Archive for the ‘Property Investment’ Category

For Adelaide to become a more vibrant and sustainable city, we need to stop the urban sprawl.

Did you know that Adelaide covers the same area as London? The major difference being that London has a population of 7 Million whilst Adelaide has a population of just 1 Million.

So what does this mean for our kids…

Gone are the days that we condemn our kids to migrating to the outer suburbs, to find the cheapest block of land, or house & land package that they can afford to purchase as a first homeowner.  And in the process condemn them to owning two vehicles to commute to work and raise a family to commute to school and leasure.

At last we have a sustainable plan for Adelaide, which provides us with a direction on population and how our city will grow.

Watch this Youtube Video about Adelaide’s 30 Year Plan…

So how does the 30 Year Greater Adelaide Plan change the future for our kids… 

The first step is what is happening now with our $2 Billion Public Transport Infrastructure Upgrade.

This investment is all about improving our public transport with modern new electrified passenger trains, trams and modern buses which integrate into our train and tram network. The next step once our public transport network is upgraded, is to encourage urban consolidation along our major public transport corridors, which means we will lessen our reliance on vehicles as our sole form of transport.

How will the 30 Year Greater Adelaide Plan encourage urban consolidation?

The 30 Year Greater Adelaide Plan, announce the intention of our Government to encourage higher density housing along our major publice transport routes by relaxing Council Planning policies 800 metres either side of major public transport routes.

So if I was a Property Investor… where should I purchase property for future growth?

Obviosly 800 metres either side of the major established train and tram lines!

This story was brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Specialists.

The South Australian property market continues to go from strength to strength on the back of investor demand.

Watch this Youtube Video about Adelaide…

Kevin Magee, CEO, Raine & Horne South Australia, explained, “There is very good economic confidence among investors about the local and interstate economies. As a result our offices are fielding plenty of interstate and international enquiries – particularly from Chinese investors.”

According to the Raine & Horne SA chief, the relative affordability and stability of Adelaide’s housing prices is the cornerstone of buyer demand. “The median house price in Adelaide is still around $380,000, which typically buys a three-bedroom, two-bathroom house within 30km of the city,” said Mr Magee. “Move to within 15km of the city and in many areas $380,000 will still buy a home with three bedrooms and one bathroom.”

Mr Magee added, “The Adelaide property market has recorded just 7 falls in quarterly price growth since March 2000. Each time it’s only been a small percentage fall and it’s quickly recovered the following quarter.”

Mr Magee nominates Hope Valley as a suburban property hot spot. “Hope Valley offers first time buyers and investors quality properties on large blocks within 15km of the CBD at a rate well below the median price. In addition the area is seeing a revival with many buyers subdividing or demolishing old properties to build their ‘dream homes.’ These are exactly the type of factors that drive future price growth and lead to good long term capital return. It’s not surprising to see this area has achieved average annual median price growth of 12% for the last nine years. To find out more about the property market in Adelaide’s north east, contact Raine & Horne North East on 08 8395 2233 .

Gawler is the gateway to the Barossa Valley and is attracting those buyers looking for a lifestyle change or a home with a country town feel. “There is a nice mix of housing – from heritage, to very modern properties and cafes in Gawler,” explained Mr Magee. “Gawler is somewhere where people can choose to live in a rural country town, but still work in the northern part of Adelaide at Technology Park or Edinburgh. For more on Gawler, contact Raine & Horne Gawler on 08 8522 2777.

It’s famous for tuna fishing, but Mr Magee says Port Lincoln is attracting home buyer attention. In fact, Raine & Horne Port Lincoln’s Steve Prout recently sold six brand new townhouses off the plan to interstate investors within a week. “And they were sold sight unseen,” said Mr Magee.
Port Lincoln is a day’s drive from Adelaide, but it’s an area that is moving ahead in leaps and bounds, and investors are well aware the town is a designated area for people returning from jobs in the Iron Triangle region.

“When workers with young families leave the mining towns, they tend to prefer coastal towns such as Port Lincoln, Whyalla or Kangaroo Island to a suburb in Adelaide,” explained Mr Magee. “The coastal towns provide the intoxicating mix of a country lifestyle and good schooling.”

This article is brought to you by Raine & Horne Glenelg, your Glenelg Property Management and Glenelg Real Estate Specialists.

