Purchasing a small inner-city apartment or bedsit could be “almost impossible” according to Scott BJ, principal of Scott Banister-Jones, because most major banks and lenders won’t lend against properties smaller than a certain size.
Mr Banister-Jones said that there was a “huge” demand for bedsit properties from first home buyers and investors because they were cheap and close to everything.
“But unless you’ve got cash it’s almost impossible to buy because the banks won’t lend to you,” he said.
Urban forests are boosting Perth’s property prices.
A large-scale economic analysis of the Perth metropolitan area, conducted by UWA’s School of Agriculture and Resource Economics, UWA’s Centre for Environmental Economics and Policy and CSIRO, has found that broad-leaved trees on suburban street verges increase median property value by more than $16,000.
May regional areas offer higher capital gains and more favourable rental returns, yet investors often seem reticent about stepping beyond capital city boundaries.
Real Estate Institute of Australia and RP Data figures show that Newcastle outperformed Sydney during the past five years in price increases and rents:
- Regional areas can produce better returns
- Not all towns are equal
- Look for diverse source of industry
Census figures are showing a steady increase in the number of people who are choosing to become tenants instead of property owners.
This is very good news for those looking to invest in property, because it means there is a ready pool of people looking for a home to rent.
Credit unions, building societies and other mutual institutions offer significant mortgage savings, but the majority of Australians are unaware of these benefits, according to a new survey by The Australia Institute.
Standard variable interest rates for the mutuals have been consistently lower than those of the big four banks in recent years.
For an average loan, this can add up to savings of as much as $76,000 over the life of the loan and reduce the repayment period by three years, which would be great for property investment.
In encouraging news for Western Australian property investment, Perth prime office rents have grown at more than three times the national average over the year to September, according to the latest CBRE national office market report.
Spurred on by better economic growth and resources-led demand for office space, Perth net face rents have risen 12.9 per cent between September 2011 and September 2012, compared with a national average growth rate for major capital city office rents of just 3.9 per cent.
Recently property investment related figures from property research specialists RP Data-Rismark showed Perth house prices up 0.9 per cent for the October quarter and up 3.8 per cent year-on-year to a median of $475,000.
And according to preliminary figures from the Australian Bureau of Statistics, Perth’s house price index experienced a 1.8 per cent rise in the September quarter to a median of $489,000.
Confidence seems to be slowly returning to the most unlikely part of the property market — the top end — at the same time as prices are on the way down.
The value of houses and apartments in Sydney dropped 0.9 per cent last month, but according to RP Data-Rismark, the best performing suburbs across all capital cities last month were the top 20 per cent, which outpaced the middle and bottom.
While property investment rates remain steady, new capital expenditure figures show there is a lot more investment in mining yet to come. New private capital expenditure rose by 3.4 per cent in the June quarter, matching market expectations, and the ABS’s third estimate of planned expenditure for 2012/13 is 20.8 per cent higher than the corresponding estimate for 2011/12. JP Morgan Australia chief economist Stephen Walters said two-thirds of the planned investment for the current fiscal year is destined for mining, with resources firms planning to spend another $120 billion by June 2013. While he conceded that the sustained rise in commodity prices has probably ended, Mr Walters said that the investment phase of the mining and resources boom would still be a driver for economic growth in 2012 and 2013. “You’re still going to get a lot of negative news,” he commented, “but if you look at the numbers, there is still a lot of spending to be done.”
The value of residential property held by self-managed super funds is growing by around $1 billion a year, rising from nearly $11 billion in 2008 to almost $15 billion last March. But is it a prudent property investment? AFA President Brad Fox isn’t so sure. He says the limited recourse mortgages that SMSFs use to purchase residential property have their downsides. There are more costs involved due to higher interest rates and establishment costs. There are also restrictions surrounding improvements that can be made. This has led SMSFs to turn towards the off-the-plan market, and Fox expresses reservations regarding the uncertainty of buying a property that hasn’t yet been built. Compliance breaches can also be horrendously expensive to correct. Despite these drawbacks, Fox believes SMSFs could eventually account for up to 20 per cent of the residential property market, due to purchasers who are already investors choosing to take the SMSF route.