Property Sauce AU

The best places to invest in property in 2014

noreply@blogger.com (Unknown) — Fri, 06 Jun 2014 05:02:00 +0000

http://thenewdaily.com.au/money/2014/01/07/taking-property-plunge/#./?&_suid=140203080698805029205680323766

Resource-rich Hunter investment property hotspot

noreply@blogger.com (Unknown) — Wed, 16 Jan 2013 06:33:00 +0000

Newcastle and the Hunter Valley have been identified among the nation's top regions for property investment, by a panel of industry experts.

http://www.abc.net.au/news/2013-01-16/resource-rich-hunter-investment-property-hotspot/4466720

Property Investment & You

noreply@blogger.com (Unknown) — Tue, 04 Dec 2012 05:31:00 +0000

Free ebook

http://data.axmag.com/data/201212/U86490_F174897/index.html

PDF Version

https://docs.google.com/file/d/0B4wHw9de8qoXakd1Ujd6LTJDcGM/edit

Perth and Brisbane heading into property market upswing: Louis Christopher

noreply@blogger.com (Unknown) — Tue, 09 Oct 2012 05:56:00 +0000

By Larry Schlesinger
Tuesday, 09 October 2012

The capital cities of Australia’s resource states are leading the property market recovery, according SQM Research managing director Louis Christopher.

Christopher places Perth houses and units at 6.30 on the property clock, indicating the market has just bottomed out and heading into an upswing, and Brisbane houses and units at six o’clock, indicating the market has bottomed out.

His assessment of the Perth market is based on falling listings and a tightening rental market.

Perth house and unit prices have also stopped falling, says Christopher.

In its September stock-on-market report, SQM found that Perth online residential listings declined by 3% to 17,517. Year-on-year they are down 14.6%, the biggest decline of the mainland capital cities (excluding the much smaller Darwin market).

SQM also found that the Perth vacancy rate tightened from an already very low 0.7% in July to 0.6% in August, with just 1,177 properties available for rent (compard with more than 2,600 in Adelaide and nearly 12,000 in Melbourne). Apart from Darwin (0.5%), Perth has the tightest rental market in Australia.

This tightening vacancy rate resulted in median house rents increasing by $10 to $450 per week over the August quarter, with weekly rents for units, apartments and villas rising by $20 to $430 per week, according to the latest REIWA data.

Christopher says Brisbane has bottomed out due to falling listings volumes and house prices no longer falling.

According to SQM Research, Brisbane online residential listings are down 8% year-on-year to September, with the vacancy rate at a tight 1.5%

Investors looking to get into the Sydney market at the bottom of its cycle may have missed out, according to Christopher.

Christopher has Sydney houses at seven o’clock on the property clock, with units slightly further ahead at 7.30, indicating houses are well on their way to rebounding.

In both the case of houses and units listings are falling with SQM recording 2.9% fall in Sydney listings in September to be down 13.1% year-on-year to 30,408 properties for sale.

In both house and unit markets he says evidence of a recovery can be seen in rising Sydney auction clearance rates, which was 63% over the weekend.

However, Sydney houses are not making a homogenous recovery, with prestige houses stuck at four o’clock, according to Christopher, indicating they still have some way to fall.

Sydney units are slight further ahead of houses in the property cycle due to the introduction of the $15,000 first-home buyer handout, which applies to new homes, including apartments, marketed off the plan.

The Melbourne property market (houses and units) is assessed as having some way to go before bottoming out – at five o’clock on the property clock.

“Melbourne listings are still elevated and are not falling," says Christopher.

“There is some evidence of a rise in clearance rates, but no real evidence of a rise on prices, he says.

SQM has Melbourne online residential listings up 3.2% year-on-year to September to 51,564 properties listed for sale.

Adelaide and Canberra are assessed as flat property markets and at the same point in the property cycle as Melbourne (five o’clock).

In the case of Adelaide, Christopher says that “listings are still elevated, yet they are no longer rising at rapid rate.

“There is no evidence yet of increased buyer demand and prices are flat.”

In Canberra, apart from listings remaining high and prices flat, Christopher says the “outlook is uncertain due to the federal budget”.

Darwin is assessed as the only capital city market that has already rebounded (at nine o’clock) and heading towards it its peak.

“There has been a strong lift in Darwin house and unit prices starting in the first half of this year.

