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What does apartment living look like in 2019?

For most Australians who live in an apartment, the experience is pretty similar across the board.

You come home to your building, which is hopefully in decent repair and well presented – although perhaps a little old-fashioned.

You go through a small, unassuming foyer and climb the stairs up to your apartment. The apartment itself has been renovated a bit since it was first built, but it’s still got an outdated layout; that boxed-in kitchen which isn’t very convenient for entertaining or watching the kids while you put on dinner. Windows that could be bigger to bring in more light and views.

If it’s a newer building, you may have a lift, an open-plan layout, and hopefully, an ensuite for the master bedroom. If you’re lucky, you might even have a pool or a gym in the basement. However, neither of these are likely nice enough to allow you to quit your gym membership any time soon.

But despite all this, you love living in your apartment, because it’s so close to buses, trains, shops, restaurants, bars or your work. You barely use your car, you don’t have to do any gardening or worry about any maintenance.

It’s also much more affordable than living in a house on the same street or in the same suburb.

78% growth of apartment households in Australia

The many benefits of apartment living are making this type of housing more popular than ever before.

According to the latest Census, over the past 25 years, the number of occupied apartments in Australia has increased by 78%. Nearly half of these (47%) are in New South Wales, followed by Victoria (23%) and Queensland (17%), mostly concentrated in the capital cities.

With the significant uptake of apartment living, we have also seen many new apartment buildings spring up in our major cities in recent years – though, it’s safe to say, not all of them are created equal.

Amongst the many ‘cookie-cutter’ apartments on offer, there are some that stand out, not simply for the design, detail and quality of the apartment itself, but also for the experience offered holistically for residents within the entire building.

Apartment living redefined

Some of the best developers in Brisbane, for example, are redefining the concept of apartment living. Gone are the days where there were either no resident’s facilities, or just a small pool or gym.

Not only is greater attention paid to the apartments themselves; light, bright, architecturally designed spaces with contemporary lifestyles in mind. The building itself is designed to enable residents to enjoy a 5-star hotel experience.

Our Ironfish Sydney teams took a tour this week of Gurner’s recently completed ‘FV No 1’ apartment building in the Brisbane suburb of Fortitude Valley. An area set for gentrification along the lines of Sydney’s Surry Hills or Kings Cross – with FV itself spearheading much of this change.

Gurner is a brand which exudes luxury, premium, elegance, so before arriving at FV No 1, we were expecting something special. But being able to view the completed building for ourselves provided an insight into how this luxury experience will work in practice for the future residents of the building.

On site at FV No. 1

Setting the scene at ground level at FV No. 1 is the opulent, hotel-like foyer, with private entrance through to ‘Foresters Restaurant & Bar’ a new curated bar and dining experience. On the rooftop at level 6 is the Altitude bar – set to be the ‘Ivy’ of Brisbane’s bar and dining scene.  

The foyer is staffed by the Peppers (property management) Concierge who can facilitate resident’s requests, from dry cleaning to valet parking – much like a hotel, all is possible. And, whether you’re in a one-bedroom or the penthouse, you can enjoy the same 5-star experience.

Upstairs on Level 6, the entire floor is dedicated to exclusive facilities, including a stunning pool, gardens and free, bookable private cinema room. The gym is spacious, with top-end equipment. Yoga classes run in the adjacent yoga studio and a personal trainer can be booked on request. Time to cancel the gym membership.

A special highlight are the private spa rooms, which residents can book for private use or even private parties. The rooms enjoy nice indoor-outdoor flow and are equipped with a flatscreen TV and wine fridge. It can be fully catered by Peppers, or you can bring in your own food and drinks.

Also available for residents is the Business Club, which includes bookable boardrooms, and hot desks equipped with the latest Macs. Residents can book these for free via a convenient app. Freelancers could effectively run a small business, receive and entertain clients all without leaving their home, or paying an additional $450 / month for a Wework hot desk.

FV No 1 residents enjoy further exclusive rooftop facilities – a jaw-dropping wrap-around infinity pool, sun loungers, spa, BBQ areas – all with quite possibly, the best views of the city.

Inside the apartments themselves, natural light abounds through floor-to-ceiling windows, which offer views of the city or hinterland. The quality of the finishes is a stand out; thick, white stone benchtops, luxury tapware, integrated study nooks, floor-to-ceiling glazing and beautiful lighting.

The verdict was clear from our visit – this is an enviable place to live, work and play, and for an investor, its appeal to a premium tenant is obvious.

Of course, premium generally comes with a price tag, and if such an apartment lifestyle was on offer in Sydney, it would be unaffordable for the vast majority of buyers. In Brisbane, however, the price tag can start below $400,000. As Fortitude Valley is at the beginning of its gentrification process, with government spending in place to redevelop the nearby train station ($500 million) and a new high-tech vertical school for the suburb currently under construction – in our experience, there are all the right signals for future potential as well.

Buying off the plan – render vs reality

The fact is, buying off-the-plan can offer much uncertainty to an inexperienced investor around the quality of the finished property. If you’re buying a property before it’s built, how do you know if it’s going to deliver on your expectations? Is it going to be well-built, is it really going to be as beautiful as it looks in the rendersin the brochure?

This uncertainty is one of the reasons why we do what we do here at Ironfish; to help investors or even first home buyers, review new properties on the market, to find one that really stands out for its quality, design, and future potential.

Many, many factors go into our property selection process, so that we can provide more of this kind of certainty to our buyers.

We also ensure our teams get to experience the finished result of the quality of the off the plan properties we have recommended to our investors, like FV No 1. It can also help our strategists to pass on this feedback personally to our investors who may live interstate and are unable to fly over to experience it for themselves.

If your experience or understanding of apartment living in Australia looks and sounds more like the first description than the description of FV No. 1, we highly recommend you take a look firsthand if you are next in Brisbane. It’s easy to say that apartment living has changed radically, and for the better. But seeing, as they say, is believing.

All properties Ironfish recommends to investors undergo a rigorous selection and due diligence process. If you’d like more information about properties, like FV No. 1, please register to access our selected properties list.

 

Photos: courtesy Gurner

Air Taxis to take off in Melbourne in 2020

Last week Uber announced to the world that the first non-US city to trial its brand-new Uber Air service would be Melbourne, Australia.

The Victorian capital will join US cities Los Angeles and Dallas in a pilot of Uber Air flights, with commercial operations expected to roll out in 2023.

Air Taxis: “same price as an UberX”

The announcement was made at Uber’s Elevate summit in Washington after the deal was sealed with Melbourne Airport, Macquarie Capital, Scentre Group and Telstra.

According to the company, its vision for Uber Air is to transport people around the city for the same cost as an UberX trip over the same distance.

“Australian governments have adopted a forward-looking approach to ridesharing and future transport technology,” said Uber Australia, New Zealand and North Asia Regional General Manager, Susan Anderson.

“This, coupled with Melbourne‘s unique demographic and geospatial factors, and culture of innovation and technology, makes Melbourne the perfect third launch city for Uber Air.

“We will see other Australian cities following soon after.”

10 minutes to Melbourne Airport

The Air Taxi service is expected to operate similar to a helicopter, except more quietly and efficiently. Passengers will travel in electric vertical take-off and landing aircraft known as VTOLs.

The service will operate via the Uber app, allowing passengers to travel across a network of landing pads called ‘Skyports’.

Given Melbourne’s city-to-airport rail link is still in the development stage, Uber Air offers an appealing interim solution for Melbourne’s commuters until the railway link is built.

“The 19km journey from the CBD to Melbourne Airport can take anywhere from 25 minutes to around an hour by car in peak hour, but with Uber Air this will take around 10 minutes,” Uber Elevate Global Head Eric Allison said.

car sharing australia

Private car ownership: ‘unsustainable’

Uber, which has already achieved market dominance in the ride-sharing market for on-road vehicles, is now looking to pioneer the same service – in the skies. Underlying this market expansion is the company’s belief that in future, people will be less reliant on their own cars.

“As major cities grow, the heavy reliance on private car ownership will not be sustainable,” Mr Allison said at the Elevate Summit.

Alongside Uber’s popularity surge, ride-sharing in other forms has also risen to prominence in our inner capital cities, particularly on the eastern seaboard. Companies like GoGet and Car Next Door are growing their membership base. Car dealers have also entered the market, offering car sharing of new vehicles, in a bid to attract millennials who are driving the shift away from private car ownership.

Holden, for example, launched its ‘Maven’ car sharing service in Australia two years ago, which offers authorised drivers the ability to rent a new car hourly, daily or weekly – and swap different types of vehicles to suit specific needs.

“One of the key benefits of Maven is its capacity to help broaden the appeal of driving for young people, many of whom are apparently less interested in vehicle ownership or getting a licence until later in life,” General Motors, Director of Urban Mobility and Maven Australia Head, Anthony Reimann told SMH.

Ride-sharing – impact on affordability

With multiple alternative options available over and above public transport, many inner-city residents are now willing to forego a car parking space at home.

For studio or 1-bedroom apartment buyers, a parking space can add a significant additional cost to the purchase price as well – impacting affordability.

City of Sydney is currently leading the charge with car-sharing spots. Close behind – and neck and neck – are Sydney’s Inner-west Council and Melbourne City Council.

The Sydney Inner-west council has 80 car spots currently and is working with GoGet to roll out an additional 20 more as part of a pilot program integrating car share with the light rail. It’s one of almost 50 councils GoGet has partnered with.

“If you reduce requirements for parking in new development you increase affordability of housing significantly,” said Sydney Inner-west Council Mayor, Darcy Byrne.

Tesla, Audi car-sharing in Australia

With this shift in mind, more developers are now offering integrated car sharing solutions in new apartment buildings. In Sydney’s Central Park for instance, Domain reports 700 residents, or one in 10, are car-share members utilising about 50 spaces in GoGet SuperPods at the One Central Park and Duo buildings.

Other developers are opting for premium car sharing services exclusive for residents’ use. For example, in Aria Property Group’s ‘The Standard’ apartment development in South Brisbane, residents will be able to rent one of three Teslas for their personal use.

car sharing australia tesla

Residents will be able to car share one of three Teslas in Aria Property Group’s ‘The Standard’ apartment building

Western Australia’s first ever car-sharing service was unveiled as part of Fini Group’s ‘Stirling Cross’ apartment building. Two GreenShareCar Audis are parked at the building, where they can be hired by the hour, inclusive of insurance and petrol costs by Stirling Cross residents.

With Uber’s Air Taxi in the mix of ride-share options, is the future apartment tower also equipped with a resident’s exclusive-use Skyport? Time will tell.

The future of the world’s 2nd most liveable city

According to the Victorian Government, Melbourne was selected by Uber Air following an 18-month process and was chosen for its status as being Australia’s leading tech city, its diverse and talented labour pool and ranking as one of the world’s most liveable cities.

The launch of Uber Air would not only bring a new industry to Melbourne, further contributing to the city’s economy and appeal, it may also have broader implications for the types of property people choose to live in or buy. A trend we will continue to watch closely.

“We’re thrilled that Melbourne has been chosen to partner with Uber Elevate to help start, nurture and grow what could become a new industry, revolutionising travel across the world,” said Victorian Premier Daniel Andrews.

“The future of transport is coming to Melbourne, giving us a flying start to capitalise on new opportunities that emerge as this industry takes off.”

Want to find out what makes Melbourne one of most liveable cities in the world? Download our latest quarterly report.

 

Queensland Budget: infrastructure spending continues

Queensland’s 2019/2020 State Budget, unveiled by Treasurer Jackie Trad earlier this week, confirmed the state’s continuing investment in major infrastructure.

The Budget includes a $13 billion capital works program which will directly support 40,500 jobs across Queensland (and 15,000 in Greater Brisbane).

queensland jobs

Source: Queensland Government, Jun 2019

queensland economy

Source: Queensland Government, Jun 2019

“Through this budget, the Palaszczuk government is choosing to stay the course,” Queensland Treasurer Jackie Trad said.

“We choose to continue our strategy of investing in jobs and in front-line services to meet the needs of our growing state.”

According to the Queensland Government, the State’s population grew by more than 86,000 in the last 12 months. This increase was the highest annual rise in more than five years.

In addition to major spending on roads and public transport, the Queensland Government is budgeting $19.2 billion for health, which will also help support healthcare and social assistance jobs growth.

