that start growing first, and these are generally the most affluent suburbs too.

From there, capital growth begins its ripple outwards!!

551 Punt Road SOUTH YARRA

Renovated from the ground up, no expense spared, this gorgeous home has been re-stumped and rewired with new double glazing.  It features a stunning gourmet kitchen opening on to a large family room at the rear overlooking a picturesque back garden with entertaining area …accommodation includes three huge double bedrooms plus study (master with ensuite) formal sitting room, all with 12 ft plus ornate Victorian ceilings!

There’s 4 open fire places perfect to share a glass of red, cosy up and fall asleep in front of this winter, stunning new timber floors with brass inlay and ducted heating! 

There’s off street parking for  a number of cars including a car port, as well as a double storey cottage / studio. 

This beautiful home is a truly beautiful example of a timeless triple brick “Victorian” superbly decorated with feature gold leaf!  

You’d think the stars would be aligned wouldn’t you: low rates, a steady population growth, low vacancy rates, strong rental market and a shortage of housing in the majority of capital cities.

Since the latter 2008, the number of loans to first home buyers has outweighed substantially those to existing owner-occupiers and investors as first-time buyers rush to take advantage of the increased government grant. These numbers are set to surge in the next two months after the Prime Minister indicated that the increased grant will end June 30. In previous interest-rate cycles, lending to investors and existing home buyers increased alongside that to first-home buyers.

Partly, the reason is that investors aren’t getting the first-home-owner grant, and when laying your own money down instead of the governments’, you think more carefully before deciding to take the plunge. Unemployment concerns and fears about how the economy will evolve this year are also reasons why investors aren’t yet entering the market.

Consumer sentiment figures released earlier this month by the Westpac-Melbourne Institute Survey found pessimists still outnumbered optimists and, with the prospect of more unemployment, that’s unlikely to change anytime soon.

Interest rates are one of the crucial aspects investors consider. During the past month or so, several of the big banks have increased their fixed mortgage rates, even though variable rates are expected to go even lower!

Banks say it’s due to an increase in the rates in the wholesale market where they access funds. Not everyone accepts that that is the reason, but most acknowledge it’s a signal borrowing costs are near their lowest levels ever!!

Some economists believe fixed rates will continue to rise as banks manage their risk, and it is just a matter of the speed at which it happens. Fixed rates are not popular at the moment even with investors who traditionally used this option.

It shouldn’t be a surprise, given the cash rate is expected to fall to 2 per cent by the end of the year.

But fixed rates are a bit of a barometer of the longer term trend in interest rates, so they’re worth watching. It also pays to remember that just because the Reserve Bank of Australia cuts rates’, that doesn’t mean banks have to follow suit.

Only time can tell, whether or not property buying will be better next year!

The value of our Aussie homes increased in the first quarter of the year, bucking a global trend downwards believe it or not!

House and flat prices in Australia increased in value by 1.6% in the first three months of the year, helped by a scarcity of supply, lower interest rates and incentives to first-home buyers.

The slight recovery in Australia “has primarily been driven by the 40% fall in home loan rates down to 5.7%, which are now at their lowest since July 1968!”

March’s three-month gain follows a 0.1% rise in the three months to February in the              RP Data-Rismark’s national dwelling value index, and a 3% fall in the value of “cap” city homes in 2008.

The strength of Australian housing prices is a world away – well so far - from the 2.7% drop in British home prices over the first quarter, capping a year to March a whopping 17.5% plunge!

US housing didn’t fare too much better, with prices in the top 20 cities sinking 1.9% in February, which brought the 12-month fall to 18.6%, according to the most recent     S&P/Case-Shiller index, a widely followed measure.

RP Data-Rismark said the first-home buyer’s grant, ending on June 30, has acted like a catalyst for new home buying in Australia, but lower interest rates are sustaining the market’s growth.

Increasing rents boosted the housing component of the Consumer Price Index (CPI) by   0.9 per cent for the quarter and the overall annual increase to 5.5 per cent, that’s according to  Australian Bureau of Statistics figures released this week.

The CEO of Real Estate Institute of Australia has said, “The majority of this increase in the housing component was driven by rents, which increased nationally by 1.7 per cent over the quarter and 8.4 per cent over the year. The cities where rents increased the most were Perth and Darwin with annual increases of 10.9 per cent and 13.5 per cent respectively!”

This rent increase in the recent quarter reflects low vacancy rates and the scarcity of rental properties across capital cities, combined with the decrease in building approvals and housing finance for investment.

The National Rental Affordability Scheme should hopefully relieve this figure, however the impact won’t be felt for quite some time.

“With an underlying demand for additional housing at around 200,000 dwellings per year and commencement of new dwellings of 147,000 in 2008, Australia will need to build significantly more homes than what has occurred to meet the rental demand.”

Housing affordability improved since the Reserve Bank rate cuts, although there’s been very little     flow-on benefit to those in the rental market.

“With lower interest rates and greater affordability, now’s the time for those within the rental market to seriously consider purchasing their own home.”

So the rich list has been announced and the top performers for both houses and units were areas of NSW!