“Stock levels are falling rapidly. The rental market very tight,” he says.

Original Article:

tinyurl.com/8tx4vqj

noreply@blogger.com (Unknown) — Wed, 04 Jul 2012 00:15:00 +0000

Sydney property squeeze drives Hunter’s boom time

BEN SMEE

25 Jun, 2012 04:00 AM

HUNTER property prices are set to boom, according to a report that predicts a 17 per cent increase in the next three years.The study, by business research agency BIS Shrapnel, predicted the greater Newcastle housing market would be boosted by the ‘‘inward migration’’ of people fleeing the Sydney squeeze.
It comes less than a month after Residex, a property information firm that collates data on real estate markets throughout Australia, listed 17 Hunter suburbs as among the best for capital growth in NSW.
The author of the latest study, Angie Zigomanis, told the Newcastle Herald a tight rental market, an undersupply of housing and a strong local economy propped up by the resources boom would ensure positive returns for homeowners and investors.
Mr Zigomanis said the market was ready to kick back into life, after a boom in the early part of the 2000s followed by four or five years of modest growth.
‘‘Prices probably overshot the mark [in the early 2000s] and we witnessed a period of catching up,’’ Mr Zigomanis said.
‘‘It may well be that lower interest rates have become a trigger for bringing people back into the market.’’
The Herald reported on Saturday that Hunter-based lenders the Greater Building Society, Hunter United Credit Union and the Newcastle Permanent Building Society had all recorded significant increases to their home loan portfolios in the past year.
Mr Zigomanis said Newcastle was a better place to invest than similar-sized areas such as the Gold Coast, where there was an oversupply of housing.
The report also predicted that Sydneysiders squeezed out of an increasingly unaffordable market would look to Newcastle and Wollongong, where prices were lower.
BIS Shrapnel predicts the median house price in Sydney will be $750,000 by 2015, and the report says new dwelling construction in the city is well below the level required by population growth.
‘‘As the deficiency of dwellings in the Sydney market increases, and affordability deteriorates due to a combination of rising prices and higher interest rates, [Newcastle and Wollongong] are likely to benefit from a higher inward migration of residents from the state capital,’’ the report said.

Original Article: http://www.theherald.com.au/news/local/news/general/sydney-property-squeeze-drives-hunters-boom-time/2601049.aspx

noreply@blogger.com (Unknown) — Thu, 12 Apr 2012 03:25:00 +0000

HOTSPOTS: A PHENOMENON WITHOUT FOUNDATION

Barely a day goes by without some report unveiling a new investment hotspot, a top ten hotspot list or some other variation of the hotspot phenomenon in an attempt to lure investors in a new direction. Despite this media fascination, the hotspot concept is fundamentally flawed and in some cases can even be dangerous for investors. When we evaluate an investment opportunity to recommend to investors, an area hotspot status does not even scratch the surface of the level of due diligence required. There are a whole range of other factors at play that, if not considered, may not only impact the success of an investment property significantly but can also make an investment in a hotspot suburb a recipe for disaster. Many so-called experts nominate hotspots based purely on past performance, taking into account price growth over a specified period and assuming the trend will continue. Regardless of the motivation of such experts, the simple fact is that location, while important, is not the only factor that influences the success of an investment property. There is no guarantee price growth in the past will be replicated in the future. Similarly, there is no guarantee projected future growth based on a particular circumstance will deliver the anticipated results. Consider the case of Ravensthorpe in Western Australia, a frequent inclusion on hotspot lists several years ago. BHP Billiton opened a $2.2 billion nickel operation in Ravensthorpe, attracting large numbers of investors looking to capitalise on the major uplift in residential demand, only to unexpectedly close the mine eight months later. Ravensthorpe population immediately slumped, prices followed suit and investors were left reeling as rental returns plummeted. This example is typical of the danger associated with investing in single commodity mining towns. It also demonstrates the negligence of an investment strategy based purely on location. What about factors including projected employment in the area, the quality and track record of the developer, the level of current and future infrastructure spending, and the propensity for neighbouring high density development that will directly impact competition for tenants and, eventually, buyers? There are many criteria that must be considered to ensure genuine security for an investment. A decision should never be made based on a postcode alone. There are many examples of good and bad investments within the same suburb, sometimes merely streets apart. One of our former sites, deNode Apartments in Surry Hills, is a prime example. You won't find Surry Hills on many hotspot lists. Indeed, an analysis of price and rental growth in Surry Hills in recent times is unspectacular. However, the deNode development has delivered an annualised return since May 2009 of nearly 29%, outperforming the Surry Hills average by over 20% and dwarfing the performance of most investment hotspots nationally in the process. Aside from its location in the more desirable part of Surry Hills, deNode benefits from a lack of competing development, high rise restrictions in the area, intelligent contemporary design and convenient access to infrastructure and amenities designed to appeal to the emerging tenant demographic of the area. One of the underlying problems with the fascination with hotspots is that the median figures for a given area that the so-called experts refer to when developing their hotspot lists. In doing so, a plethora of other influential factors are effectively ignored.