A total $957 million has been allocated this year, to expand the Caboolture, Ipswich, and Logan hospitals.

In news for property investors, the Budget also unveiled changes to land taxes. For companies and trustees with landholdings worth more than $5 million, land taxes will increase by 0.25 cents for every dollar over $5 million.

The land tax on foreign companies and foreign trusts will be increased from 1.5% to 2%.

For more of the latest info about the Queensland property market, feel free to contact your local strategist or subscribe to our monthly newsletter.

Can a book really change your life? It did for Aidan

Here at Ironfish, we are proud to practice what we preach. Many of our staff are property investors themselves, and have kindly agreed to share their individual stories and their own personal property investment tips. 

 

Aidan Zhu

Ironfish Brisbane Senior Property Strategist

“I started with a $50,000 deposit and now I’ve got a $6 million portfolio working for me while I sleep. Knowing that I will have the income from this portfolio makes me feel very confident and secure about my financial future.”

CASE IN PROFILE

  • Migrated from China
  • Former small business owner turned sales consultant
  • Joined Ironfish as a strategist in 2013
  • Portfolio of 8 properties with total value of $6 million

Reluctant migrant

In 2009, when his wife Irene first proposed the idea of migrating from China to Australia, Aidan Zhu refused. His wife worked for a global 500 company, spoke great English and was ready to take on the world. Aidan had a modestly successful smart home business and very little English.

“It seemed a pity to give up on my business which was heading in the right direction. And without English, the idea of building a new life in a strange land seemed too difficult to comprehend.

“However, Irene was determined to apply for a skilled migrant visa, which was accepted. She moved to Australia, but I continued on with my business in China.”

The power of a great story

In 2010, Aidan made a trip to Australia, and this time Irene had some news for him.

“Irene was really excited. She said she’d met someone who would interest me. He was formerly a Chinese diplomat, a graduate from the top university in China, and built a new life and a successful business from scratch in Australia.

“Irene was of course, speaking about Joseph [Ironfish CEO and Founder]. She bought a copy of his book ‘From Bicycles to Bentleys’ and asked me to read it.

“As soon as Irene left for work that day, I took myself to the park and read the book from beginning to end in one go. Joseph’s career path inspired me tremendously and made me determined to try to set up a meeting with him.”

brisbane property consultant

Aidan pictured with his wife Irene and Ironfish Brisbane customers Eric and Mandy

Good career advice

After some time, Aidan heard Joseph was on a business trip to our Beijing office, and made a special trip up north to meet up with him.

“Joseph listened to what I had to say, and my dilemma about working or migrating with Irene to Australia and he quickly gave me some very useful and honest career advice. He told me that Australia is a pretty fair society. If you work hard, you will get something back. However, many industries are already very competitive. So if you want an opportunity you’ll need to work harder than most people, or do something that others don’t want to do.

“He also told me fairly bluntly that my lack of employment experience in Australia, coupled with my poor English skills would make me fairly unemployable. He said that sales would be a possibility, but that I’d need to work hard on my English.”

Door-to-door salesman

The conversation with Joseph gave Aidan the direction he’d been searching for. Previously, when he’d asked his friends for career advice when moving to Australia, they’d suggested going to TAFE or doing odd jobs, which didn’t sound that great.

“Sales was actually very much in line with what I was doing with my small business in China, and I love dealing with people on a daily basis – so it made sense. It gave me more confidence about my future life in Australia.”

In November 2011, Aidan gave up his life and business in China, and landed in Brisbane – the same year, Irene started working in Ironfish. In order to improve his sales and communications skills, Aidan joined a sales business, selling electricity services door-to-door. A year later, after wearing out the soles of many pairs of shoes and trimming down a couple of belt holes, Aidan went from someone who could barely manage a sentence in English to team sales champion.

Approaching investing like a ‘business’

At the end of 2012, Aidan met up with Joseph again at an Ironfish event. Joseph was impressed by Aidan’s commitment, growth and achievements and offered him a job to come and work at Ironfish as a strategist, which Aidan accepted.

“Coming on board as a strategist, meant comprehensive training – not only in terms of servicing customers, but about investing in property in Australia. What I learned very quickly from Joseph is that building wealth requires a two-pronged approach. Firstly, to work hard in your career to progress and grow your income. The second aspect is to invest and build up a portfolio of assets. And you need to treat these assets like a business. Think about it as if you’re going into business with the bank – they put up most of the money and you pay it back, mostly with the help of your tenants and potentially a bit of help from the tax system. You just need to ensure you can hold onto the asset for the long term.

“This analogy made a lot of sense to me. As a new migrant, especially, it’s not easy to save $1 million based off what you earn from your job. But by using leverage, investing in the right properties, and holding onto them long enough – it becomes a possibility.”

brisbane property consultant

Aidan and his wife Irene, pictured with their customers at the Ironfish Brisbane Christmas party in 2018

From $50K to a $6 million portfolio

At Ironfish we are proud to ‘practice what we preach’ and Aidan is no exception. After joining Ironfish in 2013, Aidan quickly set himself a goal of building a $5 million property portfolio. Beginning with a $50,000 deposit, and using the Ironfish investment strategy, Aidan has since managed to build a portfolio of eight properties, with a total value of $6 million.

“Now, I’ve got a $6 million portfolio working for me while I sleep. Knowing that I will have the income from this portfolio makes me feel very confident and secure about my financial future.

“My hands-on experience has also helped me understand how others like me can achieve the same results. I now have many customers who are Chinese immigrants like myself, professionals who work across different industries. For me, it’s not just about helping them build their property portfolio, it’s about exchanging ideas about wealth, business, growth. That’s what so fulfilling – and it’s exactly what Ironfish did for me.

“Now when I look back on my uncertainty and hesitation in moving to Australia, it strikes me that your starting point isn’t as important as the turning point in your life. For me, if I hadn’t read Joseph’s book, if I hadn’t taken the bullet train to Beijing to meet Joseph, if I hadn’t chosen a tough job as a door-to-door salesman – I wouldn’t be where I am today.”

Aidan’s property investment tip

Many people are slow to start investing, mainly because they’re trapped by their own thinking. Ironfish taught me that everything is possible, you simply have to dare to dream big, have a go and make sure you find the right people to help you get there!

What makes this 36-year-old multi-millionaire so well-respected in the industry?

You won’t find him on any rich lists – not because he doesn’t belong there, but because Tim Forrester, Aria Property Group’s CEO & Founder, prefers to travel under the radar.

In addition to being one of the (quietly) wealthiest individuals in Australia, Tim Forrester runs a billion-dollar property development company which has single-handedly transformed South Brisbane / Fish Lane into a vibrant destination precinct.

The company’s last three developments have won the national award for best high-density development at the UDIA industry awards. It can well be argued, that Tim numbers amongst the best developers in Australia – no mean feat for someone still in their 30s.

best brisbane apartment

Earlier this year, Oxley + Stirling by Aria Property Group took out top national honours at the UDIA industry awards

Aria and Ironfish have been working together for several years, and many of our investors would already be familiar with Aria’s dedication to quality in design and build, along with its signature rooftop clubs and exclusive resort-style facilities available for residents.

Tim was kind enough to come in to Ironfish North Sydney offices, for an intimate Q&A session with Ironfish CEO & Founder, Joseph Chou as part of our new ‘CEO Talks’ series of events. These events are designed to inspire as well as educate – enabling attendees to gain valuable insights into the life and mindset of highly successful people in business. 

As the evening unfolded it was easy to see not only why Tim has become one of the most successful in his industry, but also why he’s so well-liked and respected.

best apartments brisbane

Legacy

Anyone can head to Aria’s website to see their company mission – ‘creating iconic projects that we’re proud to walk our families past in 20 years’ time’. But what does this really mean? Tim said his dad taught him from an early age, that while money will come and go, the only thing left behind will be your reputation.

“Money is important in business, of course. But it’s not the driving force in Aria, for us it’s about leaving a legacy. Whether we’re making a decision about tapware, or the restaurant we put underneath a building – we ask ourselves, is this something we’re going to be proud of in 20 years?”

$2 for tuckshop

Tim is the son of Rod and Jan Forrester, his father well-known for founding prominent property development company FKP Limited. Despite growing up in a successful family, Tim’s parents ingrained in him a strong work ethic.

“Mum and Dad started out living in a caravan park in Mooloolaba. They always expected us to work hard. When I was a kid, I remember coming home one day and I asked dad for $2 to buy my lunch at the tuckshop, like some of my friends. My dad said: ‘Sure, I’ll give you $2 for tuckshop, but you’re going to have work for it. You’ll need to wash the car first!”

The power of entrepreneurship

Tim started his first business at the age of 17. He bought a mobile coffee cart for $6,500 and got himself a spot at the Woodford Folk Festival. He made $21,000 in a week.

“That was my first experience of having my own business, but we worked hard – 15/16 hours a day. Everyone I know who has been successful in business, always worked harder, always worked longer, particularly in their 20s, like me, before kids. The harder you work, the luckier you will be.”

best apartments brisbane

The luck of timing

Tim’s first ‘pot of gold’ came from property; he bought two properties in Brisbane off-the-plan, both of which doubled in value by the time they came to settle.

“I just thought, wow – how good is this? This is the best thing ever, why wasn’t I doing this before? But little did I know, that growth had been building for the past 10-15 years. I just happened to get lucky with timing. I realised soon after that property investment is a long-term investment. Sydney took 14 years to double, not two years. It’s easy to forget that. I expect Brisbane will be flat for another 12 months, and then we’ll start seeing some growth.”

Self-discipline

With three kids under five, how does Tim balance a billion-dollar company with raising a young family?

“I never want to be one of those parents who looks back and thinks I should’ve done this or that. I look at my son and feel like I blinked and he went from being a baby to 5 years old. I don’t want to miss out on this time with them. So basically, my alarm goes off at 4:30am and all I want to do is roll over and go back to bed. But I get up, train, and then I aim to get into work by 6/6:30am so I can get home by 5pm to spend time with the kids. (I also tend to be in bed by 9:30pm!). At the end of the week, I often analyse how I could have freed up time – several minutes here or there, so as not to make those mistakes again. Getting up earlier really does help you buy yourself more time.”

Financial freedom

As a final question, Joseph asked Tim, what does it feel like to be financially free – given that many of our investors are working towards this goal.

“Financial freedom doesn’t solve all your problems, but it does give you more freedom to choose your dreams, and spend more time with family and friends. Also, the ability to give. We have recently established the Forrester Foundation which aims to assist disadvantaged young children and address the impact of social media, particularly on teenagers. It’s good to be able to support something that’s important to you.”

With thanks to Aria Property Group CEO, Tim Forrester.

CEO Talks run quarterly at our North Sydney office. Our next guest CEO is Will Deague, CEO of Deague Group.

For the latest seminar listings, property news and updates, please subscribe to our monthly newsletter. 

RBA cuts rates to record low 1.25%

The Reserve Bank of Australia (RBA) has today cut the cash rate by 25 basis points to a new record low 1.25%. This marks the first move in the official interest rate since August 2016.

The RBA noted that the cut was delivered to help “support employment growth and provide greater confidence that inflation will be consistent with the medium-term target.”

Treasurer Josh Frydenberg yesterday advised executives at the nation’s big four banks that the government expects them to pass on in full any cash rate cut from the Reserve Bank.

If Banks do pass on the full rate cut, a typical investor with a $400,000, 30-year investment loan will see their mortgage repayments fall by $57/month or $684/year. (Assuming current interest rate of 4%).

RBA cash rates 1991- present

 

Boost for the markets

Today’s rate cut is expected to bolster property markets, with the RBA noting improvements to auction clearance rates in certain markets, which have already taken place.

The decision to cut rates will likely continue to support the property market moving forward and help to stimulate continued economic, jobs and wages growth.

The RBA expects that the national economy would grow by 2.75% in 2019 and 2020.

Much of the growth would be underpinned by record levels of infrastructure investment as well as positive movements in the mining sector.

In terms of employment, the RBA noted that jobs growth has been robust over the past year, with labour force participation noticeably increasing. At the same time, the unemployment rate had been trending at 5% consistently for some months, however edged slightly higher to 5.2% in April 2019.

The rate cut should help to see a pickup in wages growth which has begun to improve, albeit slowly.

Want to find how this may impact your property investment portfolio? Book a free appointment with one of our property investment strategists. 

