Saturday Summary – the most interesting property investment articles I’ve read this week (2013/07/20)

There are more property investment articles, commentaries and analyst reports on the Web every week than anyone could read in a month. Each Saturday morning I like to share some of the interesting ones I’ve read during the week.

Enjoy your weekend…and please forward to your friends by clicking a social link buttons on the left.

Apartments still outperforming houses

Smart Property Investor reports that despite the ‘old school’ investment preference for houses, units appear to be growing in strength by comparison, according to Australian Property Monitors’ (APM’s) Rental Price Series Quarterly Report which has seen strong unit rental prices across Sydney and Perth, while median asking rents for houses have been less impressive.

While national median asking rents for units jumped by 0.5 per cent over the quarter, for houses they sank by a further 0.5 per cent over the same period.

In Perth, houses recorded growth of 1 per cent, but were the only capital to receive a positive result for houses. Unit rents in Perth soared by 6.3 per cent, bringing the current median asking rent to $490 per week. For Sydney, this figure sits at $500.

Sydney rents for houses remained flat, with no increases over the June quarter, while unit prices jumped by 1.1 per cent (and 2.2 per cent over the year).

“The trend we’ve been seeing this year has continued as unit prices in Sydney outperform houses, while rental prices for both houses and units have skyrocketed in Perth,” said Andrew Wilson, senior economist at APM.

“Affordability constraints in these markets are motivating tenants to gravitate towards cheaper unit accommodation. However, the consequence of this of course is that the difference between house and unit rents in these cities is converging.

“The good news for other capital markets is that rental growth is expected to remain subdued over the remainder of 2013 as low interest rates help drive increased activity from first home buyers, investors and home builders reducing demand and increasing supply,” he said.

 

John McGrath on selling in a flat market | What if you own a dud property? | Property sales stats | Capital Gains Tax

Another great Real Estate Talk show  produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show.

Details of this week’s show:
Michael Yardney, from Metropole Property Strategists asks himself a couple of questions about each of his investment properties
Rolf Schaefer answers a question from Christine about topping up her ‘buffers’ or getting another property.
Michael Matusik cuts through all the bull about apartment projects reporting big sales volumes and gives us the facts.
John McGrath joins us to set out what you can do if you find yourself having to sell a property under pressure.

You should definitely subscribe to this weekly audio program. Click Here It’s free and you can listen on the go on your smartphone, iPad etc.

Foreign buyers push up new apartment prices.

Property Observer reports that the proportion of new houses and apartments being purchased by foreign buyers has doubled over the last 2 years.

Foreign buyers now account for between 12% and 13% of all new residential property purchases, according to the views of around 300 property participants surveyed as part of the June quarter NAB residential property index.

This is up from foreign buyers accounting for around 5% to 6% of buying activity in much of 2011, previous NAB surveys have found.

Queensland (20%) and Victoria (14.1%) remain the choice locations for foreign investors followed by NSW (above 10%).

[sam id=31 codes=’true’]Of course non residents cannot buy established properties, so they are a significant force in buying off the plan properties and this is one of the reasons some projects which would not otherwise have been financially viable, get across the line.

The end result is an oversupply of new inner city apartments, particularly in Melbourne and to a lesser extent on the Gold Coast and Brisbane.

The problem is that inexperienced local buyers are lulled into a false sense of security, also buying into these complexes hearing of all the pre sales. The problem is that usually on completion end values are significantly below the purchase price leaving investors out of pocket.

 

Sydney and Brisbane look good for property investment- John McGrath ?

In his regular column for Switzer.com  real estate guru John McGrath said:

Sydney and Brisbane are two very important markets right now.

Let’s look at it from an investment perspective. We are at the start of a 3-5 year recovery in both markets. Sydney is ahead, as it always is. While Sydney is an excellent option for long-term wealth creation, Brisbane also has much to offer – especially in terms of affordability.

The median house price in Sydney right now is $662,500 and the yield is 4.2%. In comparison, Brisbane’s median house price is $448,500 and the yield is 4.7%.

On the apartments front, the median apartment price in Sydney is $500,000 and the yield is 4.9%. Brisbane’s median apartment price is $370,000 and the yield is 5.7%.

The bottom line is, Sydney is more expensive to buy into but will probably deliver better capital growth in the medium term. Brisbane is more affordable and offers a greater yield.

 

The 2 day work week

CNNMoney recalls that 80 years ago economists thought life would be very different than it is today. They thoughts we’d have heaps of leisure time:

Back in 1930, renowned economist John Maynard Keynes predicted technological advancements would mean we would all eventually work just 15 hours a week. That same year, evolutionary biologist Julian Huxley predicted the two-day work week. Both men warned that someday, we would have so much leisure time, we would be bored out of our minds.

“The human being can consume so much and no more,” Huxley said in 1930. “When we reach the point when the world produces all the goods that it needs in two days, as it inevitably will, we must curtail our production of goods and turn our attention to the great problem of what to do with our new leisure.”

 

Blogs you may have missed this week:

If you didn’t have a chance to read my daily blog, here’s a list of the blogs you missed this week:

Would you like to work 2 or 3 days a week?

Home loan borrowers could be debt-free almost 10 years sooner!- Michael Yardney

Charlie Munger’s best quotes of all time- Michael Yardney

My parents had many failings. What about yours?

The Real Use of Property Options – Rob Balanda

The latest property video from Kevin Turner | 17th July

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If you’re serious about property investment please join me and a group of property and tax experts at my upcoming Property Market and Economic Updates that I’ll be conducting in 4 states in August and September 2013

I will be presenting a heap of BRAND NEW content I haven’t discussed in public before. I guarantee there will be several things I reveal that you are not doing and you should be!

Click here now to get more details and reserve your seat.

Property & Econonomic Update

If you want to cut through all of the media hype, and all the contradictory predictions, and finally learn the truth (good and bad) about what is going to happen to the Australian property markets, this seminar is exactly for you…  Click here now to get more details and reserve your seat.

Michael Yardney

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About

Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's been once agin been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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