Article by Aviate Group, Level 4, 50 Stanley Street, East Sydney NSW 2010

noreply@blogger.com (Unknown) — Fri, 20 Jan 2012 01:40:00 +0000

TOP 10 TIPS FOR BUYING AN INVESTMENT PROPERTY

It’s never a wrong time to buy property if you know what to look for and how to find it.

1. Leave your emotion at the door
Buying an investment property requires a different mindset to buying a home to live in. Start your property search with a clear head. “Investment property decisions should be made from a logical point of view, not an emotional one.”

2. Location Location Location
Don’t be afraid to look outside your own suburb. Property Sauce at the moment favours regional areas such as the Hunter and Newcastle that offer good amenities for tenants and are close to public transport.

3. Avoid oversupply
When looking at potential investment properties, take into consideration other local factors that could impact on your rental and capital growth. Are there many similar properties close by? Are properties about to come onto the market that could cause a glut and drive the price of your property down? “You want to mitigate against the risk of oversupply.”

4. Buy new
Buying new has the advantage of giving buyers time to research a development and learn more about a potential investment. Check out the developer, architect and builder. In certain States, buying new can offer stamp duty reductions. There is the added tax advantage of depreciation and maintenance should be lower than an older property

5. The right amenities
Retail strips and shopping centres can be attractive amenities if your property is within a comfortable walking distance of up to 700m. The same applies for train stations, hospitals and schools. Being too close to amenities can start to impact negatively on a property as noise and traffic considerations come into play.

6. Give your potential Tenants what they want.
Make sure any investment property will suit your target rental market.

7. Budget
Develop an Investment property buying budget and find out what kind of property is right for you. While it’s important to be clear about your investment objective, be it for capital growth or sustainable yield reasons, it’s also crucial to know where you stand in terms of borrowing capacity and investment readiness.

8.Get a good lender
Investors with a clear idea of their property preference as well as a strong relationship with a mortgage broker or a bank have the best chance of success. Property Sauce can introduce you to the right brokers.

9. Understand supply and demand
Vacancy rates are low and there are no signs of this improving in the short-term, so investors can continue to expect low vacancy rates and increasing rental yields.

10. Take advice from experts
When it comes to property, everyone has an opinion. But it may pay to take advice from experts in the field, the people that have worked in the industry over the long term and have a strong track record, and believe residential property is suited to a long term investment strategy

Give Property Sauce a call on 02 95717650

Investment Property Research

noreply@blogger.com (Unknown) — Mon, 19 Dec 2011 02:08:00 +0000

Real Estate Agent

Ever needed to know how to find a good rental agent for a given area?

Go to www.realestate.com.au and check out all the listings for a suburb. Take notes on which office/agent is renting each property. The agent with the most listings is the one you want to go with, as this is indicative that they are receiving a large amount of business and have a strong rental roll. It’s important to look at the exact location of your property, as agents will often specialize in specific pockets of a suburb.

Market Research

There’s no better resource for overview ‘state of the market‘ data than Residex.com.au.
We use data from Residex because they compare ‘like for like’. That is, they separate apartments from houses and this stops results from being skewed. They also have the strongest and most robust methods of calculation in the market.