Stay up to date on the latest property investment and market news by subscribing to our monthly newsletter.

Confidence returns to the market post-election

A message from our CEO & Founder, Joseph Chou

Two weeks out from the Coalition victory and the overwhelming response from customers, colleagues, developers, business associates, financiers, has all been very positive, and it has been a welcomed result for the property industry and property investors.

Compared to other developed nations, the Australian economy has been running stronger than most. The current Government has almost returned the budget to surplus and this economic stability is likely one of the reasons why the Coalition won.

The return of the Morrison Government also brings back certainty for many Australians. With Labor advocating for change on many fronts, there was some concern and doubt about Labor’s ability to deliver those change as well as the potential implications of those changes.

For example, Labor’s proposal to change negative gearing scared a lot of people and certainly spooked some property values in the last 18 months. For new buyers, it also raised concerns around potential negative equity in future.

Now that these concerns are alleviated, and no change is expected, business is back to usual. Those who believed in property continue to have faith in the market. 

election property market

With no change to negative gearing; stability in government; and the economy expected to continue positively, this could potentially lead to even lower unemployment rates, or even wage increases, all of which can help people to sustain their property investments. These factors contribute to higher levels of confidence, and we’ve seen that return to the market already. Just last week we held a seminar in Sydney after the election and we received double the number of bookings we were expecting. To me, this is another sign of confidence and interest in the market.

New Government policy

There are also new policies proposed by the Morrison Government, which we would expect to have a positive impact on the market. Just prior to the election, for example, the Liberals proposed a First Home Buyers Scheme, which would enable people to purchase with only a 5% deposit. This is something many people expect to add pressure, especially to the affordable end of the market.

Ironfish has developments across the country, and while we’re keen to support people to build up some assets, we’re also helping people get into their first home as well. So, we’re excited about our contribution to that.

The newly re-elected government is also very pro-building; with billions in infrastructure investment across the country. Every major capital city is going through major infrastructure projects and transformation, the scale of these projects will help strengthen the economy further.

One thing I’ve been emphasising to people lately, is that the Liberal government is very pro-enterprise, supportive of people who take risks, work hard at building a new business. This ‘philosophy’ can help more people feel confident to step out of their comfort zone, to take risks, innovate, have a go at bringing their ideas to life.

I have a strong belief that a country can only go forward, when it encourages its people to have dreams. When a country stops dreaming of growth, and is purely focussed on redistributing what’s already there, then the potential for growth is stifled.

One of the reasons why I love Australia so much is that it gives everyone a fair go. Here, you can have the opportunity to go out and pursue your dreams and know that you can always pick yourself up – as we have a great society that can support people when they’re in need. It’s easy to underestimate the impact of this.

Credit squeeze loosened

Coupled with the election results, we also received some good news immediately afterwards. APRA has now talked with more certainty around a reduction in lending restrictions; giving people greater purchasing power. There are also further indications of potential rate cuts by the RBA – all of which adds to the current excitement around the markets.

With the credit market being so very tight, alongside a growing Australian population, a shortage of housing supply is expected by 2021. Typically, it takes around three years to turn around a residential property development – perhaps even longer. So there will be a period of time in the near to medium term where things will be good for people who already own properties!

I’m not saying there will be another boom in Sydney and Melbourne as a result of all these factors, but there is at least a lot more confidence in the market again, which can also contribute to the overall economy.

election property market RBA

Positive media

In the last couple of weeks, it’s hard not to have noticed the many positive news headlines for the property market – even Sydney and Melbourne. The reality is that there are a lot of people who are guided by the media, or who have been sitting on the sidelines to see what would happen after the election. People know that the media tends to be quite negative, so when even newspapers are being positive – it’s a strong statement. It’s been quite refreshing, from my point of view, that the media have had to report some good news for a change!

2019 property strategy

For investors who have been taking a ‘wait and see’ approach, to me there are three very clear takeaways from the events of the last two weeks.

    1. If the credit squeeze is loosened and banks are already reducing rates, it means money is as cheap as ever, and potentially may even become cheaper. If people need to borrow money to build future assets, it makes a lot of sense to borrow money when it’s really cheap, rather than when it’s really expensive. We’re in this almost unprecedented time, when people can use leverage – i.e. the bank’s money – to build their future nest egg.

 

  1. In my opinion, there are now opportunities in a few markets. For example, Melbourne apartments, which underperformed in the current cycle, after playing catch up off the back of some great new planning rules and population growth. From my experience, the market cycles are working the same as they have been over the last few decades.We also see very strong signs in the South East Queensland market due to interstate migration and the relative affordability there. With Brisbane and the Gold Coast especially, I feel that for investors who go in there now, there will be a good chance for growth in the foreseeable future. All the infrastructure going in will be completing in the next 5 years. Interstate migrants who came in 18 months ago and started out renting, will in the next 12 months be looking to buy. Investors who made money in Sydney and Melbourne are continuing to go there – especially for premium product that appeals to owner occupiers – the type that Ironfish recommends to our buyers, a mixture of house and land as well as apartments.

    Interestingly, I did a seminar in Perth on the 16th of May, which had an overwhelming show up – we were hoping to get about 80 at most, but over 100 people showed up, some forced to stand in the cold as the venue only held 80. That shows me also the market is simmering a little there, as we have been telling our investors recently.ironfish perth
    An overwhelming attendance at a recent Ironfish Perth event

  2. The last thing I would emphasise, is to take a long-term approach to your property investment strategy. Because irrespective of governments and what’s happening outside, many people will still have to face the reality of not having enough to support themselves – whether at retirement or due to illness or other factors. If they don’t have other assets, or not enough super, they will face a challenge – whether they want to face that reality or not. So now is a good time to put some plans in place, gather a team of professionals, put a strategy together, make a commitment, and start doing something because it’s never going to get easier.

Regardless of when you decide to do something, you will always have to face the pressure and discomfort of making a decision. The ability to trust other people, the inconvenience of having to do things – all of that isn’t going to go away if you postpone it a year or two.

So, don’t think of property as an opportunistic investment, it is a long-term investment.

In the short term, however, what we know is that Scott Morrison’s election win has also won him the support of the Liberal party, giving him some freedom to run the country as he wants to. I know him from his time on the Property Council of Australia, and from when he was Treasurer, to be someone who is pro-building; a do-er, not a talker.

I think people should take advantage of all the good things that are happening – a journey of a thousand miles starts with a single step, as they say. If you’ve been waiting for a sign, then it’s time to get started; if you don’t get started, you’ll never get started.

Joseph Chou is the CEO & Founder of Ironfish and a highly seasoned property investor.

He shares his thoughts on the Ironfish blog at the end of each month and also travels regularly across Australia speaking at various events, workshops and property investment seminars.

To book your seat at his next speaking engagement, visit our property investment seminars page.

Trains, planes and 200,000 jobs – the future of Sydney’s south-west

As Sydney’s north-western residents this week enjoy the fruition of years of planning, development and construction in the launch of Sydney Metro North-west – the project, in many ways represents just the beginning of big infrastructure set to transform Sydney’s west over the next decade.

From West Connex, expected to open later this year to the Parramatta Light Rail set to open in 2023 to the West’s headline project: the Western Sydney Airport which is expected to be complete in 2026. These projects signal big changes for the north- and south-west and highlight the NSW Government’s continuing focus on big spending to support this growing region.

$5.3 billion Nancy Bird-Walton Airport

Over the coming decades, residents and workers in Western Sydney will benefit from easy access to strong local and international connections and a 24-hour economy centred around the new Western Sydney Airport.” – NSW Government

Arguably the next most anticipated infrastructure project of Sydney’s west is the $5.3 billion Western Sydney Airport – recently named the ‘Nancy Bird-Walton Airport’ after Australia’s first female pilot licensed to carry passengers.

Earth moving works started in September last year; power lines have come down and the Baderys Creek ‘Harbour Bridge (without the harbour)’ has begun construction. A $3.6 billion roads package is underway to support anticipated demand around the airport, including the $509 million upgrade to Bringelly Road (which borders Leppington). There are also plans for a new M12 Motorway, which is expected to commence construction in the early 2020s, and once complete, will link directly into the M7 Motorway from the future Western Sydney Airport. 

Western Sydney Airport construction underway

EOIs are now being sought for the new terminal design of the airport, which is being built on a land size roughly twice as large as Sydney Kingsford Smith Airport. Once complete, it will be a full-service international airport. It will generate more than 11,000 jobs in the construction phase, and a further 27,000 jobs in the first five years of operation.

200,000 jobs to come

Immediately south of the new airport is the NSW Government’s ‘South West Growth Area,’ a region forecasted to generate over 200,000 jobs, over the next 20 years. Most of these jobs will be centred within the new ‘Western Sydney Aerotropolis.’

The Aerotropolis will be located in the suburb of North Bringelly. It will establish a new high-skill jobs hub across aerospace and defence, manufacturing, healthcare, freight and logistics, agribusiness, education and research industries.

Recommended corridors for the North South Rail Link and South West Rail link extension

leppington western sydney

Source: NSW Government

$7 billion North South Rail Link

To provide public transport links to the airport, both federal and state governments have committed to jointly funding an initial $7 billion for Stage 1 of the North South Rail Link. This rail line will run from St Marys to Badgerys Creek and is expected to open ahead of the 2026 completion date for the Western Sydney Airport.

Investigations are also underway to develop a full North South Rail Link from Schofields to Macarthur as well as a South West Rail Link to connect Leppington to the Western Sydney Airport via an interchange at the new Aerotropolis.

The only train station

In 2015, Leppington Station was unveiled to the public. This train station is the only station that currently sits within the South West Growth Area – one of the fastest growing areas of Sydney.

Leppington station – then and now

Leppington is just a couple of suburbs away from the new airport and Aerotropolis and benefits from being a step ahead in terms of existing infrastructure – facilitating easy connections to all three Sydney CBDs

“As this week’s roll out of Sydney Metro shows, the completion of major infrastructure projects can be truly transformative for a region. For South-west Sydney, undoubtedly, the Western Sydney Airport project will be a once-in-a-generation project with flow on effects for neighbouring suburbs. The tens of billions of dollars being spent is going to be amazing to watch over the next decade, and this will absolutely have a profound effect on the desirability of the area”  said Ironfish Head of Property, William Mitchell.

“It ticks a lot of boxes for us in terms of showing long-term potential.”

Want to stay up to date on what’s happening in North- and South-Western Sydney growth areas? Subscribe to our monthly newsletter or download our quarterly market reports.

Driverless trains take off in Sydney

Sydney commuters will get to ride the city’s first driverless train when the Sydney Metro opens to the public this Sunday, 26th May. And for its opening day, the metro trains will be free of charge for passengers.

Sydney Metro will offer high frequency, turn-up-and-go services along the ‘Metro North West Rail Line’ which spans between Tallawong Station at Rouse Hill to Chatswood, with a train every 4 minutes during peak times.

The new Kellyville Station. Image courtesy Transport NSW

The Metro stops at 13 stations along the $8.3 billion Metro North West Line, including eight new metro stations and five upgraded stations.

Metro North West Line

Upgraded Stations

  • Epping
  • Macquarie University
  • Macquarie park
  • North Ryde
  • Chatswood

New Stations

  • Tallawong (Rouse Hill)
  • Rouse Hill
  • Kellyville
  • Bella Vista
  • Norwest
  • Hills Showground
  • Castle Hill
  • Cherrybrook

The Metro trains will synchronise with the Chatswood train timetable, to manage the additional 10,000 commuters expected to interchange at Chatswood at peak hour.

Over 4,000 car parking spaces are in place along the train line, along with 130 ‘kiss and ride spaces’, 340 bike storage spaces and 52 taxi stands.

Bus services will be adjusted to help commuters access the new stations and train services. There will also be a North West night bus service operating in the short term – over the next six months – from Sunday – Wednesday, until the service and timetable grows to full operations.

The 36-kilometre line is the first stage of the Berejiklian government’s plans for multiple metro train lines in Sydney. The second stage under construction extends the line from Chatswood, under Sydney Harbour to the CBD and onto Sydenham and Bankstown, which is expected to open by 2024.

The first stage of the network offers a ‘preview’ of the South West Line to come in 2024, and the St Marys to Badgerys Creek service due to open in 2026.

