HTW Month In Review Nov 2015

Highlights For The Melbourne Property Market This Month

– Investors are very active in Melbourne’s eastern suburbs, in particular Overseas Buyers in Glen Waverley. Typically due to Glen Waverley Secondary College’s academic reputation among the local and Chinese communities and the practicality of being near a major transport hub and shopping centre.
– Melbourne CBD town planners have approved the construction of over 20,000 apartments within the next 4 years compared to approximately 5,500 in Sydney’s inner city over the same future period
– The Melbourne unit market remains strong for Investors and the residential investment market is predicted to become stronger and is only at the early stages of growth
– Despite this, the RBA has concerns and HTW view the risk of a downturn in the Melbourne unit market as high with the potential problem of an oversupply of units within the CBD and inner city areas
– The mid-south eastern and Bayside regions appear to be attractive for investors who are fairly active and purchasing detached houses, townhouses, units and apartments
– The outer south east regions appear to be mainly attractive to first home buyers and families with
medium household income. Investors are much less active in these regions
Thanks to team Alphabroker www.alphabroker.com.au

HTW Month In Review October 2015

HTW’s Theme for the month for  October – Smokin’ hot price points….

Here are some of the highlights from the REVIEW

Lower entry level (Melton) Melton is approximately 35 kilometres west of the Melbourne Central Business District (CBD) and is serviced by a train line that runs to and from the CBD. The suburb is experiencing a significant demand for affordable entry level housing which has driven some growth. Affordability for first home buyers, young families and couples and the attractive record low interest rates are the main drivers in the area for sales of new land and house and land packages by developers.

Melton city’s population growth rate is predicted to be the second fastest growing in Victoria. Demographic research shows that the area is dominated by young families with over 70% of residents being aged less than 45 years old.

In the foreseeable future, Melton’s residential property market is expected to experience growth. This growth appears to be driven by an increase in the area’s population of potential buyers that priced out of the inner suburban Melbourne market and the low interest rates.

According recent Real Estate Institute of Victoria research, the median house price within Melton was $255,000 in June 2015. Below demonstrates a capital gain made possible due to a market movement.

164 Coburns Road, Melton 3-bedroom, 1-bathroom, 112 square metre floor area (no improvements between sale dates). Sold 13 June 2015 for $260,000 Sold 3 April 2014 for $215,000.

Ringwood is an established metropolitan suburb approximately 24 kilometres east of the Melbourne CBD. It consists of a mixture of established residential dwellings on traditional sized residential allotments generally built during the 1950s, 1960s and 1970s. We note that in more recent times, low and medium density unit development is taking place, particularly on the larger allotments and those close to Ringwood central. The area is well serviced by schools, shopping, parks, sports fields, walkways, arterial road access and public transport. The suburb is generally considered to be a mid socio-economic area. A feature of the suburb is the Eastland Regional Shopping Centre and close proximity to Eastlink providing direct access to the Melbourne CBD. The $700,000 to $1 million price sector seems to be running hottest in the Ringwood market for housing at the moment.

Below are some examples of what you can secure in Ringwood within different price brackets. Less than $500,000 will secure a single level conventional style dated brick 1- or 2-bedroom, 1-bathroom unit. $600,000 to $650,000 will secure a single level conventional style circa 1970 albeit fully renovated brick or weatherboard 2- to 3-bedroom, 1-bathroom dwelling on circa 600 to 800 square metres of land. (For example, recent sales include 14 Glencairn Avenue, Ringwood for $600,000 and 3 Margaret Street, Ringwood for $625,000.) Circa $700,000 will secure a single level conventional style original, unrenovated brick or weatherboard 2- or 3-bedroom, 1-bathroom dwelling on circa 700 square metres of land near Eastland Regional Shopping Centre. (For example, 11 Prospect Court, Ringwood sold for $737,000.)

Around $800,000 will secure a two-storey conventional style 1970s albeit fully renovated brick or weatherboard 4-bedroom, 2-bathroom dwelling on circa 590 square metres of land near Eastland Regional Shopping Centre (for example, 16 Prospect Court, Ringwood sold for $810,000).

There are a few factors driving these markets and price points at the moment including:

– Substantial upgrade in nearby infrastructure (i.e. Eastlink, Eastland Regional Shopping Centre, Ringwood Train Station and Bus Terminal);

– Historically low interest rate environment;

– Melbourne’s increasing population; – Substantial foreign investment/purchasing;

– Competition from potential purchasers priced out of adjoining suburbs.

Demand for property in Ringwood can be expected to cause an increase in overall property values for surrounding suburbs in the outer eastern housing market as property prices have increased substantially and buyers are pushed further out.