We incorporate RP Data in our training as they are able to provide the most comprehensive and accurate data on Australian residential property, on a suburb by suburb level basis. Want to see what your property, street or suburb is worth? They offer excellent free suburb profiles and other reports here http://www.rpdata.com/index.html

SQM Research does a fantastic job providing data on vacancy rates.They are responsible for the vacancy rate information that is provided in the popular real estate investment magazines ‘Australian Property Investor‘ and ‘Your Investment Property‘. Their free vacancy rate information by the suburb is here. http://www.sqmresearch.com.au/vacancy.php?t=1

Borrowing Capacity

To estimate your borrowing power through the banks use this tool.

http://www.banks.com.au/tools/calculator/borrowing-power

Quick Tip: Every bank has slightly differing criteria when evaluating lending capacity. How much you qualify for with one institution may not be the same with another. Before selecting a financial provider, do your research and apply to several lenders to ensure you are borrowing at the highest capacity you are able to.

Capital Gains Tax Calculation

To calculate tax payable you will add the capital gain amount to your income and put it into the ATO Tax Calculator. http://alturl.com/2poit

Quick Tip: When selling your Investment Properties, it is prudent to first speak to an Accountant to properly plan this event. As laws change regularly, it sometimes pays to get up to date advice on how to legally minimize tax payable.

Stamp Duty Calculation

realestate.com.au have built an excellent tool for calculating stamp duty costs, that is available for free use online. The calculator is easy to use and allows you to select a state, so it will take into account the differing state laws pertaining to stamp duty. To use the stamp duty calculator click here.

http://www.rs.realestate.com.au/cgi-bin/rsearch?a=calc&jar=StampDuty

Why you should look at The Hunter NSW for Investment Property

noreply@blogger.com (Unknown) — Thu, 15 Dec 2011 00:05:00 +0000

Property Sauce Property Investment in Australia

View more presentations from Property Sauce Australia

For as little as $60 per week you too can invest in property

noreply@blogger.com (Unknown) — Tue, 06 Dec 2011 06:28:00 +0000

That's as little as the cost of a sandwich and drink...$8.60 per day!

Investing in property is a simple strategy which allows you to take advantage of negative gearing reimbursements so you ultimately end up paying only 12% of the cost of the property, while the ATO and your tenants pay 88%.

So, why isn't everybody doing this?

People don't realise just how affordable investing in property can be!!

People don't know how to get a deposit.

People don't know which kind of property to purchase.

People just don't get started.

Manufacturing drives Hunter jobs surge

noreply@blogger.com (Unknown) — Mon, 28 Nov 2011 01:56:00 +0000

A JOBS boom bucking an industry trend has confirmed the Hunter as Australia’s premier manufacturing region.
Figures show 53,000 people lost their jobs in the manufacturing sector throughout Australia in the 12 months to September 2011.

In the same period, trend data showed 4000 Hunter workers gained employment in the manufacturing workforce, which is the second-largest employer in the region behind healthcare.

In the Hunter, 11.1per cent of the workforce is employed in manufacturing compared with 8.9per cent across Australia and it has an unemployment rate (2.8per cent) that is almost half of the national average (5.3per cent).

The Hunter Business Chamber – sourcing information from the Hunter Valley Research Foundation, Australian Bureau of Statistics and elsewhere – has outlined the jobs surge in its submission to the state government’s Manufacturing Industry Action Plan.

‘‘The Hunter has long held the reputation as the powerhouse of the NSW economy and ranks highly as one of the most valued, diverse and resilient regions in Australia,’’ chamber president Richard Anicich said.

‘‘This perfect storm for manufacturing has been brewing for a considerable period of time and those within the industry have been working hard to alert governments at all levels.’’

Tomago Aluminium and Hydro Kurri Kurri are the largest manufacturers in the Hunter and combine to produce 30per cent of Australia’s aluminium.

Work on defence projects has been the driving force behind the dramatic increase, with Forgacs adding 600 employees to its 1000-strong workforce in the past two years.

Forgacs is building the majority of the blocks for three air warfare destroyers and mining and government transport jobs have also contributed.

‘‘If you have a look at what’s happening in Newcastle at the moment it’s what keeps me buoyant about the place,’’ Forgacs general manager Tony Lobb said.

‘‘While ever the mining industry keeps going at the pace it is then manufacturing will continue to grow, but it’s the other projects that have made such a big difference.’’

Newcastle Trades Hall Council secretary Gary Kennedy said the likelihood of the Joint Strike Fighter contract coming to Newcastle would only add to the Hunter’s reputation.

‘‘After the BHP closed, instead of sitting around on their hands and doing nothing, Newcastle businesses diversified and moved forward with a lot of innovation,’’ Mr Kennedy said.