Sydney Metro routes

sydney metro western sydney

Transport was a key theme in Premier Berejiklian’s pre-election promises, with the announcement of new key transport projects set to directly benefit Sydney’s north- and south-western suburbs.

In January this year, Transport Minister Andrew Constance also announced the State Government plans to deliver nine new stations along a proposed $18 billion metro rail line from central Sydney to Parramatta. Known as Sydney Metro West, the proposed rail line will service the key precincts of Greater Parramatta, Sydney Olympic Park, The Bays Precinct and the Sydney CBD. It will also feature a new underground metro station at Westmead as a means to support the growing residential area as well as the health, research and education precinct.

Image courtesy: Urban.com.au

In recent times, a large part of NSW’s infrastructure planning has been guided by the Greater Sydney Commission’s Three Cities Strategy, which delivers concentrated benefits to the Sydney’s West and South-West regions to support the Western Sydney Airport planned to open in 2026.

For further updates on Sydney Metro or for more of the latest news impacting the property market, subscribe to our monthly newsletter.

What’s not changing – 2019 Federal Election results

The differences in housing/property related policy between the two major parties have been well publicised – namely negative gearing and capital gains tax.

But what about all the ways both parties are actually aligned?

We took a look at four key areas where both Labor and Liberal federal governments largely agree on policy decisions, and why these areas are fundamental to the long-term performance of residential property.

Population

Australia’s population has been growing well ahead of previous forecasts, with most of the population choosing to live in our capital cities.

In the 2018 financial year, Australia’s population grew by 391,000 people, with 79% of this gain concentrated in the major capital cities.

Both Labor and Liberal governments largely agree on population growth. Overall no change is expected in overall population growth with overseas migration remaining consistent.

The Liberal party proposed to cap permanent migration levels from 190,000 to 160,000, which Labor agreed to implement also. However, this would reflect no real change, as in practical terms, Australia only took in 162,417 migrants (over the 2018 financial year), regardless of having a higher cap in place. As a result, were the proposal to be implemented, it’s expected to have little to no impact and population growth in Australia, particularly in major capital cities, will continue to remain strong.

Infrastructure

Both parties appear to have shifted discourse on population growth concerns to instead focus on new infrastructure development and spending.

Both governments, including at state levels, have been prioritising and accelerating delivery of major infrastructure programs across the country, to support population growth.

As a result, both parties at federal government level have committed significant investment into major transport and city infrastructure.

This includes the continuation of a $100 billion decade-long infrastructure plan, which not only contributes to ongoing jobs creation, but also directly impacts property in areas which are set to benefit from new infrastructure projects once built.

The Federal Budget revealed that most of the infrastructure spending would be concentrated on rail and roads. Some of the headline projects included New South Wales’ $3.5 billion Western Sydney North South Rail Link (first stage) and Victoria’s $2 billion fast train between Melbourne and Geelong. Also, nationally the Urban Congestion Fund increased from $1 billion to $4 billion to fund projects aimed at reducing congestion in urban areas.  Labor has agreed to match this level of funding and has highlighted a greater need for centralised decision making for the independent Infrastructure Australia body.

Income tax cuts

Labor and Liberal have both proposed to deliver income tax cuts in a bid to boost savings and strengthen household finances.

Both are proposing to increase a tax offset for low- and middle-income earners. Both parties are offering an increase in the 37% tax-bracket threshold to $90,001 from $87,001 currently. However, the main difference is that Labor has promised to increase the tax offset for people earning less than $48,000 a year whilst taxing people who earn over $180,000 a year a little higher than the Liberal party.

The promised tax cuts from both parties come at a time of very low unemployment levels and where the market is now seeing some positive signs of wage growth.

The ABS recently reported 0.5% wage growth in the March quarter and 2.3% wage growth per year.

“The Australian labour market remains strong. There has been a significant increase in employment, the vacancy rate remains high and there are reports of skills shortages in some areas.” – Reserve Bank of Australia

First home buyer incentives

Both parties have also agreed to adopt a first home buyer policy in an effort to improve housing affordability. The government proposes to set up a scheme to offer loan guarantees for first home buyers, so they could buy a property with deposits of just 5% of the purchase price.

This is expected to add some pressure to property, particularly at the affordable end of the market.

Federal election results – impact on property investors

With the election only a day away, it’s no surprise that both parties are loudly broadcasting their differences, particularly around negative gearing and CGT.

However, population growth, infrastructure investment, tax cuts and incentives such as first home buyer guarantees are key policy areas where both parties largely agree. And these are important fundamentals which contribute to ongoing demand for residential property.

Other market factors, outside of political forces, remain relatively buoyant also. For example, the very low unemployment rate of 5.1%.

That said, without discounting the role of politics in influencing the market, historic data shows that whilst parties and Prime Ministers may come and go, longer-term demand for residential property has remained strong.

For example, over the past 26 years, we have had shifting Labor and Liberal governments and a total of seven changes in Prime Minister and the property market long term trend has been up. Houses have grown from $130,893 to $640,174 and apartments from $111,418 to $460,327 reflecting an average compound annual growth rate of 6.30% and 5.61% respectively.

We will continue to monitor what’s happening in the market after Australia heads to the polls tomorrow. Stay tuned for our post-election update.

Keep up-to-date on the latest news impacting the property market and your investment properties: subscribe to our newsletter.

Australians paying mortgage faster

According to research by the Reserve Bank of Australia (RBA), approximately 30% of home loans are two or more years ahead of their scheduled repayment date.

The vast majority of remaining loans are estimated to be at least one month to 24 months ahead.

pay mortgage faster

On the other hand, the percentage of mortgages that are ‘impaired loans’ – ie when a borrower is 90 days behind payments and their loan is in negative equity is only a ‘very low 0.2%.’

This positive financial behaviour has been consistent over the last several years, with banks and brokers largely reporting the same.

Resilient housing market

The RBA’s research reveals that the housing market in our capital cities is more sound than people think. Despite the market pullback in Sydney and Melbourne, the RBA points out that loan to value ratios (LVRs) are strong, with strong positive equity for capital cities. Most of the risk appears to be concentrated in mining towns where a higher percentage of home owners have negative equity.

“The continuing low rates of negative equity outside the mining exposed regions reflect three main factors: the previous substantial increases in housing prices; the low share of housing loans written at high LVRs; and the fact that many households are ahead on their loans, having accumulated extra principal payments,” the RBA report states.

Pay your mortgage off faster

So how are 30% of borrowers managing to get ahead on their mortgage repayments?

Firstly, Australia’s record low interest rates are resulting in lower overall interest payments, impacting affordability.

Better affordability means more Australians are able to pay additional amounts on top of their minimum mortgage repayments. For example, many Australians secured a mortgage years ago when interest rates were 7%+. By maintaining their repayments at the same monthly amount whilst interest costs reduced as the cash rate dropped, the amount of debt they paid off increased. Over the course of many years this adds up to a considerable reduction in debt, meaning many households are now well ahead of their repayment schedule.

A further section of borrowers are saving money in their offset account.

If you’re looking to get ahead of your own mortgage repayments, here are some additional tips to consider.

  1. Refinance

Interest rates are at record lows, and banks are vying for the business of people with strong financial profiles. If it’s been a while since you looked into your mortgage, it’s worth shopping around for a lower rate and a good mortgage broker.

  1. Structure

A carefully structured loan can help you to increase the tax effectiveness of your loans, increase your interest savings, target specific timelines for paying off your debt and perhaps most importantly, provide you with the flexibility of offset or draw-down facilities. It’s tempting to seek out the lowest interest rate, however a loan with a seemingly higher interest rate and better structure could outperform a loan with a lower rate.

  1. Pay more – and more frequently

If interest rates go down, and your minimum payment goes down you could still keep your payments steady. Another example is instead of paying monthly repayments, pay fortnightly. Interest is calculated daily so paying more frequently can reduce the amount of interest paid. If you’re on a P&I (Principal and Interest loan) most of your interest is paid in the early years, so paying higher amounts early on can help you start paying off the principal.

  1. Budgeting hacks

Some people swear by small financial / budgeting hacks that make a difference to their mortgage balance at the end of the year. For example, when switching from monthly to fortnightly payments, some people make half their monthly payment each fortnight. This takes advantage of the fact that there are 26 fortnights in a year but only 12 months. Effectively, this means that by the end of the year you’ve made two extra ‘half-payments’ on your mortgage – that’s one whole month extra!

If you would like further information or tips about investing in today’s market, book a free appointment with one of our strategists. You can also subscribe to our monthly newsletter to stay up to date on what’s happening in the market.

Taking the plunge: investing at 60

 

Christine Ricketts

Cellar Director, Cellarmasters

“I had a poor experience with a previous investment property/property company, so I was extremely cautious about investing again with a new company. I had my cynical hat on and checked and double checked everything Ironfish told me. Ironfish was so patient and really good with finding answers and solutions to reassure me.”

CASE IN PROFILE

  • Wine educator working for major national company
  • Close to retirement age
  • Extremely nervous and cautious about investing
  • Keen to add to her portfolio to supplement retirement income

investing at age 60

When a property investment goes wrong

Buying an investment property is a big decision and serious commitment. So, it makes sense to want to do your due diligence and make sure you feel 100% confident before making a decision to invest. But for Ironfish North Sydney customer, Christine Ricketts, it was even more difficult to invest again due to a bad past experience.

Before investing with Ironfish, I already had two other investment properties. The first was really good, not brilliant but steadily growing and performing. The second went very poorly. I was rushed in to it by a dodgy financial advisor. My gut said not to do it; but I allowed myself to be rushed into it. This experience really put me off investing in property again.”

5 years from retirement

Christine is lucky enough to have possibly one of the most fun jobs in the world. As Cellar Director of Cellarmasters, she gets to travel around Australia, tasting good food and wine for a living. As much as she loves her work, she is now at a point where she is thinking about retirement, and investing in property has always been part of her retirement plan.

“I’m 60 now, and I’m not retiring for another 5 years – although I doubt I’ll retire completely. But I want to retire comfortably. I don’t want to be living on the pension; I want to make sure I have enough to retire on.

“But I was very nervous about investing again after the last property. I’d also heard from the bank that at my age I wouldn’t be able to get a loan.”

investing at 60

A better mortgage structure

Christine knew one of our new North Sydney strategists Tony, from his former career at Woolworths, working in finance. After joining Ironfish, Tony reached out to Christine, because he knew she was an investor, to see what her plans were next and if she needed any help.

“When Tony approached me, I said no, initially. But he’s quite persistent! I trusted him, as we already knew each other previously. I knew he’s trying to make good in his career change to property, and he wouldn’t recommend a bad investment to me – especially if he wants me to recommend him to others!

“He invited me to a seminar run by [Ironfish CEO] Joseph Chou. This is where I asked the question about finance – how I had spoken to the bank and told I’m too old to borrow money, since I’m turning 60 and mortgages are 30-year mortgages. I was a bit miffed with the bank, because I own my own home outright, and had a very healthy deposit ready for a third investment property. Joseph explained how that is not necessarily the case. It could be that you can borrow money for an investment, but not for a personal mortgage and it’s worth talking to a good broker to find out.

“Tony then introduced me to a mortgage broker, Jordan. Jordan isn’t a financial advisor, so I was happy about that, especially after my last experience! He explained that I would only get a five-year mortgage for a personal  property but could get a loan for an investment property as long as I had collateral.

Once I had a property in mind, he could show me a lot of financial scenarios, for example, if interest rates went up, strata fees went up, if it went un-rented for a long period of time etc. He also suggested that to sell my second property now would lose me a lot of money, so it would be worth trying to hold it for longer. He also showed me what would have to happen for me to lose everything – but I don’t think that’s happening. It made me more relaxed – although I’ll never be completely relaxed!

“The broker was separate to Tony and Ironfish, so that helped me have more confidence in him, though I still had my cynicism out, since he’d been recommended by them. But Jordan worked very, very hard for me. Both Tony and Jordan knew I’d been burned in the past, and I wouldn’t be quiet if they weren’t good! They’re both starting out in building up their business/careers and don’t want any bad press; they both worked very hard to ensure I was happy!

“Ultimately, when I decided to go ahead with an investment, my broker restructured all my loans; he’s made my deposit into an offset and developed a structure for all my loans in a way that’s beneficial for each one, and I can afford them.”