When searching for an investment property, don’t fall into the trap of asking “Would I live there?”

Watch this Youtube Video about which picking suburb you should buy in…

Don’t be like most Property Investors… often your tastes in a property can be very different from a tenant’s needs and likes within a particular area.

SOME KEY FACTORS THAT YOU SHOULD FOCUS ON WHEN CONSIDERING THE PURCHASE OF AN INVESTMENT PROPERTY ARE:

• Are the rents affordable within the average to medium price range?
• Has the area shown a solid history of steady rental demand from nearby industry, educational, medical or commercial office workers?
• Does the area provide good access to shops, transport, schools, churches, sporting and other facilities in keeping with the profile of the local population?

If you can answer yes to the above then you are on course to making a sound investment decision.

 This article was brought to you by Raine & Horne Glenelg your Glenelg Real Estate and Glenelg Property Management Experts.

Oh… to have a property crystal ball so we could see into the future of the property market.

See comments from John Symonds of Aussie Home Loans 0n why the RBA raised interest rates…

It is a hot topic with many property owners and investors – whether to fix their mortgage or leave it as a variable rate.

While we are not financial advisors and strongly recommend that you seek independent advice on the best options for your circumstance, we do, however, suggest that you consider splitting your loan/s to edge a two-way bet of fixed and variable.

Now is the time to look at all of your finance options to ensure that you are maximising your return and getting the best possible loan.  One quick call to your bank or financial advisor could save you $10,000+ in interest payments.

If you need to get an independent opinion of what your home is worth today in Glenelg or the western and coastal suburbs of Adelaide, call Monika on 83768844, you’ll receive a written letter of appraisal with a detailed comparative market analysis  of properties sold in your suburb in the past 6 months.

If you would like us to also arrange to give you finance options just mention that also when you call.

 This article was brought to you by Raine & Horne Glenelg your Glenelg Real Estate and Glenelg Property Management Experts.

Australia’s rapidly growing population and overseas migration is set to underpin the Australian property market in 2010 according to Angus Raine, CEO, Raine & Horne.

“Building approvals levels are currently running around 145,000 per year according to industry averages, which is well short of the new homes required to meet our rapidly growing population.” According to the Australian Bureau of Statistics (ABS), as at 30 June 2009, Australia’s population had grown to 21,875,000, an increase of 443,000 people over the previous year.

Watch this Youtube Video about Australia’s population growth…

“Other factors that will continue to help Australian property avoid the pitfalls faced in the US and the UK include our preference for smaller household sizes and larger homes,” says Mr Raine.

According to figures from the ABS, the typical size of a new Australian home is 215 square metres, up 10 per cent on the last decade. New homes in other parts of the world are far smaller, with Denmark the biggest in Europe at 137 square metres and Britain the smallest at 76 square metres.

Higher lending standards and Australia’s relatively low mortgage interest rates are also set to push up Australian property prices – a recent statement from CommSec, says home owners should expect prices to rise by eight to 10 per cent over 2010.

“It’s fair to expect more interest rate hikes in 2010 on the back of our robust economy. However higher rates will be offset by population growth and the fact there is not enough homes being built to meet demand,” says Mr Raine. “This is set to push up rents and home prices, which is an attractive combination for investors.”

To support Mr Raine’s optimism for Australian property, a Mortgage Choice survey found that more than one third of Australians plan to buy a property in the next two years despite concerns over higher living costs and rising interest rates.

Shane, Oliver, Head of Investment Strategy and Chief Economist, AMP Capital Investors says more increases in Australian interest rates are likely in the year ahead as the RBA seeks to move rates towards normal levels. The normal level is now judged, to be around 5%.

“However, the process of tightening is likely to remain gradual thanks to falling underlying inflation and lingering uncertainties about growth. The cash rate is unlikely to reach 5% until around the end of 2010,” explains Dr Oliver.

The other gorilla in the room for property growth is jobs. However the ANZ job advertisement series rose 5.2 per cent in November compared to the previous month.

Mr Raine sums up, “If employers are able to hire full time staff they will and I know the Raine & Horne group is on the lookout for the best property talent available to meet the expected bounce in the market in 2010.

“The fact full-time employment is back in fashion is a great confidence booster for the economy and Australian real estate for 2010.”