By NEIL GOFFET

26 Nov, 2011 04:00 AM

Original article: http://www.theherald.com.au/news/local/news/general/manufacturing-drives-hunter-jobs-surge/2371358.aspx?src=email

Property now preferred over shares and cash

noreply@blogger.com (Unknown) — Thu, 10 Nov 2011 02:12:00 +0000

Self-directed share investors turned off by the high volatility of the stockmarket are increasingly turning to property investment, according to the InvestSMART Funds Flow Survey.

The survey results revealed that property was stretches ahead of cash and shares as a preferred investment option. On average, of the 1540 respondents surveyed, property holdings were increased by 37 per cent between 2009 and 2011, while in the same period share holdings were decreased by 18.5 per cent, and cash holdings were decreased by 35 per cent.
Also between 2009 and 2011 respondents increased fixed interest investments by 85 per cent.
The cautious behaviour of investors is what’s driving this change into safer asset classes such as property, said InvestSMART general manager Ron Hodge.
“The Australian sharemarket has been buffeted by global market turbulence in recent times. What started out as a year of cautious optimism was soon quashed by bad news out of Europe with its sovereign debt crisis, China with its inflation concerns and the US suffering lower than expected growth,” he said.
The survey results reveal that the current investment pattern isn’t about to change with 23 per cent indicating they would continue working with their current cautious investment strategy.
“Cautious portfolio weightings will once again be the flavour of 2012; this will continue until there’s sustained low volatility in sharemarkets in many of the de-leveraging economies across Europe and America,” said Hodge.

Original Article Source: http://www.apimagazine.com.au/api-online/news/2011/11/property-now-preferred-over-shares-and-cash

House prices fall slightly in best result in seven months: RP Data-Rismark

noreply@blogger.com (Unknown) — Tue, 08 Nov 2011 00:31:00 +0000

Capital city house prices fell just 0.2% in September to $450,000, their best result in seven months, suggesting the housing market may have turned the corner, according to the latest RP Data-Rismark Hedonic Home Value Index.

This was the smallest decline since February 2011 and reversed a trend of accelerating capital losses since the end of March 2011. Over the first nine months of 2011, capital city home values have now declined by 3.6% while over the 12 months to September 30, capital city home values were off by 3.4%.

Despite the fall in values, houses have delivered total returns of 0.7% for the year to date and 0.9% over the last 12 months.

Read the complete article http://alturl.com/mkoiy

Having your cake and eating it too - Cash Flow and Capital Growth

noreply@blogger.com (Unknown) — Wed, 02 Nov 2011 02:39:00 +0000

Having your cake and eating it too - Cash Flow and Capital Growth The whole point of buying property as an investment is to see an increase to the value of the asset, and the greatest possible income from that asset during the time that the investor owns it. You couldn’t imagine anyone wanting to buy property that doesn’t grow well and has a low rental yield! The whole point of buying property as an investment is to see an increase to the value of the asset, and the greatest possible income from that asset during the time that the investor own
But some investors do believe that they cannot have both cash flow and growth at the same time. Some ‘experts’ have created this misconception by continuing to validate the theory that a property can only have one of these characteristics, either cash flow or growth.

This is simply not true. Throughout her new book, Investing in the Right Property Now!, http://majorstreet.com.au/investing-in-the-right-property-now/
Margaret Lomas shows you that while some property has good growth with low yields, and others have good yields with low growth, the best property is that which has both! Further, buying property which has both is not only highly possible, but such property always exists somewhere, regardless of the present state of the economy.

As an investor, your goal must be to ensure that each property you purchase provides the best possible growth, for the best possible rental yield, during the period that you own it. You want your purchase to have its best performance – its greatest period of growth and most attractive rental yield – when you need it most. Some high income-earners seek growth first then yield later, for others it is the reverse. Margaret takes an in-depth look at both cash flow and growth, and explains how to choose property that gives you what you really need from your property investing.

Original Link

http://majorstreet.com.au/53/investing-in-the-right-proeprty-now/

Borrowers win Cup day rate cut

noreply@blogger.com (Unknown) — Tue, 01 Nov 2011 21:55:00 +0000

The Reserve Bank of Australia (RBA) has cut interest rates for the first time since April 2009, handing borrowers a win on Melbourne Cup Day.