It is unknown whether the strong performance in Ringwood and its immediate surrounding areas will be sustainable over the coming year.

Recently in the city of Boroondara, new neighbourhood residential zoning has been introduced in accordance with the Neighbourhood Character Study undertaken by the Council. The new zoning restricts subdivision to land over 500 square metres (or 300 metres for NRZ2) and allows a maximum of two dwellings on a lot. The new zoning also restricts the maximum height for dwellings to eight metres.

Median house prices in Balwyn have risen 33% in the past five years due to high demand from foreign investors and also the desire to be in the popular Balwyn High School zone (Source: CoreLogic RP Data). The main price drivers in Balwyn, Balwyn North and Canterbury are:

– School zones, especially Balwyn High School zone

– Close to a number of public transport options

– Chinese and other foreign investors. The Victorian State Revenue Office introduced a 3% duty payable by foreign investors which came into effect on 1 July 2015. The duty has had no discernible impact on foreign investment.

– Record low interest rates

– Affluenza

The future of house prices in Balwyn appears to be unsustainable. Limited supply has resulted in overpriced housing and foreign investment will be curbed in the future, which could cause the market to stall. In the foreseeable future, the Balwyn, Balwyn North and Canterbury prestige residential markets however look likely to remain heated for the next 12 months.

If you haven’t already, you can subscribe to receive this report directly each month for FREE! Simply jump on the HTW website www.htw.com.au and follow the prompts. Thanks to alphabroker www.alphabroker.com.au

5 Common Traits of people with bad money habits

EmptyPocketsImage Source: Uni Campus Rec

Are you ready to examine your spending habits to see if they are harming you financial well-being?

Remember, you can fool other people most of time, but do you really want to fool yourself?  Do you lie awake at night worrying about how you can afford to pay your debts? If you fall in the category of the people described below, you should seriously consider how to change your spending habits.

Using credit cards to pay for expenses when you don’t have the money to pay off the card

Credit cards are such a convenient and easy way to purchase things you want. Do you use your card to make purchases even when you know you don’t have enough money in the bank to make the payment at the end of the month?

Unless you are sure that you can pay of the credit in full at the end of the month, don’t use it. Wait to make your purchase when you have the money in the bank.

Roland Bleyer of Credit World warns about commonly held myths about credit cards.

“Credit card holders will often charge a lot of money on their cards and then take their time paying it off under the false assumption that doing so helps their credit score. According to this logic, as long as the user stays within their spending limit, they are not doing any harm. Unfortunately, the opposite is true” Roland founded Credit World in 2005.

Not keeping track of your budget.

Assuming that you have made a budget, this is a total waste of time if you do not track your expenses against it. If you regularly spend in excess of your budget, you have either not been honest with yourself when you made the budget, or if you have, you need to adjust your spending to keep to it. Certified Financial Planner Jeff Rose advises; “When the month is over, categorize and add up your expenses. Many people overspend on the following categories: 

– Groceries 

– Clothing 

– Entertainment 

– Eating Out

These are categories you should monitor carefully.

Once you know how much you’re spending in your categories, make a few goals. Try lowering how much you’re allowed to spend in your problem categories incrementally, month by month.” Jeff is the CEO of Alliance Wealth Management.

Spending more than you want to earn reward points

Don’t get sucked into buying things you don’t really need just so that you can earn reward points. In this day and age almost every department store and supermarket has its own reward card system. Have you given any thought to how this financed? Are you in fact spending more to cover the costs of the reward you hope to earn? If you don’t need it, don’t buy it.

Leslie Tayne of Tayne Law Group P.C. warns;

“Provided they’re used responsibly, rewards credit cards can be an awesome thing. However, if you find yourself using a credit card just so you can rack up more points, you might be in for a world of trouble. This can be incredibly problematic if you’re trying to follow a strict budget or struggle to keep yourself from splurging on frivolous purchases.” Leslie is a business debt-related attorney and advisor.

Buying on impulse

If you are trying to get ahead with saving for a special purchase then always have a shopping list with you when you go shopping.  TV is constantly bombarding us with special super duper deals that you absolutely must have. Resist the temptation to buy on impulse and only buy what you need.

Using one credit card to pay off another

This is also known as robbing Peter to pay Paul and is a seriously bad habit. I am not referring to transferring all your debt on a high interest card to a low interest card. This can in fact help in the short term, provided that you pay it all out within the specified time. I am referring to using your normal Visa card, for example to pay out a normal Mastercard. You are merely fooling yourself it you believe that this solves any problems. Remember, the more cards you have, the easier it will be to run up serious debt.

