HTW Property Review Jul 2014

“Lazy Half Million – 2014” is the Theme of this month’s HTW Month in Review. Every year in July HTW take a hypothetical half million dollars and ask our (HTW) offices to give their advice on where investors should be looking to spend it.

2014 has been an interesting year in a number of centres where price movement have been dramatic – in both directions.

This month’s issue provides a very informative snapshot of the market and how it has tracked over the past 12 months, while also opening a few windows on future growth.

HTW  take a look at how the market stacks up in your locality and compare it against others from around Australia

 

Summary opinion on the Melbourne residential market.

– With record low interest rate, it may appear to be a good time for investors and first home buyers to break into the property market.

– Melbourne dwelling value surged by 2.1% in the March quarter, with a marked increase of 8.6% compared to the same quarter in 2013.

– Housing affordability is now the hot issue as incomes fail to keep pace with the growth in property prices.

– Most of the inner suburbs have a median house price over $500,000.

– Local public and private infrastructure is one of the most important determinants of property value.

– Bundoora and Epping are 16 kilometres and 22 kilometres north of the CBD respectively.

– Bundoora is home to RMIT and La Trobe university campuses whereas Epping house the campus of NMIT.

– A strong demand for housing  is expected in both suburbs in the coming years owing to the increase in private and government developments.

– Bundoora currently generates an annual growth of 6.5% and a rental yield of 3.5%; whereas the annual growth and rental yield for Epping are 6% and 4.8% respectively.

– Both suburbs offer promising future capital growth and rental yield owing to the expected population growth in the City of Whittlesea and their convenient location as well as infrastructures.

– Western Melbourne suburbs such as Footscray and Maidstone both experienced a capital growth of 4.7% in 2013 with a weekly median advertised rent of $380 and $350 respectively

– It is expected that the western suburbs housing price will continue to experience a moderate growth in the short to medium term.

 

Thanks to Therese O’Neill from Alphabroker and if you don’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.

 

Also if you would like a copy of this report please email me at admin@theloanoperator.com.au and i will gladly on forward.

RBA Keeps Rates On Hold

On Tuesday, the Reserve Bank of Australia announced that it is keeping the official cash rate on hold. At its monthly Board meeting, the RBA decided it was appropriate to keep the cash rate at 2.50 per cent.

 

The next meeting of the RBA Board will be held on August 5, 2014.

HTW Property Review June 2014

Herron Todd White’s summary on the Melbourne residential market.

 

– The overall Melbourne residential market has steadily increased over the first half of 2014.

– Auction numbers have been high with nearly 3,000 auctions held in April 2014, higher than the historic ten year average of 2,510 for April, while March was a record- breaking month in terms of auctions with 4,750.

– A further 3,700 auctions are scheduled for May pointing to market optimism amongst vendors.

– Clearance rates so far in May have been steady averaging 70%, which is an increase from 68% in April which endured both the Anzac Day and Easter long weekends, and also marks a return to similar levels recorded in March and February with 71% and 70% respectively.

– Stable clearance rates have reinforced the good demand in the overall market with the median house price growing at 5.4% on average across metropolitan Melbourne during the first four months of 2014.

– A high volume of sales transactions have been recorded in the $500,000 to $800,000 price point, especially in suburbs such as Bentleigh East in the middle south-east, Thornbury in the middle north, and Yarraville in the inner west.

– While optimism and demand have remained quite stable in the overall market both buyers and sellers should remain cautious of the apartment- dominated markets of Melbourne CBD, Docklands, and Southbank.

– While the housing market has seen an overall 5.4% increase in prices, the apartment market has experienced just a 0.9% increase in 2014.

– The alarm bells are highlighted by Docklands recording a 43% clearance rate from only seven auctions in 2014, with a further 370 properties currently on the market by private sale.

– Between 2009 and 2013 off the plan apartment releases in the CBD increased by a staggering 103% from 7,000 to more than 14,000, in the same time first home buyers have gradually left the market with Melbourne currently experiencing its lowest number of first home buyers in 23 years.

– However, sales recorded over the three months to May 2014 have totalled $510.9 million, an increase from the $126.8 million recorded to February 2014 and also an increase on the $166.8 million recorded to November 2013.

 

If you don’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

HTW Property Review Feb 2014

Commentary On Melbourne Property Market Feb 2014

 

– Now that the federal election is behind us and mixed views loom on the up or down movement of current historically low interest rates, the expectation overall is that there will be moderate growth across the inner and outer suburbs of Melbourne.
– The later months of 2013 demonstrated market recovery and increase in buyer confidence with  a median house price increase of 9% for the September quarter
– However the unemployment rate has not improved and with the high Australian dollar, buyer confidence is questionable as pressure is placed on the manufacturing industry within Victoria. Therefore we can expect growth to be moderate throughout this year.
– The prestige market within the inner city, inner east and bayside area over the years has been susceptible to volatile price movements. However as a result of continued economic growth, the median house price for 2013 increased 15%.
– While growth is expected in the suburban housing sector unfortunately the same cannot be said of the inner city apartments
– With numerous developments recently completed or due for completion this year, we will see an oversupply of apartments within the inner city with key areas being Docklands, Southbank and the CBD. The oversupply of apartments in these areas will see pressure being added to the rental market with the knock on effect of reduced prices.
– The same can be said for Melbourne’s developing outer urban fringe suburbs such as Truganina and Tarneit which could expect a decline in property prices as the newly developed areas face over supply of housing stock with developers offering incentives to purchasers
– Growth will remain steady as a result of continuing low interest rates contributing to the affordability for existing mortgage borrowers as well as private investors who benefit from the tax incentives

 

If you don’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

HTW Property Review May 2014

HTW Commentary On Melbourne Property May 2014

 

– With interest rates at record lows and property prices in many regions beginning to increase, now may be the perfect time for first home buyers to enter the market.
– Suburbs such as Werribee, Deer Park and Cranbourne are fast becoming a mecca for first home buyers and young families due to the affordability of these suburbs.
– However there may be an oversupply of new house-and-land packages in the western suburbs, which could intensify given the recent job losses in the surrounding area.
– Investors on the other hand are seeking properties with different characteristics than those of first home buyers such as proximity to public transport, infrastructure and strong rental demand. Investors therefore are interested in different suburbs.
– Many investors are seeking out properties in established suburbs such as Bayside’s Highett, where they can manufacture equity by renovating an existing dwelling.
– Both domestic investors and first home buyers are steering clear of the CBD, as international purchasers from countries such as China, Malaysia and Singapore are paying premiums for off the plan inner city apartments.
– The oversupply of certain properties has resulted in Melbourne now having the softest rental yields of any of the capital cities.
– In order to overcome the affordability issue, first home buyers have been using various strategies in order to enter the property market.
– A popular method at the moment is to purchase a property and then lease it out.
– The rent helps cover the mortgage and the owner can take advantage of tax savings through negative gearing.
– Another way of easing the financial burden of a property is to purchase it with someone else, such as a parent, sibling or partner.
– This assists with another income helping meet monthly repayments and can also avoid incurring extra bank fees.
– When parents or family help out when gathering a deposit, Lenders Mortgage Insurance (LMI) potentially can be avoided, by insuring your loan-to-value (LVR) is below 80%, thereby save you thousands of dollars.

If you don’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