The central bank eased the official cash rate by 25 basis points, down to 4.5 per cent.
Westpac and Commonwealth Bank were the first of the major banks to pass on the full 25-basis point cut to borrowers on Tuesday afternoon.
NAB and ANZ both said they were reviewing their rates following the decision.
Prime Minister Julia Gillard says all banks should match the RBA's reduction.
"Australian banks should pass on this interest rate cut in full," Ms Gillard said.

Read more:

http://www.abc.net.au/news/2011-11-01/rba-rates-decision/3612652?section=business

Our Melbourne Cup tip is Lucas Cranach

noreply@blogger.com (Unknown) — Mon, 31 Oct 2011 22:56:00 +0000

Since being purchased from Germany earlier this year, Lucas Cranach has evolved into one of the best Melbourne Cup 2011 hopes of the year.
The five-year-old entire finished an eye catching fifth last start in the $2.5 million Caulfield Cup last start, running home for fifth despite being posted wide on the turn.
Lucas Cranach finished just three lengths off the winner, Southern Speed, despite suffering from a well-documented hoof injury at the time.
With his cracked heel completely recovered and having gained extra fitness from his Caulfield Cup run, Lucas Cranach looms as the possible winner of the Melbourne Cup 2011.

What your budget will buy in our capital cities

noreply@blogger.com (Unknown) — Sun, 30 Oct 2011 19:46:00 +0000

IF you're in the market for a new property, here's our guide of what your budget - large or small - can buy.

$400,000

Well-equipped three-bedroom house close to the Penrith CBD in Sydney's west

Three-bedroom post war house with fenced yard in Zilmere, 14km from Brisbane's CBD

One-bedroom unit on first floor of Art Deco building in Melbourne's beachside Elwood

$650,000

One-bedroom unit in Sydney's "Paddington Barracks", featuring timber floors throughout

Double-storey house with five bedrooms and swimming pool in Brisbane's Jindalee

Centrally located two-bedroom unit with Melbourne skyline views and elevated north-west aspect

$1000 000

First-floor two-bedroom unit in a boutique Petersham development, close to Sydney's CBD

Neat and tidy two-bedroom workers cottage with enclosed sunroom in Brisbane's Highgate Hill

Three-bedroom house with updated kitchen and polished boards in Melbourne's Moonee Ponds

The National Rental Affordability Scheme (NRAS)

noreply@blogger.com (Unknown) — Fri, 28 Oct 2011 19:32:00 +0000

The National Rental Affordability Scheme (NRAS) is a long term commitment by the Australian Government to invest in affordable rental housing.

The Scheme seeks to address the shortage of affordable rental housing by offering financial incentives to the business sector and community organisations to build and rent dwellings to low and moderate income households at a rate that is at least 20 per cent below the prevailing market rates. NRAS aims to:

increase the supply of new affordable rental housing;
reduce rental costs for low and moderate income households; and
encourage large scale investment and innovative delivery of affordable housing.

The Australian Government is committed to stimulate the construction of 50,000 high quality homes and apartments, providing affordable private rental properties for Australians and their families.

Source: http://www.environment.gov.au/housing/nras/index.html

Fact Sheet: http://www.environment.gov.au/housing/nras/publications/factsheet-national-rental-incentive.html

noreply@blogger.com (Unknown) — Thu, 27 Oct 2011 20:17:00 +0000

Time to punt on a rate cut for Melbourne Cup day?

noreply@blogger.com (Unknown) — Wed, 26 Oct 2011 22:33:00 +0000

It’s what all investors want to hear – the latest inflation figures leaves the path clear for an immediate rate cut, according to the Housing Industry Association (HIA). If that’s the case, rates would drop next Tuesday, just in time for Melbourne Cup day.

Senior economist Andrew Harvey says the consumer price index for the September 2011 quarter confirms the Reserve Bank of Australia (RBA) has been judging monetary policy on the basis of overstated inflation figures.