Docklands apartment

Christine eventually settled on an apartment in Docklands, Melbourne, which settled a couple of weeks ago, and Ironfish Real Estate (our Melbourne property management team) found a tenant for her the same week. Her yield on the apartment is a healthy 6.2%.

“I stay in Docklands often when I travel to Melbourne for work. So I know the area pretty well. I can walk to the CBD, and if I didn’t want to walk, there’s a tram. I just thought it’s a good area in that way – for professionals who want to live close to town. It made a lot of sense. There’s restaurants and bars there too now. It’s not hip like Brunswick and Fitzroy but it’s an upcoming area. I checked everything I was told by Ironfish or my broker with a friend of mine who works at CoreLogic – which helped me feel better as well.

“The other factor was stamp duty, which was really low. Also, the rent is good. My other properties don’t have such a good rental yield! Everything is so far so good with Ironfish property managers – I checked their rates too against the market before I signed on with them. I’d had a bad experience with the managers who the other company had recommended to me on my other investment property, so I wanted to make sure.”

docklands

Patience, service, peace of mind

When asked what Christine appreciated most about her experience investing with Ironfish, she laughed.

“I think looking after somebody like me takes a lot of patience! I was so very nervous, and cynical and very vocal: ‘No I’m not doing it!’ ‘What’s going on with this?’ For example, I told Tony I’d find my own insurance, and he said: ‘Sure. But compare it to this insurance, which I’ve found for you, I think will be better coverage’. So, I did compare it and turned out he was right. I compared and checked pretty much everything, and it was all right!

“I really appreciated Tony’s absolute patience with me: changing my mind, finding solutions, finding answers that could reassure me. I also met his aunt, Priscilla [one of our most experienced strategists at Ironfish]. She explained a lot of things to me and completely understood my nervousness as well. Throughout the process, while I was considering properties, Tony would reassure me that if it wasn’t going to happen with one particular property, he could always find me something else. With Ironfish and with Tony, the service was just very, very good and so patient with someone like me.”

Christine’s property investment tips

  1. Do your due diligence – feel free to check with someone independent from Ironfish about the property or what’s happening in the market
  2. Make sure you can afford it – find a good mortgage broker to work it out for you. Tony introduced me to my broker as well as my solicitor (before taking up her services I checked her against my usual solicitor. He said she’s fine, very experienced.)
  3. Look at what’s changing with legislation – for example, in Victoria there are specific legalities around inclusions – e.g. blinds are not included. Know exactly every part that you’re in for to avoid surprises.
  4. Make sure you’re investing in a growth area – you can maybe pay for a data report. I had a friend in the industry, so I was able to double-check that way.
  5. If you’re young, just do it! I wish I’d started younger. Try to diversify across different cities if you can afford it and have other investments too!


Read more Ironfish reviews from our customers

Are you thinking about investing; unsure about how much you need to retire; or just feeling uncertain about taking the plunge? Have a read of some more Ironfish reviews from our customers, to learn how others are investing. 

 

RBA cash rate remains on hold

Despite some market anticipation around a potential rate cut today, the RBA has kept the cash rate on hold.

The cash rate has remained at a record low of 1.5% for 32 consecutive months.

Arguments for the bank to cut rates ahead of the Federal election later this month were largely centred on Australia’s very low underlying inflation rate of 1.6% which is current below policy targets.

“Inflation targeting” traditionally has been motivated by a need to set some stability in expectation for consumers and businesses.

But on this point, RBA noted that the labour market remains strong, with a national unemployment rate trending at 5%. This is considered ‘full employment’ and would likely assist with upward pressure on inflation.

“The unemployment rate has been broadly steady at around 5 per cent over this time and is expected to remain around this level over the next year or so, before declining a little to 4.75% in 2021,” said RBA Governor, Philip Lowe.

Governor Lowe said that he expects inflation to be within the range of 2 to 3% by 2020.

Rate cuts or lower unemployment – which would you prefer?

Although the cash rate remains on hold today, many analysts are tipping a rate cut to come soon, and some suggest two cuts are likely before the end of the year.

If this were to occur, it is expected the Sydney and Melbourne housing markets would stabilise faster, and obviously affordability would increase across the country – that is, providing the banks pass on the full interest rate cuts to customers.

However, insights from Mr Lowe suggest that future rate cuts would be dependent on the outcome of the labour markets. If the unemployment rate were to drop further, the argument for a cash rate cut would decrease.

“These insights from Mr Lowe are telling, and ultimately good news despite the cash rate remaining unchanged. The RBA is monitoring the unemployment rate very closely, and any further decreases would be a positive indicator for the economy and lead to potential wages growth in the future. On the other hand, if the unemployment rate does not decrease there is an argument, and room for further rate cuts. Both scenarios have positive impacts.”  said Ironfish Head of Property William Mitchell.

Want to find out more or how this may impact your property investment portfolio? Book a free appointment with one of our property investment strategists. 

Stay up to date on the latest property investment and market news by subscribing to our monthly newsletter.

 

What can you buy for under $400,000 in Australia?

Sydney, Melbourne, Brisbane, Perth, Adelaide: is it really possible to get into the property market with a budget of only $400,000?

Whether affordability is your top priority or you’re just looking to snap up a ‘bargain,’ we look at which city can deliver more bang for your buck, and explain the typical costs associated with buying a property at this price point.

Affordability

Each capital city has varying levels of housing affordability. A budget of $400,000 isn’t going to go as far in Sydney as, for example, Perth or Adelaide property. You will likely have to compromise with a smaller property, likely an apartment, that is relatively far from the CBD.

Number of suburbs with an average housing price of under $400,000

 


According to CoreLogic data, Adelaide is the city where you’ll find the most suburbs with apartments or houses with a median price of $400,000. Brisbane comes next, followed by Perth. Melbourne has only two suburbs: Powelltown and Melton. Sydney has only one suburb with a median house price of $400,000: Mellong in the Hawkesbury, about 110km away from the Sydney CBD – which by all practical purposes can hardly be considered as part of Sydney!

The affordable middle

What the CoreLogic data doesn’t account for is the increasingly popular ‘middle option’: townhouses.

The latest Census data revealed that more Australians are choosing townhouse living; with townhouses accounting for 12.7% of resident homes in Australia, up from 9.9% in 2011.

Typically, townhouses provide a more affordable alternative to a detached house, with more indoor and outdoor space and privacy than an apartment, but without the cost and upkeep of a larger home on a big block. They also tend to be positioned in closer proximity to transport hubs, retail and other amenities compared with new house & land developments.

As an example, in Brisbane, investors can currently purchase a a brand-new 4-bedroom, 2.5-bathroom, 2-car space townhouse that is less than 20km from the Brisbane CBD for only $407,000.

What does holding a $400,000 property look like?

Once you have identified your property, it’s important to understand and factor in your property purchasing and holding costs.

For example, the ‘buy-in’ cost for the $407,000 new townhouse in Brisbane would be approximately $61,000. This includes your 10% deposit ($40,700), stamp duty ($12,670), solicitor fees ($1,500) and Lenders Mortgage Insurance (LMI) ($6,500).

This townhouse could achieve $415 per week in rent (an estimated 5.3% rental yield). For someone earning the median Australian household taxable income of $75,000 per year, this investment property would cost you about $31 per week, factoring in the assumptions below.

After tax benefits such as negative gearing and tax depreciation, the property would return a positive cashflow of $44 per week.

Interest only loan rate 4.5%
Council and water rates
(estimates using Brisbane City Council data)
$2,800
Insurance $1,000
Vacancy rate
(SQM Research data March 2019)
2%
Property management costs 7.5%
Accounting $200

“We know that it is possible to buy a quality property at the $400,000 mark, as we have a number of properties at this price point that we are currently recommending to our customers in each of the five major cities. But it’s important to make sure that property represents genuine value, is in the right location and has all the right ingredients for long term growth.”

Ironfish can recommend properties priced at the $400,000 mark in each of our major capital cities.  Ironfish works exclusively with developers who have a legacy of delivering quality properties. Each Ironfish recommended property is subject to a rigorous due diligence process. To access our recommended properties list, register your interest here.

“I used to think property investment was just for wealthy people”

 

Here at Ironfish, we are proud to practice what we preach. Many of our staff are property investors themselves, and have kindly agreed to share their individual stories and their own personal property investment tips. 

 

Chen Chen

Property Investment Strategist, Ironfish Melbourne Box Hill

“Before Ironfish, I always thought property investment was something only wealthy people could do. Now I am an investor myself, and I know this is simply not true. It’s something I love to advocate.”

 

CASE IN PROFILE

  • Former advertising executive
  • Migrated from China with little English
  • Joined Ironfish Box Hill as a Strategist in 2015
  • Purchased 6 investment properties

Starting a new career

Back in China, Chen Chen owned her own business – an advertising agency – which she started at age 28. Love brought her to Australia, after meeting and marrying her Australian husband, she moved to Melbourne’s western suburbs.

“Having a great career has always been important to me. But in Australia, as an immigrant with limited English skills, I didn’t have a lot of confidence in finding a decent job. By chance, I heard about Ironfish from an acquaintance, who informed me that it’s Melbourne’s largest property investment company. So I went along to a seminar and listened to Joseph Chou talk about career development and his experience of building a property portfolio. I found it very inspiring.”

“When Joseph came to Melbourne again, he held a big seminar at Deakin University. I arrived early and sat right up in the front row. Before the presentation even started, I picked up the pen and paper that was on my seat and on the spur of the moment, wrote down my wish to join Ironfish and my name and phone number, and handed it to the staff on the stage. The next day I got a call for a job interview – and the rest is history!”

Specialised services

At Ironfish we’re proud to be able to service our customers in multiple languages so Chen Chen’s lack of confidence in English was no barrier to success here. In fact, last year, Chen Chen was awarded Ironfish’s “Strategist of the Year.”

ironfish review

“It’s hard to achieve success in your career if you don’t have ambition. Without ambition it’s hard to push forward. Ironfish has given me a platform on which to help myself, help my customers, and have the satisfaction that comes from having my own career, being financially self-sufficient, paying taxes – making a contribution to my new home country.

“But when I first joined Ironfish, I didn’t know much about property investment, so I made up my mind to study harder than others. At the time, I lived in Melbourne’s western suburbs – a 100km round trip from the Ironfish office. I went in to the office 6 days a week studying and working at the same time. Later, I rented a house nearby to be able to focus on my career, and I haven’t had a holiday in four years!”

I practice what I preach

Chen Chen is proud of how far her hard work has got her in her career, and of her many customer success stories.

“But what I’m most proud of is that I ‘practice what I preach’ to my customers. The second day I joined Ironfish, I bought the first investment property in my life. I bought my second in my second month. I bought my third after 12 months, and now I own a total of six investment properties, with a portfolio value of over $4 million – with strong rental returns. Some of which are so highly sought after and tightly held that I’ve had industry peers ask me if I’ll sell onto them.

“Since I have greatly benefited from Ironfish’s investment strategy, I have drawn a strong belief and love for my career through my own investment success. It makes me more eager to pass on this knowledge to others, as it can truly change your life – it’s changed mine!”

Investment can work for someone ‘ordinary’ like me

Although Chen Chen has a solid portfolio now, she admits that she had never even considered investing in property before joining Ironfish.

ironfish review financial wellbeing

“What I previously thought was property investment was just for the mega-rich. For ordinary people like me, it seemed like something I could only dream about. After hearing Joseph’s presentation and later joining Ironfish, I started to understand investment concepts and strategies and after gaining this knowledge, I realised it was something many people can do. This helped me to overcome my lack of confidence and plan out my next steps.

“I was lucky that my first two investment properties built up some equity relatively quickly, which allowed me to refinance and purchase the third and fourth properties. Building a portfolio has become my first ‘bucket of gold;’ helping me to grow my assets and wealth over the long-term in Australia. If Ironfish hadn’t shown me how it was possible, I wouldn’t have the portfolio that I have today.”

Chen Chen’s property investment tips:

  1. Through my work, I’ve found most people’s obstacle when it comes to property investment is a lack of knowledge. In my opinion, the best way to solve this is to talk to experienced professionals – and just learn and learn more!
  2. I’ve also found that once people have decided to invest, they go straight to a real estate agent. A typical agent doesn’t really care whether this is the right property for you – they’re just there to ‘sell their goods’ – as a result, people can have a negative experience and get put off from the whole thing.
    But if you sit down with an Ironfish strategist, you will find that at Ironfish, we really care about your future. We will listen to your financial situation and goals. We’re happy to explain the investment process for you and identify a strategy to work towards your goals and budget.