This article is brought to you by Monika Bonet. Monika is the Principal of Raine & Horne Glenelg, your Glenelg Real Estate Agent and Glenelg Property Manager.

Read the latest comments from Angus Raine CEO of Raine & Horne about the hike in interest rates…

The decision by the Reserve Bank of Australia (RBA) to increase the official cash rate by 25 basis points proved the major talking point for the property market in October.

The increase pushes the central bank’s cash rate to 3.25 per cent and the RBA governor Glenn Stevens said the increase was as a result of Australia’s continuing growth.

Raine & Horne CEO Angus Raine says the increase was the market’s worst kept secret, given the regular snippets of more favourable economic news coupled with the fact interest rates remain at historic low levels.

Nevertheless with the financial markets pricing in more rate rises by Christmas, the Raine & Horne chief is not convinced home owners can stomach more increases, especially as the Federal Government is also phasing out the First Home Owners Grant Boost (FHOB).

To this end, the Real Estate Institute of Australia says when a similar stimulus package was phased out in July 2002, the presence of first home buyers in the market fell by around 38% from 13,000 to 8,000 per month.

See what John Symonds of Aussie Homes has to say…

However Mr Angus Raine remains cautiously optimistic for the property market despite the challenges. “After an interest rate hike, people usually go back to the drawing board and work out what they can afford. There’s usually a time lag of a few weeks and then they’ll go out hunting again.”

REIA President David Airey is squarely in Mr Raine’s camp, and says caution is required regarding further decisions on rates.

“While the economic indicators suggest that Australia is on the way to recovering from the impact of the global financial crisis, these are early and tentative signs and we should be wary not to slow economic growth by increasing interest rates prematurely,” said Mr Airey.

PriceFinder Chief Operating Officer Kent Lardner, says, most home buyers need to be aware of inter­est rate movements, and urges them to allow for a servicing buffer for loan repayments of up to 3%.

 “The rise in interest rates is a positive sign of a strengthening economy. From PriceFinder’s perspective, our biggest concern over the last 12 months has been jobs losses and the effect that could have on property markets.”

 “The good news on the job front to-date will continue to help buyer confidence and even with the expected interest rate rises in the coming 12 months, our rates will still be relatively low,” adds Mr Lardner.

This article was republished from Raine & Horne Terraine October 2009.

Watch this Youtube Video about how Raine & Horne Glenelg can help you with all of your investment needs…

Monika Bonet is the Principal of Raine & Horne Glenelg, your Glenelg Real Estate Agent and Property Management expert.

RP Data – Rismark Home Value Index Release

National property values jumped by almost 2 per cent in August in the largest monthly movement since the RP Data-Rismark Home Value Indices began in January 2005. 

Using the rpdata.com (ASX: RPX) property database, which is Australia’s largest and includes over 170,000 sales during the first eight months of 2009, Australia’s housing recovery solidified during the month of August with strong capital gains registered across the country despite evidence of fading first home buyer numbers.

According to the “market-leading” RP Data-Rismark National Home Value Index (see Background on p4), home values in Australia rose by an exceptional 1.9 per cent during the month of August. This brings cumulative capital growth in the first eight months of 2009 to a better than expected 7.9 per cent. This is also the single highest monthly index result since the RP Data-Rismark National Home Value Index began in January 2005.

According to rpdata.com research director, Tim Lawless, the August results surprised on the upside and are indicative of very high levels of buyer confidence combined with low levels of listings.

“These buoyant conditions sit in striking contrast to the same time last year when values were falling, less than half of the auctions held cleared and sales volumes were at rock bottom.  We are now seeing home values rising at a solid rate, almost 80 per cent of auctions are clearing, and sales volumes have bounced back significantly”, Mr Lawless said.

Rismark International managing director, Christopher Joye, added, “Australia’s housing market is being underpinned by the strongest population growth since 1971, record housing shortages, historically low mortgage rates, better than expected employment outcomes, and one of the world’s most profitable banking systems.”

Australian home values have now risen 3.8 per cent past their February 2008 peak. This rebound followed peak-to-trough falls in national home values of just 3.8 per cent in 2008, which compares exceptionally well with the 15 per cent and 30 per cent house price declines seen in the UK and US, respectively.