“Revised consumer price index methodology by the Australian Bureau of Statistics means that in effect, the RBA has been recently targeting an inflation rate of 1.75 to 2.75 per cent, rather than its stated rate of two to three per cent. This raises fresh questions over the RBA’s retention of a tightening bias over much of 2011, but more importantly it leaves the RBA with plenty of space to cut rates by the end of this year,”

Harvey says. “The change of recent estimates of underlying inflation is not an inconsequential issue – what’s arguably the most important macroeconomic tool in the economy, monetary policy, has been managed on the basis of data that’s well short of the mark. It adds weight to the industry’s long-held view that interest rates were taken too high.”
Commsec’s economist Savanth Sebastian shares a similar opinion, reporting the annual rate of inflation has fallen from 3.6 per cent to 3.5 per cent.“The RBA can certainly rest easy on the inflation front,” Sebastian says.However, punting on a rate cut on Melbourne Cup day doesn’t mean a guaranteed win just yet, he warns.“It’s always important to remember that the RBA sets interest rates by looking forward, not backwards.

While inflation is now comfortable, in recent times policy officials have highlighted that financial conditions have already eased somewhat since the start of the year, with the slide in market interest rates and the Aussie dollar providing a marginal degree of stimulus. So it’s by no means assured that the RBA will definitely cut rates next week.

“What is clear is that domestic inflation will not stand in the way of a rate cut, however the focus now shifts to Europe. If the European summit is unable to provide a definitive solution to the sovereign debt crisis, then it’s looking likely the RBA will move to shore up confidence and provide stimulus by cutting rates by 25 basis points on Melbourne Cup day.

Original Article Link: http://alturl.com/7yjxf

Family home proves the best investment over past 24 years

noreply@blogger.com (Unknown) — Wed, 26 Oct 2011 05:07:00 +0000

IT'S official - your home is the best investment you are likely to have made. In the constant debate over shares versus property, bricks and mortar have won out.

The ANZ review has found the family home has been the highest returning asset over the past 24 years, taking costs, taxes and gearing into account.Owner-occupied housing outperformed investment property (which still beat shares) largely because of its exemption from capital gains tax.
The findings follow a study by RMIT, which also found property has generated better returns than the sharemarket over the past 20 years.Before property spruikers get too excited, however, ANZ predicts the stockmarket will outperform bricks and mortar over the next decade.
Even here, though, the bank points out that when the risks associated with each investment are taken into account, the difference between shares and property is likely to be small.
The report, Australian Property Research Asset Returns: Past, Present and Future, looked at a range of data from 1987 - the earliest date when all the required information was available - to 2011. It also factored in a range of costs.For homeowners this included assuming maintenance costs - rates, insurance and general repairs - were 1.2 per cent of the property's value. Maintenance costs for investment property were calculated at 1.8 per cent of the dwelling's value, covering advertising and property management fees. Stamp duty was applied across the board at 5 per cent. To keep the analysis consistent, cash flow such as rent from investment property or dividends from shares was placed in a term deposit account.
When all the numbers were crunched, owner-occupied housing was found to have generated an annual return of 12 per cent. Investment property 9.6 per cent, stocks 8.9 per cent, government bonds 4.8 per cent, commercial property 4.2 per cent and term deposits 3.7 per cent.
"Owning your own home has been the best investment you could have made by a mile," ANZ property research head Paul Braddick said.
"Even when costs and taxes were factored in, owner-occupied housing generated higher returns at a lower risk than equities." Mr Braddick says that a $100,000 investment in your home in 1987 would be worth $1.428 million today.A similar sum sunk into an investment property would be worth $810,000. Past performance, however, is no guide to future returns.
Looking forward, the ANZ expects the ASX 200 to outperform all property over the next 10 years.
Equities are forecast to return an average of 7.8 per cent a year, commercial property 5.6 per cent, owner-occupied property 5.2 per cent, investment property 4.5 per cent, term deposits 2.8 per cent and government bonds 2.6 per cent.
The report assumes capital growth in housing will be 5 per cent over the decade, rental yields will average 3 per cent and there will be no major shifts in interest rates.
The good news for property owners is that when the ANZ factored in the risk associated with each investment, they all came out roughly on par.
"Looking over the next decade we are basically saying that risk-adjusted, these assets are pretty much in the same band," Mr Braddick said. "Without risk both commercial property and equities are expected to have higher nominal returns over owner-occupied or investor property. Take risk into account and there is very little difference."