Want to learn a little more about Ironfish’s investment strategies? Or simply have investment concepts and jargon explained clearly and simply? Book a free appointment with one of our experienced property investment strategists like Chen Chen in your city.

5 things everyone gets wrong about property investment

A message from our CEO & Founder, Joseph Chou.

The interesting thing about property investors is that so many do not associate buying a property with becoming financially independent.

So many investors let emotion guide their purchases, rather than making a strategic decision on what’s right for their portfolio.

Some bought in Sydney after the horse had all but bolted and are now worried about their investment after reading negative headlines in the newspapers. Others were in a position financially to invest, but didn’t, and therefore missed out on making any money in the last Sydney boom.

So many investors lack goals, planning, strategy, support, and ultimately – lack execution. Either because they spent weeks or months in researching without making a decision, or because they didn’t have the capacity to hold their assets for long enough.

These mistakes are all too common in my experience, both as an investor and from what I’ve observed in my years of working in the industry. And all these mistakes essentially boil down to one thing: having the wrong mindset when it comes to investing.

Your attitude and your approach to investing will have a significant impact on your long-term success as an investor. Without the right mindset, you’re likely to fall victim to one of the following five mistakes that I’ve seen so many other investors make.

  1. Lack of strategic thinking

Many people think: “this is how much I earn, and this is how much equity I have, so this is how many properties I can buy.”

Few people think: “I want to earn X amount of income per year from a portfolio of assets with a value of X” and work backwards from this goal to develop a strategy to achieve it.

On the other hand, there are many investors who do not acquire their assets strategically, but simply buy because of a perceived ‘bargain’ or discount on offer. With the current lending squeeze, you’ll find some developers offloading properties at a discount. But maybe those properties were wrongly priced to begin with – and even at a discount still don’t represent value. If you want to achieve long term capital growth, the key is to think where affluent people will want to live – a poor quality, cheap apartment next to a railway line is probably not the one!

It’s also important to have the right strategy in place for you. For example, I know there’s many people who do small property developments and renovations.

But many investors aren’t cut out for DIY – either because they’re not passionate about it, they don’t have time to do it or they have no expertise.

Many don’t want to get their hands dirty or have the project management experience to manage tradies and stick to a budget. DIY also requires cashflow upfront to do it.

property investment tips

With investment, you don’t need to be an expert; and you can’t be if you are working at the same time at another career. I’ve been in the industry a long time, but I still rely on the expertise of others – our Ironfish Managing Directors, our Property & Research team. I also have my own team of solicitor, accountant and broker as well.

Think strategically about how you are spending your time and money, what you are buying and why is this going to add value to you over the longer-term. If you’re unsure, look to a specialist for help and build the right team around you.

  1. Short-term thinking

In my experience, property is a forgiving asset – if you give it enough time. If you paid ‘too much’ for a Paddington [Sydney] terrace back in 1964 – say $11,000 instead of $10,000, would you really be too worried about that today?

The key to successful investing is to turn a short-term property purchase into a long-term asset. Yet, many people fail to realise this is easier said than done.

What many investors expect or want is a nice cheap property, quickly rented out, no bad tenants and fast growth. But it doesn’t work this way. The journey to wealth is meant to be bumpy – and it takes time. If it were easy, it wouldn’t have value and everybody would be wealthy.

The other problem is most people around you, including the media, will be judging property by its short-term performance. I got asked by an investor magazine to provide an example of a property that’s provided a 300% return in six months. While it may be possible to produce such an example, the truth is you need to be holding that property well before the market starts heating up. Because I can assure you that by the time you hear that the market’s heating up, you’ve already missed the boat on achieving the biggest results.

property investment tips

I had a customer, a Qantas pilot, who is a long-term investor, who owned seven properties, including a 1-bedroom in Bondi Beach which he bought in 1991. For five years there was zero growth, most people told him that he’d paid way too much for it and that it was a bad investment. During these times, many lose faith, and sell at a loss. But my friend had a long-term mindset, so he held it. In 1996, the property doubled in value. People may say, well why not just buy it in 1995? But the truth is no one can predict these things so precisely, and by the time you read about it, it’s already too late.

Buying a property is relatively easy, holding it is the hard part. Many investors, when they experience longer than expected vacancy, a bad tenant, no growth – they give up too soon. Short term growth is great for confidence, or for building up your equity but it’s not always going to work that way. Professionals can help you keep the faith during challenging periods.

  1. Listening to the wrong people

People tend to listen to the people closest to them because they trust them, such as friends or family. But if these people have no experience in investing and no results to show you, then there’s little value in seeking their opinion or advice.

People also tend to listen more to negative people or the media. But I’ve never met one person who became successful from following the media!

Property is a big-ticket item, it makes sense that you want to do your research and due diligence to ensure you’re confident about your decision. But just make sure that you’re not taking financial advice from a financial planner who hasn’t got his/her own finances in order!

If you’re looking to build wealth through smart, structured property investments, learn from someone who has done it before. Only listen to people who can help you learn more, grow and pull you forward towards your goals.

  1. Saving vs earning mentality

Some people have the ‘saving’ mentality – rather than an ‘earning’ mentality. This group of investors look to save a few pennies by self-managing their property or do a renovation to add a little bit more to the rental price.

property investment tips

Think of property investment as a business you’re building, and you are the CEO. Get other people, the ones with the expertise to do the work for you. While you’ve got your team managing your business, this leaves you free to focus on your own work. Better to spend that time growing your own career, increasing your value at work and your income.

I had a lady meet up with me recently, who came along to one of my seminars 10 years ago. Since then, she’s built a portfolio of four houses which have doubled in value. She did this on her own; she didn’t purchase with us. She did all the inspections and searching herself and has managed to achieve a lot more than most people.

But recently, she’s had to sell one of those properties, because whilst she’s now ‘asset-rich’, she remains ‘cash poor’ and has low serviceability.

I said to her, “You’ve done a great job, but I think if you’d sought our help you could have done a lot better. You could have leveraged our time to build and manage your portfolio, leaving you free to focus on growing your own income and career to improve your serviceability and potentially even build up more assets.”

There’s no point winning the battle only to lose the war!

  1. Knowledge without action

Over the years, I’ve met many people who have been to every seminar, done all the research, read every report – and yet, have done very little, or perhaps even nothing with their knowledge.

Knowledge is there to be applied, otherwise what’s the point of knowing?

Some people tell me proudly that they’ve personally inspected hundreds of properties or talked to hundreds of agents. But frankly, this tells me that this person has no respect for their own time.

It also tells me that while they may think they know everything, they’re scared to make a decision. Once you make a decision it’s easier to move forward. Successful people tend to make decisions quickly and change their minds slowly.

While some may not buy anything, others may buy too much – jumping on the bandwagon because everyone else is. Then later they are faced with the problem of being unable to service their mortgage and hold onto it.

In the last 13 years, we’ve helped many investors build their portfolio, and in the meantime, they have doubled their income – increasing their cashflow for today and tomorrow. Many of these investors managed this achievement simply by having the seed planted that it could be done.

Because it’s not that people don’t want to grow their income – either through their career or through building a portfolio – they just don’t know how to. So they go with the flow, do what everyone else is doing and encounter the inevitable pitfalls.

Based on my personal experience, I can say unequivocally that if you harness the right mindset or mentality as an investor then this is the one thing you can do to set yourself in good stead for longer-term success.

Joseph Chou is the CEO & Founder of Ironfish, a qualified financial planner and highly experienced investor. He writes monthly for the Ironfish blog, shares his property investment tips on Ironfish Insta and Facebook, and presents regularly around Australia. See where he’s speaking next in your city.

 

SEQ City Deal set to bring up to $58 billion for the region

A new City Deal has been announced for the South East Queensland (SEQ) region which could contribute up to $58 billion for the local economy.

The SEQ City Deal is a partnership between Federal, State and Local Government to align planning, investment and governance of the region to deliver better transport connectivity, more jobs and liveability to support the region’s population growth. Once negotiated, the SEQ City Deal will be the largest City Deal in Australia.

Modelling by KPMG has shown an SEQ City Deal could stimulate an increase of up to $58 billion by 2041 for the regional economy by improving its productivity and competitiveness.

One of the fastest growing regions

According to the Australian Government, SEQ is experiencing one of the highest rates of population growth in the country.

South East Queensland’s Population Growth

 


In March this year, Minister Tudge, Deputy Premier Trad and Lord Mayor Quirk agreed on governance arrangements for the deal negotiations and signed a Statement of Intent.

The Statement of Intent outlines a shared vision from all three levels of government for the SEQ Deal, centred on six priority areas: Connecting Infrastructure; Jobs and Skills; Liveability and Sustainability; Housing and Planning; Digital; and Governance and Leadership.

“South East Queensland is already home to over two thirds of the state’s population and is expected to accommodate 5.3 million people within 25 years’ time,” said Minister for Cities, Urban Infrastructure and Population, Alan Tudge.

“We need to cater for this rising population and the SEQ City Deal will be a huge step forward in making sure the people of South East Queensland get the most out of living in this beautiful region.”

south east queensland SEQ investment

Image source: Queensland Government

Some of the propositions for the SEQ City Deal, put forward to the Commonwealth Government by the Queensland Government and Council of Mayors (SEQ) include six ‘game changers’ for the region:

  1. Build on Cross River Rail and Brisbane Metro to move SEQ towards a 45-minute region by delivering the next wave of Rail and Metro projects to connect key activity and growth centres.
  2. Supercharge an SEQ Trade and Enterprise Spine between the Toowoomba Trade Gateway and the Australia TradeCoast by connecting Inland Rail to the Port of Brisbane and unlocking new jobs in the south-west and western growth areas.
  3. Ignite nationally significant Innovation Precincts to deliver more high-value, knowledge-intensive jobs through enabling-infrastructure and a culture of innovation and entrepreneurship.
  4. Establish SEQ as Australia’s leading Smart Digital Region by leveraging the new International Broadband Submarine Cable to deliver a Digital Trade Hub and taking a region-wide approach to data and digital connectivity.
  5. Deliver and secure better recreational spaces and landscapes for the growing region, including through a new tripartite Liveability Fund to co-invest in critical blue and green infrastructure.
  6. Deliver greater coordination and collaboration between federal, state and local governments, including a new tripartite Regional Coordination Board to support strategic governance for the region.

The next 12 – 18 months will involve negotiations between the three levels of government and community to finalise the SEQ City Deal.

Keen to invest in South East Queensland? Register to access our Ironfish recommended properties in SEQ. 

 

 

What’s the cost saving for public vs private school?

Parents can save up to $750,000 in school fees for choosing public education over private a new study has shown.

A study on the typical costs for a public education versus a private education across Australian metropolitan regions was conducted by the Australian Scholarships Group (ASG) in collaboration with Monash University in early 2019.

The study factored in tuition costs, uniforms, transport, devices and other related education expenses over a full 13 years of primary and secondary schooling if a child were to start school in 2019.

Based on Census data for the average number of children per family in Sydney (1.9), Brisbane (1.9) and Melbourne (1.8), the total savings for choosing public over private schooling were $751,505 for Sydney families, $662,018 for Melbourne families and $254,617 for Brisbane families.

Total education costs for public vs private school

Of the eastern capital cities, for private education, Sydney was ranked as the most expensive per child with a total education cost of $461,999; followed by Melbourne ($438,391) and then Brisbane ($209,609).

Comparatively, for public schools, Brisbane recorded the highest overall public education cost ($75,600), followed by Melbourne ($70,603) and then Sydney ($66,470).

The study was based on data sourced from 2,300 members from the ASG regarding education costs, as well as publicly available information on school fees from the Good Schools Guide and My School online resources.

Strong demand for a good school catchment area

With the cost of schooling representing such a significant portion of household expenses, it comes as little surprise that properties located in top public school catchments are highly sought after.

Strong demand can add pressure to property prices in desirable catchment areas and factor into investor decisions.

“Buying in the right public school catchment zone can be a top priority for many families who either can’t afford or prefer not to send their kids to private school,” said Ironfish Head of Property, William Mitchell.

