September Brisbane Market Upate

September Brisbane Market Upate

September is the first month of Spring, and housing markets around Australia have made further progress towards a recovery. In Brisbane, it is still slow and steady, but the trend in dwelling values is still upward.

The Corelogic hedonic home value index at the end of September confirmed a further 0.1% rise in dwelling values across wider Brisbane. This can be further assessed by houses and units which show the price growth trend for September is upward for houses, but not units. Houses recorded a 0.2% increase in values whereas units demonstrated a -0.2% decrease over the same period.

Vacancy Rates for Brisbane are, in most cases, still trending downward with some variation by suburb. The overall Brisbane Vacancy Rate is sitting at 2.5% according to SQM Research, so any suburbs which are sitting higher than this are likely to have supply issues in the current market. There are a number of suburbs that we are actively buying in which have vacancy rates below 2% which demonstrates the extremely low supply of properties available for rent.

Additionally, asking rents over the month of September according to SQM Research showed that Brisbane is the only Capital City to record an increase over the month for both houses and units. Asking rents increased 0.6% for houses and 0.9% for units which represents a 12 month change in asking rents for Brisbane houses of 3.5% and units of 1.9%. (more…)

Melbourne high-rise apartment prices lag houses by 50 per cent in some suburbs

Melbourne high-rise apartment prices lag houses by 50 per cent in some suburbs

Melbourne high-rise apartment prices have underperformed houses by more than 50 per cent in most suburbs in the past 10 years, amid concerns construction defects and cladding issues could lead to further falls in units.

Analysis by Propertyology, a company that researches property markets on behalf of investors, shows that while house prices in Melbourne grew on average by 91 per cent over the 10 years to May 31 this year, prices of apartments in most suburbs dominated by high-rise unit blocks have risen by less than half of that

The analysis using CoreLogic data shows Melbourne’s high-rise apartment market has performed significantly worse than every other Australian city.

It found apartments in Abbotsford, South Yarra and Balwyn, St Kilda and Richmond had value growth of between 3 per cent and 35 per cent over the 10 years. Price growth for Docklands apartments was 10 per cent and for Southbank 24 per cent.

Propertyology’s managing director and head of market research, Simon Pressley, said a huge number of “Lego” high-rise apartments had been built over the past 20 years.

“This poor performance has nothing to do with the structural and cladding problems that are coming to light, but that is likely to compound the underperformance even further,” he said. (more…)

Woolloongabba: This world-famous sporting hub is shedding its industrial roots

Woolloongabba: This world-famous sporting hub is shedding its industrial roots

Being home to the world-famous Gabba stadium, officially known as the Brisbane Cricket Ground, the suburb of Woolloongabba in Brisbane’s inner south is well known around the world.

“I can tell people in Sydney, Melbourne or Adelaide we’re in Woolloongabba and they all know where it is because of the cricket ground,” says Damon Amos, owner of Detour, a restaurant located on Logan Road, one of area’s main streets.

The Gabba brings an excitement to the suburb, he adds.

“I love the energy we have in the dining room when the lights are on at the Gabba and the Brisbane Lions are flying – we can hear that. You can’t buy that kind of atmosphere.”

While the stadium has ensured Woolloongabba’s reputation as a haven for sports fans, the ever-evolving suburb has widened its appeal, drawing in those looking for a great location with plenty of amenity and character.

Property Investment Professionals of Australia (PIPA) chairman Peter Koulizos, who has identified Woolloongabba as a property hotspot, describes it as “one of those classic inner-city suburbs going through a gentrification process”, which has seen it transform from its industrial roots into a great place to live. (more…)

Bye big banks, hello smaller lenders: Nearly 60% of Aussie property investors want to make the switch

Bye big banks, hello smaller lenders: Nearly 60% of Aussie property investors want to make the switch

More and more Aussie property investors aren’t settling for the big banks when shopping around for a mortgage, new research has revealed.

According to a recent annual sentiment survey from the Property Investment Professionals of Australia (PIPA), nearly 60% of Aussie investors now want to hop on board with non-big bank lenders. Meanwhile, in the past 12 months, 27% have actually taken the next step of securing an investment loan with a non-bank lender.

PIPA Chairman Peter Koulizos said tougher rules around borrowing money, along with growing distrust in the big banks, have meant many Aussie investors have had to set their sights wider while searching for mortgage options.

“Given tight lending conditions and the financial sector’s response to the Banking Royal Commission, a staggering 25% of respondents have found they were unable to refinance an amount they were able to borrow previously,” Koulizos said.

“Difficulty obtaining finance, as well as the popularity of banks being on the slide over the past year, meant that about 60% of investors are now more likely to consider a non-major bank lender, especially after the outcomes of last year’s Banking Royal Commission.”

The survey also found increased borrowing power and cheaper interest rates were the top reasons driving investors away from the big banks and towards smaller lenders. (more…)

What you need to know before you decide to rentvest

What you need to know before you decide to rentvest

Can’t afford to buy in the area where you live? There is a way to enjoy the lifestyle of your favourite suburb and still get a foothold in the property market.

Rentvesting – owning an investment property while renting where you live – is gaining traction.

Research from Property Investment Professionals of Australia shows a third of first-time buyers are shunning the owner-occupied dream and instead investing in a property and continuing to be tenants elsewhere.

While it can offer the best of both worlds, rentvesting calls for plenty of research to be sure it stacks up as an alternative to buying a home.

On this score, Angus Raine, executive chairman of the Raine & Horne property group, doesn’t mince his words.

“Today we have historically low interest rates and more affordable home prices,” he says.

“It’s time to stop saying, ‘I can’t afford to buy property in my area’, and start looking at buying in a more affordable suburb even though it may mean a bigger commute.

“If your budget doesn’t allow this, consider rentvesting.” (more…)

Access to credit drags construction industry

Access to credit drags construction industry

Australia’s construction industry marked its 13th consecutive month of decline in September, dragged by the slump in apartment and engineering works, according to the latest Australian Performance of Construction Index (PCI) report.

The PCI, based on a survey of construction industry purchasing managers, fell to 42.6 points in September. A reading below 50 indicates a contraction in the industry. The Housing Industry Association (HIA) and Ai Group produce the monthly index.

The index remained in the red despite the improvement in detached housing. The segment’s pace of decline slowed as the sub-index rose to 46.2.

“Both the activity and new orders indexes in house building recorded further increases in September, suggesting the pace of decline in this part of the industry at least has eased noticeably over recent months,” Peter Burns, head of policy at Ai Group, told The Australian Financial Review.

The report said apartment building remained the weakest-performing area, declining for an 18th consecutive month, and at an accelerated rate. The apartment sub-index fell by 0.9 points to 33 points in September. The engineering index also fell to 39.3 as new orders continue to decrease.

This could be due to the lack of demand from investors, who are still testing waters in the housing market. A recent survey by the Property Investment Professionals of Australia (PIPA) found that while 82% of investors believe now is an excellent time to get back to the market, they are still concerned about the stricter access to credit and the state of the Australian economy. (more…)