Next 12 months will see first homebuyers strike

noreply@blogger.com (Unknown) — Tue, 25 Oct 2011 22:27:00 +0000

Over the next 12 months 48 per cent of first homebuyers intend to strike on their first property, according to a recent RAMS Home Loans survey.
Of the 300 surveyed first homebuyers aged between 20 and 49, almost half are still motivated to buy in the next year, despite the global turmoil happening in Europe and the United States of America.
RAMS chief executive officer Melos Sulicich said property ownership is still high on the agenda, particularly for younger Australians. This determination is breeding savvier, better prepared buyers who are making more considered decisions than before, said Sulicich.“First time buyers are often well informed after consulting a mix of family, friends and professionals,” he said.

Original Article Link: http://goo.gl/dgDOk

Australian Housing Market Overview - October 2011

noreply@blogger.com (Unknown) — Mon, 24 Oct 2011 05:03:00 +0000

Follow this link to get the latest Australian Market Update from RP Data

http://www.youtube.com/watch?v=1xZyhoQEIiI&feature=share

Flat property market a misconception:

noreply@blogger.com (Unknown) — Mon, 24 Oct 2011 04:49:00 +0000

Speculation that the Australian property market is currently flat is a myth, according to a leading property market commentator. Speaking to The Adviser, Destiny Financial Solutions’ Margaret Lomas said while some markets are sluggish, others are booming, indicating that the property market is far from flat.
“When people say the market is flat, they are presuming that we only have one property market and that is just not true,” she said.
“We have thousands of property markets all over Australia and even in the past couple of years many of those have been very vibrant and have been growing very well.
“Yes some markets are tracking sideways, but some markets are not and a property investor that wants to be successful needs to understand that.”
Ms Lomas said there is currently a vast number of good buying opportunities in Australia, including the outer suburbs of Adelaide, which are thriving and providing investors with plenty of bang for their buck.
“Some areas in Queensland are also starting to perform well and these will be the areas to watch moving forward,” she said.

Original Article:

http://www.theadviser.com.au/breaking-news/6182-flat-property-market-a-misconception-lomas

House prices dip across Sydney's city

noreply@blogger.com (Unknown) — Sun, 23 Oct 2011 21:57:00 +0000

SYDNEY'S median house price has slumped $30,000 to $580,000 after a year of sluggish sales.
Having peaked at $610,000 just 10 months ago, figures compiled for The Sunday Telegraph by RP Data show the Sydney market has lost its shine by about five per cent.

Although prices in pockets of Sydney's west and northwest are rising steadily, the poorly performing $1.5 million-plus market dragged the overall median down.The northwest was the most popular region for people looking for a new home, with four of the top 10 suburbs with the most sales: Castle Hill, Baulkham Hills, Quakers Hill and Kellyville.

Despite falling prices in most areas, Real Estate Institute of NSW president Wayne Stewart said it wasn't all doom and gloom."The housing market from $400,000 to $600,000 is very strong," Mr Stewart said."Prices are going up in that sector, which means first-home buyers are out in force again especially, thanks to the stamp duty concessions that last until the end of the year."Investors are out because they love snapping up affordable properties near employment hubs and transport."
Poor sales in the upper end of the market above $1.5 million have also driven down the median over the past year."The top end of the marketplace is still being shot to pieces," Mr Stewart said.

Property analyst Louis Christopher from SQM Research said the fall was on par with forecasts earlier this year."The Sydney housing market remains largely in the doldrums," he said."That said it's not rapidly falling and we don't expect any major price drops for Sydney houses."

Seven interest rate rises, between October 2009 and November 2010, with rising house prices until mid last year contributed to the current slump, said Australian Property Monitor's senior economist Dr Andrew Wilson. But Sydney's housing market was still holding up better than all other capital cities. "That's because Sydney has a shortage of housing and people have to live somewhere," Dr Wilson said. While Blacktown topped the list of most sales of any Sydney suburb in the past year with 447 transactions, the burgeoning northwest is where most people want to live.Castle Hill in the northwest clocked 440 sales, followed by Baulkham Hills (370), Quakers Hill (334) and Kellyville (312).

The popularity of the northwest, which is out of reach for most first-home buyers, meant Sydney's urban evolution was being driven by second-home buyers upgrading to better properties, Dr Wilson said."The aspirational buyers you would expect to be looking at the inner-ring regions such as the lower north shore and inner west of Sydney are moving here," Dr Wilson said."They want that suburban lifestyle with a very different nature to what a crowded inner ring suburb offers."

Original Article: http://www.dailytelegraph.com.au/property/house-prices-dip-across-sydneys-city/story-e6frezt0-1226173941557