RP Data recently released its top price growth suburbs, recording the greatest increase in median house and unit prices during the 12 months to December 2008.

North Sydney suburbs were the standout performers for both houses and units with median house prices appreciating 47.4 per cent in McMahons Point and unit prices growing 49.8 per cent in Greenwich.

The NSW list comprised mainly areas outside of Sydney including Dubbo, Jindabyne, Queanbeyan East and Brunswick Heads.

Victoria was a different story with just one area outside of the metro area making the list. Irymple in Mildura was the regional victor experiencing a median unit price increase of 35.3 per cent.

The Victorian results mainly comprise of areas in the Melbourne Statistical Division with both the top performers – Portsea’s median house price increase was 38.6 per cent to $1,455,000 and Dallas’ median unit priced leaped to $222,500, that’s an increase of 48.3 per cent!!

The QLD market showed many areas outside of the Brisbane area as strong performers in capital growth.

Their state’s top performers are houses in River Heads at Hervey Bay with prices increasing 43.1 per cent and units in North Lakes increasing by 47.3 per cent.

South Australia’s winners are dominated by areas of Adelaide with only Port Hughes, Roseworthy and Owen outside of the capital city location.

The standout performers for houses is Teringie (49.5 per cent) and for units Underdale (47.8 per cent).

The strong growth results around Adelaide aren’t a surprise given that it remains mainland Australia’s most affordable capital city market and has been an excellent performer throughout 2008.

For Tassie, the top performer for houses is Campania, recording a 46.3 per cent growth, and units saw Hobart taking top spot with 35.7 per cent!

Perth dominated the WA list. Which is surprising given the poor performance overall of the Perth market during the last 12 to 18 months.

Homes in Coolbinia stood out, with a median price increase of 43.1 per cent. Units, the port side suburb of South Hedland saw the greatest increase jumping 44.4 per cent to $455,000.

Outside Perth, the list is exclusively populated by areas linked to the mining and resources sector.

Northern Territory winners are almost entirely located within Darwin, with Virginia recording the strongest growth in houses (30.9 per cent) and The Gardens topping the list in units (39.0 per cent).

Throughout ACT, the strongest performing suburbs were within close proximity to the city centre – Franklin’s houses recorded a 25.6 per cent increase and Campbell’s units 49.7 per cent!

Victoria

Houses

Units

Buying properties within 10km of capital cities is generally a good investment, but where ARE these affordable areas …and do they exist?

There’s some suburbs within 5km of capital city centres where the median unit price is $200,000 and the gross rental yield 5.33%?

You don’t have to buy that far from the city centre to pick up a bargain!

And it’s not a bad strategy for identifying best value properties to find ones located in affordable suburbs within a 10 kilometre radius of the city!

For some cities, the inner circle can be more or sometimes less, depending on the size of the city, however, generally it’s a good rule of thumb because it’s these areas that are more likely well serviced by transport, have social and retail amenities close by AND benefit from strong rental demand!

Below are the five most affordable suburbs for houses and units within a 5kay radius of Melbourne City.

Melbourne - houses

Melbourne - units

Sydney will be reinvented as a high-density metropolis serviced by mass-transit subways under a transport blueprint being developed by senior state and federal government bureaucrats.

Powerful new legislation underpinning a proposed metro network costing $13 billion will enable transport and planning officials to reshape the inner suburbs of Sydney, paving the way for apartment towers as high as 15 storeys as well as large-scale retail and office blocks.

To justify the multibillion-dollar investment, tens of thousands more people would have to live and work within walking distance of the proposed Parramatta Road metro stations, according to planning officials behind the overhaul.

Heritage inner-west suburbs such as Glebe, Leichhardt, Rozelle and Camperdown are to be among the first to face radical changes should both the $8.1 billion West Metro underneath Parramatta Road and the $4.8 billion CBD Metro go ahead.

Read the full article here: http://www.domain.com.au/Public/Article.aspx?id=1231003979729&index=NationalIndex&headline=Get%20ready:%20high-rise%20suburbs%20coming

VICTORIAN property values have plummeted about $40 billion in the past six months.

Melbourne’s median house price of $450,000 mid-2008 is now down to $427,500, according to estimates.

And house price expectations across Australia have sunk to an all-time low, a new report says.

Victoria’s $800 billion residential property market has dropped 5 per cent - or $40 billion - overall since July, according to BIS Shrapnel calculations prepared for the Herald Sun.

The trend has opened the door for potential borrowers desperate for cheaper housing.

The latest Mortgage and Finance Association of Australia/BankWest Home Finance Index shows almost two in three Victorians expect the value of their biggest asset to erode in the first three months of this year.

"The expected decline in prices will help address the chronic problem of housing being unaffordable for a lot of Australians, and first-time buyers are likely to be enticed back into the market," MFAA chief Phil Naylor said.

Recent Real Estate Institute of Victoria sales results show the volatile economic climate is producing winners and losers.

Read the full article here:

http://www.news.com.au/heraldsun/story/0,21985,24881569-5013926,00.html