Dispelling concerns that the recovery is limited to first home buyers Mr Joye commented, “In contrast to claims that this is a first time buyer bubble, the cheapest 20 per cent of suburbs in Australia have actually under performed both the mid-priced market and Australia’s 20 per cent most expensive suburbs since the housing market bottomed in December 2008.”

“As recently noted by the RBA, all major lenders now require a minimum 10 per cent deposit and are applying the strictest credit standards we’ve seen in over a decade. Australian housing credit growth has also been running at levels that are extremely low by historical standards and noticeably less than the growth experienced in the 1991 recession,” Mr Joye said.

Rpdata.com’s Tim Lawless concurred with Mr Joye and said that over the last three months the premium residential market increased in value by 4.5 per cent compared with a 3.4 per cent gain in the middle market and a 2.8 per cent improvement at the cheapest end. (Note: numbers in chart  to right show changes since December 2008 in the cheap, middle market, and expensive suburbs.)

“Despite the strong gains, the bounce in the premium sector has not been enough to offset the peak to trough fall of 9.9 per cent between February 2008 and January 2009.  Prices in Australia’s most expensive markets are still 1.1 per cent lower than at their peak.”

Mr Joye added, “While the resounding recovery in Australia’s housing market confirms our forecasts, we expect medium term growth rates to be more measured as mortgage rates normalise back to between 7-8 per cent. This would bring the cost of housing finance back in line with its 2000-01 levels, which is notably well below the searing 9.6% highs endured by borrowers in August 2008 care of the RBA.”

In closing Tim Lawless said that the upward momentum in Australian house prices is a critical economic signal from the market to builders and developers to encourage them to reinvest in producing new housing supply. This was a message reinforced by the RBA’s Dr Anthony Richards in a speech to CEDA yesterday: policymakers need to facilitate significant new investment in housing supply to alleviate Australia’s growing housing shortage, which ANZ and Westpac estimate has risen to around 200,000 homes.

“This price growth will also go a long way to comforting risk-averse lenders to start providing credit again to developers, which has been one of the main bottlenecks on the supply-side. And it will stimulate the reallocation of resources away from other sectors of the economy into much-needed housing investment.” Mr Lawless said.

Other key findings from the August RP Data-Rismark Index results:

Unit values (+2.1 percent) have marginally outperformed house values (+1.8 percent) in the month of August. Over the course of 2009, units (+8.5 percent) have also generated slightly higher capital growth than houses (+7.7 percent).

Most capital cities recorded robust gains in the month of August with every single city experiencing rises in home values during the first eight months of 2009.    

After several years of subdued growth following the end of Australia’s last housing boom in 2003, which saw Australia’s “house price-to-income ratio” fall by nearly 20 percent through to December 2008, home values in the two major capital cities, Melbourne and Sydney, have led the recovery in 2009 with total capital gains of 11.6 per  cent and 8.6 per  cent, respectively.

Following Melbourne, Darwin has been the next best performing capital city with growth of 9.7 per  cent in 2009. Interestingly, Darwin also continues to deliver the highest rental yields, implying that the market may have room for further growth.

Home values in Canberra (+6.7 percent), Brisbane (+5.2 percent), Perth (+4.1 percent) and Adelaide (+3.1 percent) have also realised sustained gains in 2009.

As RP Data-Rismark correctly anticipated, residential real estate in Perth has experienced a recovery in 2009 after a period of falling prices since September 2007. While Perth dwellings have recorded 4.1 percent growth in the first eight months of the year they still remain 3.6 per  cent below their September 2007 peak.

National rental yields have softened slightly given the strong capital growth with the gross annualised rental yield for units being 5.1 percent while house rental yields are slightly lower at 4.3 percent.

This article republished from RP Data -- Rismark

Watch this Youtube Video about how Raine & Horne Glenelg can help you with all of your investment needs…

Monika Bonet is the Principal of Raine & Horne Glenelg, your Glenelg Real Estate Agent and Property Management expert.

Accelerate and increase your retirement fund!

Building an investment portfolio can be easy if you have equity in your current investment property…

Often you will not have to pay any costs or outlay any money to purchase an additional property, as this can be built into your investment loan using your current investment property as security.

Do you know if you have equity in your property? 

Contact our office today for an obligation FREE market appraisal.  You could be surprised at just how easy it is to acquire your next investment property.

Call Monika on 8376 8844 NOW!