“It’s interesting to see how a property’s investment performance may be influenced by the public school catchment zone it falls in – and the relative demand for properties situated in a preferred school catchment area.”

‘If a family knows they’re going to save $750,000 for Sydney school fees– how much more will they be prepared to pay to get into a top quality public school catchment suburb over an adjacent suburb not within the same catchment zone?”

Want to learn more about the fundamental drivers for property performance in Sydney, Melbourne, Brisbane, Perth or Adelaide? Download our latest quarterly market report.

“Attending many seminars helped build up our confidence to invest with Ironfish”

Eric Luo & Mandy Yang

Accounting, Insurance industry professionals

“Attending many of Ironfish’s events and seminars was not only educational and informative, but also helped us build up our confidence about Ironfish as a company to invest with.”

CASE IN PROFILE

  • Experienced investors
  • Invested for tax purposes
  • Purchased one property with Ironfish
  • Building and growing their wine business on the side!

A passion for property – and wine

Eric and Mandy migrated to Australia from China over 10 years ago. Mandy is an accountant, while Eric has had a more varied business career, currently working in the insurance industry. His true passion, however, is Australian wine and he has started a wine business in his spare time. Prior to investing with Ironfish, Eric and Mandy were already property investors.

“We came to Australia when were in our mid-30s, so we knew we wouldn’t be able to rely on the pension or superannuation alone for a comfortable retirement. We always thought it was important to invest in property or the share market once we had saved some money.

“Before investing with Ironfish, we had already got started with property investment, primarily for negative gearing purposes.”

Building confidence and trust to invest

Eric and Mandy heard about Ironfish through a local newspaper. Mandy later met Ironfish Senior Property Investment Strategist Aidan Zhu at a Chinese community social event.

“Aidan invited us to an Ironfish Brisbane event and later a seminar presented by [Ironfish CEO] Joseph Chou. We’ve since become good friends with Aidan and his wife Irene, as well as many of their colleagues at the Ironfish Brisbane office.

“We’ve been to many more seminars and events since then and the experience is always very educational and constructive. The most important thing is that attending these events helped build up our confidence about Ironfish.”

A new home and an investment property

After joining Ironfish Brisbane’s ‘True Wealth’ VIP customer program, Mandy and Eric had the opportunity to view some of the finished properties that Ironfish had recommended to customers in the past. The quality impressed them both.

“After we were shown some of [property developer] Aria’s previous works, we had the confidence to go ahead. We purchased one apartment in Aria’s ‘Valencia’ building. We ended up deciding to move into Valencia instead of renting it out, which we love as the location is so convenient for work. Aidan helped us a lot with property selection.”

Service – above and beyond

Eric and Mandy have been very happy with their Ironfish service experience, right through to settlement and property management.

“Aidan is friendly, professional, constant and always provides a high level of service. All aspects of our experience with Ironfish has been great, with no problems at all. Additionally, Aidan and Ironfish Brisbane have been very supportive of my wine business, helping me to set goals and even hosting some of our wine club events. I think Ironfish staff have also grown a lot of their knowledge about wine from these events – so it has been a great opportunity for a knowledge exchange!”

The future

Eric and Mandy are glad to have started building on their property portfolio, and are keen to expand it further if possible.

“We’re planning to expand as long as it’s supported by consistent income growth in the next several years. The biggest challenge is always how to increase our income to sustain a long-term investment plan. We’re keen to invest more in Brisbane but would love to consider other cities as well.”

Eric and Mandy’s property investment tip:

“Listen and observe. It’s important to listen so you are learning more, but to observe means you are thinking and making your own decisions independently.” 

Keen to read more Ironfish reviews from our customers?

We have many inspiring customers who have generously shared their investment experience and property investment tips for the benefit of others. Click the links below to read more.

Which Australian city has the best universities and lowest housing costs?

Australian universities have a global reputation for excellence, with many of our universities ranking in the global top 100 or top 50 rankings.

Perhaps unsurprisingly, our universities are attracting a growing number of international students. In fact, Australia is now the fourth most popular country in the world for international students and the sector added $28 billion to our economy in the last financial year.

Enrolments across our universities are growing – from both domestic and international students – with Sydney and Melbourne, our two largest cities, representing the largest share of university enrolments out of all our capital cities.

Sydney and Melbourne also account for four of the seven Australian universities ranked in the QS World University Rankings top 100, with Canberra (ANU), Brisbane (University of Brisbane) and Perth (University of Western Australia) taking the other 3 spots.

The great rivalry – Sydney vs Melbourne

Sydney and Melbourne are known for a longstanding rivalry. Sydney has sunshine, beaches, the harbour, the biggest economy, the largest population and the oldest and arguably most iconic university campus.

sydney university

Melbourne is the nation’s cultural and sporting capital, with a population that’s set to outpace Sydney’s by 2026 and a university that outranks Sydney: The University of Melbourne.

Sydney and Melbourne’s global top 100 universities

  • The University of Melbourne ranked 39th in the world
  • The University of Sydney ranked 42nd in the world
  • The University of New South Wales ranked 45th in the world
  • Monash University ranked equal 59th in the world.

While higher education enrolments are up in both NSW and VIC, the latest data from the Australian Government shows that it’s our Victorian universities that are showing the strongest upward trend in enrolments.

Higher education student enrolments (domestic and international)

 

Our Victorian universities are also the most popular for international students. In the 2017 financial year, NSW added 129,653 international students. During the same period, Victoria added 156,952 international students.

Perhaps more significantly, since 2005, Victorian universities have outpaced NSW’s international student enrolments by a significant margin.

International student enrolments

 

Cost of living

Apart from its higher-ranking university, Melbourne also offers another appealing factor for students. Compared to Sydney, renting a home in Melbourne is significantly more affordable.

 

Students in Sydney would have to pay a 24% premium to rent a house, or a 29% premium to rent an apartment, compared to Melbourne. This is despite Sydneysiders earning only a 13% premium compared to Melbournians.

For a student who wants to live within walking distance of their university of choice, despite a pullback in the Sydney market, there is still a premium for living and studying  at the University of Sydney as compared to the University of Melbourne.

Renting within walking distance of University of Sydney vs University of Melbourne

 

“Higher education is a big business for Australia. Over $10 billion for the NSW economy and over $9 billion for Victoria. With Sydney and Melbourne universities offering a comparable global reputation, it will be interesting to see where students will choose to study, given the rental premium in Sydney,” said Ironfish Head of Property, William Mitchell.

“This is a trend Ironfish Research will continue to watch, as we expect property in close proximity to top universities to benefit from the growing higher education sector.”

 

Want to learn more about the Sydney and Melbourne property markets?

A tour of the world’s second most liveable city – Melbourne

At Ironfish, we can make property recommendations across all the five major cities of Australia and we have our own specialist staff located in each of these cities: Sydney, Melbourne, Brisbane, Perth and Adelaide.

We also regularly invest in training of our strategists to ensure our staff are up to speed on the latest property market research and trends and have intimate knowledge of each of these cities – not just their home city.

Recently, our Head of Property, William Mitchell, took our Ironfish North Sydney and Burwood strategists on a tour of Melbourne.

The team explored the inner-city suburbs, stood at the top of Melbourne’s tallest tower and wandered through the epic stadiums that represent Australia’s sporting heart.

There was also the opportunity to devour delicious food right next to the Yarra River and enjoy an amazing coffee (or two) in some of the coolest cafes in Melbourne.

“Many of our investors may live in Sydney, but wish to take advantage of the Melbourne market,” said Ironfish Head of Property, William Mitchell. “They also don’t necessarily have the time or desire to travel down to Melbourne themselves before they invest.

“Our national reach means our customers can invest with confidence in another city, whether that be Melbourne, Brisbane, Adelaide, Perth or Sydney without needing to visit the city first. We continue to invest in training and tours for our strategists, so they can gain a ‘local’s knowledge’ of living in another city, which can in turn, help their customers.”

Melbourne is currently Australia’s second largest city, and on track to outpace Sydney as Australia’s most populous city by the 2030s.

Want to learn more about investing in property in Melbourne (or simply find out where you can get Melbourne’s best coffee)? Book a free appointment with your local Ironfish property investment strategist, who will be able to answer all your questions!

What’s the one factor that will turn the property market around?

This morning, Ironfish CEO & Founder Joseph Chou joined several key industry titans in a panel discussion at the Credit Suisse annual residential property market conference.

Attended by over 80 Credit Suisse investors, including fund managers in equities, the panel of experts shared their views on the current property market, lending and new trends.

Panellists came from a range of sectors within the property industry representing companies such as ANZ, Mortgage Choice, Probuild, Multiplex, Mirvac, GreyStar, Boral and Crown Group, at CEO, Director or General Manager levels, providing unique expertise and insights from ‘the coalface’.

Joseph Chou sat on a panel with Crown Group Chairman Iwan Sunito and Metro Property Managing Director, Luke Hartman. Mr Chou shared some of Ironfish’s unique services and processes that have ensured our continuing growth and success, despite a slowdown in the Sydney and Melbourne markets.

“For us, the key is that we partner with our investors for the long term; helping them not only to build a portfolio, but also to hold that portfolio for 10, 15 or 20 years to achieve their investment goals and retire on this income along with their super,” said Mr Chou.

“Our national reach means we can also help our investors to take advantage of other market cycles, and now more than ever, properties we recommend must have owner-occupier appeal, and not ‘investor stock’.  

“Crucially, we put a lot of customer services, education and processes in very early on to help guide our investors and really hold their hand through to successful settlement.”

Mr Chou also noted that the partnership and trust developed with our customers helps keep our investors focussed on their long-term goals, without being swayed too much by sensational media headlines.

Mr Hartman agreed, saying, “I’m doing the opposite of what the Fin Review is telling me to do. Right now, I’m actively looking for sites [to purchase]. With Chinese companies exiting the market and greatly reduced supply, it’s opening up new opportunities.”

He also added that generalisations about market downturns are not helpful for investors. “You might hear someone say the US property market is down but try buy an apartment in New York… There are so many sub-markets – and of course, each development is different as well.”

Mr Sunito also noted long-term thinking as a similarity with Crown customers, stating: “our buyers are pre-conditioned to think of property as a long-term investment and they are looking to invest ahead of the game, for a longer time in the market. For us the key is location – Sydney is a global city, the factors that make a property valuable: quality, proximity to CBD, views, light – these will always be in demand.”

The million-dollar question

The final question asked by the panel moderator, Kateryna Argyrou, Credit Suisse Head of REITs, was perhaps the ‘million-dollar question’ for the audience.

“In your opinion, what’s the one factor that will turn the property market around?” Ms Argyrou asked.

Each of the three panellists offered a unique opinion.

Joseph Chou, Ironfish CEO & Founder:

“I think availability of lending will be the crucial factor. We have a strange situation where on the one hand we have banks willing to fund construction of new [residential] developments, but not funding property buyers.”

Luke Hartman, Metro Property Managing Director:

“I think government incentives will change the market. I lived in Melbourne at a time when there were significant first home buyer incentives introduced which changed the market; NRAS was another scheme that impacted the market. I think this will be more important than something like interest rates.”

Iwan Sunito, Crown Group Chairman and Group CEO:

“Personally, I think it’s already happening right now; with interest rates, government infrastructure spending, low supply. It’s already happening – there’s nothing else needed to do.”

Want to learn more about investing in property in Sydney, Melbourne, Brisbane, Perth or Adelaide? We have many investor resources online:

  • Download our latest quarterly market report

  • Watch our latest property market updates

  • Follow our blog and monthly newsletter for the latest messages from our CEO, Joseph Chou.

Ironfish recommended apartments win best in Australia

Congratulations to all our investors in “Oxley + Stirling,” a luxury apartment building in Brisbane developed by Aria Property Group.

Oxley + Stirling has taken out top national honours at the recent Urban Development Institute of Australia (UDIA) Awards, winning Best High-Density Development in Australia.

This year’s win marks three years in a row that Aria Property Group has won the award in this category – the first time a developer has ever managed to achieve this feat.

“Since the national awards program started in 2001, no single developer has won any category two years in a row and it’s so humbling for myself and all of the Aria team to be announced as the winner of the award three years in a row,” said Aria Property Group Managing Director and Founder, Tim Forrester.

“All of this is only possible due to Aria’s longstanding partnership with Ironfish.  We will never, ever let Ironfish customers down and will always strive to deliver the best projects in Australia and the world.  This is only the beginning.”