Authors Bio

Barney Delcarmen is a freelance writer for CreditCard.com.au and successful businessman in his own right; drawing on his personal experience in life and in business he shares his insights into personal finance and money management.

CoreLogic RP Data observations over the last three months to August 2015

Best performing capital city: Melbourne +8.0%
Weakest performing capital city: Darwin -3.2%
Highest gross rental yields: Darwin houses at 5.5% and Darwin & Hobart Units at 5.5%
Lowest gross rental yields: Melbourne houses at 3.0% and Melbourne & Sydney units at 4.1%
Most expensive city: Sydney, with a median dwelling price of $773,000
Most affordable city: Hobart, with a median dwelling price of $320,000

HTW Month In Review Septemeber 2015

ATTACHED HOUSING THROUGHOUT THE NATION!

‘Oh give me land lots of land!’ is a war cry for the previous millennium. Our great Australian dream has always revolved around bricks, mortar and freehold dirt all wrapped up on one title, and with our name firmly stamped across the deed.

Here are some of the highlights

– There will be a plentiful supply of apartments in the CBD and inner suburbs in the next few years.

– It is estimated that there will be 160,000 established contemporary apartments in the market by 2018, a, 43% increase compared to 112,000 apartments in 2015.

– Some of the upcoming standout developments include Far East Consortium’s West Side Place, featuring Ritz Carlton Hotel and approximately 2,600 residential apartments over four towers, which neighbours its sister Upper West Side development.

– In April 2015, the green light was also given to three high-rise developments delivering 1,958 apartments in Fishermans Bend. The off the plan sales in the CBD are strongly underpinned by foreign purchasers. 95% of 941 apartments within the proposed 92-storey skyscraper known as Aurora located in the heart of the city were sold in a fortnight.

– Approximately 75% of the buyers are from South-East Asia and China. EQ Tower, another 63-storey skyscraper on A’Beckett Street, was sold out within eight months. The development will comprise 633 apartments on completion in June 2017. There is a growing concern of oversupply in the market. It was recorded that 1,518 new apartments settled in the CBD over the past 12 months to May 2015 (City Scope, 2015).

– Demand will need to remain strong in order to match the large influx of new apartments over the short to medium term. Inner city apartments that are established or are not being sold off the plan, can generally be purchased at a lower price than a new apartment.

– The recent resale of new apartments evidenced that many of the new apartments, even being sold in brand new condition, are struggling to achieve their original off the plan purchase price.

– Attached housing has been growing rapidly within Melbourne. South Yarra is an inner city premium suburb and has a median house price of $1,662,500 (detached housing) (REIV.COM.AU). According to experts, the high demand suburb has been rated as one of Melbourne’s most liveable suburbs with some of the most popular shopping and dining precincts.

– The area has experienced a large influx of new midto high density residential and mixed use attached housing developments which have influenced the area and market previously known for single dwelling housing or low-set small density unit buildings.

– The most attractive type of attached housing available within the area is the boutique residential apartment developments with high end finishes. In relation to attached housing, the area is strongly characterised by mid to high density unit developments, therefore creating a strong demand for townhouses which are considered unique within the area and are extremely competitive at auction.

– The suburb itself is experiencing large population growth and the space within South Yarra is becoming limited for further developments. As seen from the results of the television show The Block, the threestorey townhouse market is strong and unique for the suburb of South Yarra driving the townhouse market up.

– The best opportunity for attached housing is townhouse living, but with limited supply and high competition, the smaller unique, low density developments would be the next best option. The outer eastern suburbs are generally popular among first and second home buyers with families.

– There has also been a noticeable rise in market activity from foreign purchasers. Both builders and developers are active in the marketplace, with an increased focus on purchasing potential redevelopment sites. This has led to a noticeable increase in townhouse unit development in these areas. In 2015, the outer eastern suburbs are still considered to offer value for money which makes these areas attractive and affordable for first home buyers, families and investors alike.

– The Yarra Ranges area and Melbourne’s south eastern area have seen a significant rise in townhouse development within the past decade. Prior to this period the area was characterised by single level detached brick veneer and weatherboard dwellings on a quarter acre block (864 square metres). Today it is a mixture of new attached housing, detached townhouse and backyard development and the conventional 1950s single level dwelling which remain highly attractive to the development market for potential subdivision opportunities. Larger vacant land allotments have also seen considerable interest from local development and investment companies operating within the area.

If you haven’t already, you can subscribe to receive this report directly each month for FREE! Simply jump on the HTW website www.htw.com.au  and follow the prompts.

Thanks to Alphabroker for the summary