““Safe as”…Strong fundamentals from around the nation”

Here are some highlights:

– Property is generally considered to be one of the safest forms of investment.

– This is due to a number of fundamental reasons common to all residential property markets.

– First off the property market can be very forgiving when compared to other forms of investment such as shares.

– Over time the rising tide of the property market will cover up flaws in the initial purchase.

– Furthermore you can mitigate a lot of the risks of property investing through insurance, such as landlord and building insurance.

– Although property is susceptible to macroeconomic influences, it differs to that of the share market in that you are in direct control of your investment. – Property allows you to have control and make decisions such as renovations, which will directly affect your return on investment.

– Along with these fundamental factors there are also influences that are unique to certain areas in Melbourne that make some regions a safer investment choice than others.

– For example there has been a strong café culture in recent years, which only seems to be getting stronger.

– Properties purchased within walking distance of these amenities (some would say necessities), would not only benefit on sale day but also experience greater rental demand.

– This has been evident in areas such as Footscray and Brunswick, both of which have a strong café culture and have been gentrified in the past few years. – Investors looking for a safe option may want to stay clear of Melbourne’s central business district.

– Overseas investment has led to an increase in demand for new apartments.

– In turn developers have flooded the market and in some areas supply will be greater than demand.

– Apartments provide investors with a lower entry price point compared to houses and can deliver a better yield.

– Look for apartments that are close to Melbourne’s metro system as public transport is becoming increasingly important.

– Boutique developments of fewer than fifty apartments may fare better both in terms of capital growth and vacancy rates as there is less competition.

– Home owners have a different mindset to that of investors and therefore owner-occupiers generally have a different set of search criteria.

– A safe purchase would be located in proximity to infrastructure such as shopping, schools and parks.

– Regardless of the property type it will be a safer investment if it is also backed by underlying positive location characteristics.

– This is especially true for properties in an area that has features that cannot be replicated or manufactured elsewhere.

– Melbourne’s property market is extremely complicated and diverse.

 

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 Therese at Alphabroker

“Warning bell! What not to buy”  is the Theme of this month’s HTW Month in Review.

 

– After experiencing the cycle boom in the middle of 2012, property markets in Australia’s major cities have been booming.

– A new record median house price of $658,000 was achieved by the end of June and the inner Melbourne median price exceeded the million-dollar level at $1,027,500.

– Because of low interest rates and strong investment, it is expected that the Melbourne residential market will continue to grow in the future despite at a slower rate.

– This characteristic of strong market performance can also be identified by a strong auction market this year with an average clearance rate of 74%.

– Some middle ring Melbourne suburbs such as Ashwood and Vermont South have seen stronger market performance with the clearance rate hitting 95%

– Melbourne’s outer suburbs are still the best performance for long-term capital growth, particularly the north and south-east parts of Melbourne.

– In comparison, Docklands was the worst performer followed by South Yarra, Carlton, South Bank and East Melbourne, which have shown lower levels of price increase over the past ten years.

– The talk of an overpriced market has caused buyers to part with their money cautiously and with the property market booming, buyers are more worried about a property bubble and the possibility of significant price drops in the future.

– Harry Dent, an American economist and demographer, judged that the Melbourne property market was highly overpriced as the house prices in Melbourne have reached almost ten times income levels. – However, this opinion has been criticised by many local analysts and economists.

– Though it is difficult to determine whether the property market is overpriced, it has sparked fears of oversupply of new apartments in certain areas, such as the City of Melbourne.

– Around 3,000 apartments have been built in the Melbourne Council area in 2014 and another 3,000 units are planned to be completed by the end of this year. – This trend is expected to last for at least a few years into the future, mainly within Docklands, Southbank, South Yarra, Carlton and the CBD.

– However, it seems that investors do not pay enough attention to the potential disaster of oversupply as almost 50 developments are currently seeking planning permission from the local council. – Offshore investors contribute to more than 40% of residential developments in the city.

– At the same time, poor quality apartments with design flaws account for 55% of the city’s tallest apartment buildings according to a Melbourne City Council study.

– This has generated the current situation of almost 20% of house and unit losses on re-sale in the Melbourne Council area.

 

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