The building was judged against 80 developments nationwide.

Aria is known for pushing the envelope in communal spaces in their buildings; Oxley + Stirling has its own Residential Rooftop Club with infinity pool, private dining room, theatre room, fitness centre, reflection pond, sunken lounges, barbecue areas, in addition to a residents’ library and wine cellar.

Oxley + Stirling also carries Aria’s signature residents’ services including concierge, personal training, yoga classes, fresh fruit and bicycles, as well as community groups in the building.

 

 

“Aria’s mission is to deliver properties which they will be proud to walk their families past in 20 years’ time. This commitment to quality, legacy and a desire to continually raise the bar higher is a commitment we share at Ironfish,” said Ironfish Director, Property & Research, Grant Ryan.

“Our aim is to help our investors build a portfolio of great properties in great locations – properties which we know investors will be proud to hold over the long term or perhaps even pass on to future generations. We have no doubt our Oxley + Stirling investors are as proud as we are to be associated with a building of this calibre. Congratulations again to Tim and the entire Aria team for creating a new Brisbane icon.”

At Ironfish, we work exclusively with developers who share our commitment to quality;  properties we recommend to our investors are subject to a rigorous selection process.

If you’d like to see which properties meet our high bar, you can register to access our list here.

 

How can I improve my career growth?

A little career advice from our CEO & Founder, Joseph Chou.

Last year, I helped my nephew, a recent university graduate, earn $200,000 in his first year.

Like many ambitious young people, my nephew had managed to do well at university and had secured himself a role at KPMG, which he was all set to take – until I convinced him not to.  Or more accurately, until I broadened his mind to larger possibilities.

For those of you who have come along to one of my seminars, you will know that one of my biggest passions is working with people. And more specifically, helping people build bigger dreams and then understand how to go out and achieve those dreams.

My nephew had dreams, but they were still well within the conventional scope – a global brand, a good starting salary and the ability to progress up the ranks over time.

While he is smart and ambitious, he is also young, with limited experience of working with people.

I often say that everyone needs to learn sales skills, at the very least, because you’re going to need to sell yourself at a job interview or for the next leadership role. But the truth is, having “sales skills” doesn’t have anything to do with “selling” at all, it’s actually about knowing how to communicate effectively with people.

My nephew took this advice, and instead of the KPMG role, he decided to spend a year in Australia (he lives in China) working at a retail property sales company. While I didn’t offer him a job at Ironfish – we tend not to hire family members so as to keep our company culture entirely based on merit – I did agree to be his mentor.  

We met once a month, and I would give him training and career advice. The first thing I said is that it’s important to trust me. “There’s no point asking me to be your mentor if you don’t trust my experience and my judgement. So please, just follow my advice exactly, and you will get results,” I told him.

“Secondly, let’s set a goal: to earn $200,000 this year – the equivalent of RMB1,000,000.”

He worked hard, though to be honest, he probably only worked at about 70% capacity – and still, he managed to meet his goal of earning $200,000 in his first year.

Two weeks ago, my nephew returned to China with a number of job interviews already lined up. After his year in Sydney, he has not only gained so much valuable experience of working with people, he also has a great story to tell at his job interviews.

Imagine turning up to an interview along with hundreds of other graduates, except that you can say, “in my first year of work experience, I earned $200,000.” Suddenly, you stand out.

While not everyone is looking to move into sales, the underlying principles of his success are universal.   

  1. Identify your career goals

Most people, when they start out in their career are looking for one of three things:

Security

Perhaps by looking for a job at a large organisation or the government. However, job security may come at a trade off with limitations as to how far you could progress.

Prestige

A Fortune 500 company or a globally recognised brand. These types of companies tend to attract very talented people. But the culture of the organisations doesn’t tend to support ‘exceptional’ growth. Many successful people might reach a bottleneck in their career, and find their dreams, income and career growth will plateau after a while.

Opportunity

To grow skills, responsibility and income; for this goal, a smaller organisation may be better suited. In smaller organisations you will be required to wear more hats, multi-task more and take on responsibility more quickly.

If you’re planning a new career, my first piece of advice would be to identify what your career goal is. This will help you narrow down the options of what type of company you may want to work for.

how can i progress my career

Are you looking for security, prestige or opportunity in your career? Identifying your career goal is the first step.

  1. So how important is money?

A great starting salary can be very tempting, but if you’re looking for opportunity or growth in your career, it shouldn’t be a top concern. In fact, I’d say, don’t worry about your starting salary at all. Instead, if you get to your interview, when it comes time to ask questions of your interviewer ask them these questions:

  • What is the organisation’s vision and values?

If you’re ambitious, there’s no point working for a company without a vision for its future. As we often say, if you stop dreaming you stop learning and if you stop learning you stop growing as a person. The same applies to a company. You also want to ensure that you’re going to be putting all your efforts in for an organisation that means something to you. Do you align with its values? Is it a workplace you can be proud of?

  • Is there a good working culture here?

Is it a collaborative culture, where people help to build each other up? Is it a happy place to work – consider, you’ll spend 8 hours a day at work, the workplace culture is important.

  • What kind of person is my boss – what are his or her achievements?

Does your boss have good values; can you learn from them; do they have a generous outlook and are willing to share opportunities or is it just about profits at all cost?

  • Who is in the team – who will I be working with?

Will you be going home with a smile, or bringing home negativity from work? What are your team members like? What are their achievements, what can you learn from them?

Or if you’re thinking of going into business with someone, do you have shared values and vision. If a partnership – of any kind – is formed on short term things like money or looks, it’s not going to last.

  • If I give it everything I’ve got, is there room to grow?

This is an important one: as long as the company you choose provides a platform for growth if you prove yourself, then your starting salary doesn’t matter. Consider the long-term potential instead.

  1. Adding value

I am a big believer in adding value. Imagine if you’re renovating your house, and you have a tradie come to fix the plumbing. You then discover there is an electrical issue, and your tradie has the option to say: “hey that’s not my job,” forcing you to search around and book in another tradie. Or they might say, “oh I know someone who could do that for you” and organise to get it done. Most people are very willing to pay for the service.

how can i progress in my career

Look for ways to add value to the business; have an ‘owner’s mentality’ to your work.

If you can add value to the business that is quantifiable, sooner or later people will start to recognise your value and will reward you accordingly.

I often say to people, “If you had invested $1 million of your own money into the company you work for, would you work differently?”

No doubt, the answer will always be yes. Having an ‘owner’s mentality’ will transform the way you work, and this will help you stand out.

Many people ask me, but what if I do all the above, give it everything and I still don’t get the recognition? If that’s the case, it’s still not a problem, because your time has been well spent; you’ve learned so much, you’ve grown so much, and you have results that can be replicated again at another organisation that values your contribution more!

How long should I stay? / Why should I leave?

Once you’ve been with your chosen company for some years, the next thing many people consider is whether to stay or whether to move on.

Most people will stay with a company if their needs and goals are being met. They will leave when they’re bored or they don’t like the people anymore or they didn’t get a pay rise.

The right team

Having the right team around you is essential. You’re at work for eight hours a day; you want to be with people you like, share some laughs, share the workload. You don’t want to go home with nothing left in the tank. For me, working with the right people is so important. If I don’t like the people and don’t feel confident that we’re aligned in our values, then we don’t do business with them, no matter how good the deal might be.

That said, no matter where you go, you’re going to encounter people who are difficult to work with. You could change jobs to avoid certain people but there’s no guarantee you won’t have the same experience at your new workplace. What’s better is to improve yourself – learn how to work with people. Find ways to work with people’s strengths rather than their weaknesses.

If you can understand people’s intention it can help you see beyond the behaviour and remain calm. Life is all about finding ways to solve problems.

Are you still dreaming?

If your problem is that you’re bored, then you’ve probably stopped dreaming. Everyone needs a dream in life, it makes life interesting and purposeful. It keeps us focussed and helps us to elevate our lives above an endless repetition or routine.

Every time you work, you’re creating your life story. Think about it – are you realising your full potential? This may be especially relevant to those who’ve already been working 10 – 15 years, are earning a good income, but have plateaued. Without the right mindset it’s hard to break past that.

More money?

If you decide to move companies to get a payrise, it may add an incremental amount to your income, but it’s not going to dramatically change the way you are valued in an organisation over the long term.

Instead, find ways to add value, think like an owner, approach your work as a career – not a job, improve yourself, your communication and leadership skills – ie the way you work with people – these are the fundamental factors which will drive your career success, your personal career satisfaction, and of course, your income.

 

Joseph Chou delivers workshops on career, mindset and investment at a range of events and seminars around the country. Many of these events are free to attend – book your seat at Joseph’s next speaking engagement here.

 

What does the NSW election mean for Sydney property investors?

The Coalition has won its third consecutive term in NSW government, led by its first female elected Premier, Gladys Berejiklian. The Coalition win has been largely welcomed by property investors, due to two key policies, which while not directly impacting property, are underlying drivers for market performance over the longer-term in Sydney.

  1. Transport infrastructure in Sydney’s growing west

Transport was a key theme in Premier Berejiklian’s pre-election promises, with the announcement of new key transport projects set to directly benefit Sydney’s western suburbs.

In recent times, a large part of NSW’s infrastructure planning has been guided by the Greater Sydney Commission’s Three Cities Strategy, which delivers concentrated benefits to the Sydney’s West and South-West regions to support the Western Sydney Airport planned to open in 2026.

One of the main election promises was the delivery of the Metro West project — a new rail line from Parramatta to the CBD which is expected to commence construction in 2020 and cost $18 billion in total.

The Government also promised additional Metro rail routes which are expected to commence planning over the next four years. They include:

  • Westmead to Western Sydney Airport
  • St Mary’s to Rouse Hill
  • Western Sydney Aerotropolis to Macarthur, and
  • Bankstown to Liverpool.

Future Metro routes

Sydney property prices

Image source: Liberals NSW

Roads were another key spending area, with commitments to upgrade arterial roads such as the M5 through Sydney’s South-West and the M4 to Sydney’s west.

Outside the west, the Government also promised to start building the Northern Beaches tunnel (now known as Beaches Link) in 2020. The $14 billion Beaches Link project is a proposed tunnel linking the Northern Beaches to the Warringah Freeway and south across the harbour the Western Harbour Tunnel to Westconnex.

According to the NSW Government, the Northern Beaches Tunnel will reduce travel time by:

  • 41 minutes: Dee Why to Sydney Airport
  • 27 minutes: Brookvale to the CBD, and
  • 13 minutes: Olympic Park to North Sydney.

Beaches Link entry and exit points

Image source: ABC.net.au

Construction of the Beaches Link is expected to begin in 2020, however this is still subject to planning approvals as well as finalisation of financing and procurement arrangements.

  1. Economy and Budget

Prior to the election, the State Pre-Election Budget release showed positive signs despite house price pullbacks in Sydney.

Projections from the NSW Treasury showed that the 2019 financial year state budget would be in surplus by $846 million.

Future forecasted surpluses for the State are expected to average around $1.3 billion over the next four years.

The NSW Treasury expects state economic growth to trend at 2.5% annually over the following three years.

The jobs market is expected to remain healthy buoyed by infrastructure spending. NSW Treasury modelling released in March 2019 showed that public infrastructure spending will support more than 100,000 direct and indirect NSW jobs each year over the next four years, translating to 400,000 jobs to 2023.

The unemployment rate was 4.1%, corresponding to a seasonally adjusted unemployment rate of 3.9% – the best result in more than 4 decades.

NSW’s net worth remains the highest of any state or territory in Australia. The state’s net worth is projected to grow to $312.3 billion by June 2022.

According to the latest CommSec State of the States report (released January 2019), NSW is now tied with VIC as the best performing state economy.

The NSW economy has benefited from solid population growth and strong job markets which helped to drive retail spending and business investment.

“Sydney property prices continue to be a major point of concern for many investors, yet the NSW economy remains strong, jobs growth is healthy, and the State Government is continuing its commitment to deliver the infrastructure needed to support rapid population growth along Sydney’s west, South- and North-west,” said Ironfish Head of Property William Mitchell.

“The Sydney market is currently being impacted by affordability and access to credit off the back of the recent credit crunch. When access to credit and wages growth improves, this is when we would expect affordability to improve and when we’d see a more buoyant market.”

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