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.
How have the investor magazine hotspots fared two years on?
Two years ago Property Observer reported that out of the collective number of ‘100 best suburb to buy’ housing hotspots named by investment magazines Your Investment Property and Australian Property Investor, only 21 featured in both magazines’ lists.
Analysis of the performance of detached houses in these 21 hotspots reveals that very few are returning anything meaningful to investors while some have seen their median values fall sharply.
There are just four locations that have delivered returns in excess of inflation (around 5% over the past two years).
Property Observer looked at the movement in medians of both RP Data and Australian Property Monitors (APM), just to also see how the two major data providers differed on the same location.
Three of them – Townsville, Gladstone and Chinchilla – are in Queensland and have strong ties to the mining sector.
The fourth is the regional city of Bathurst, around 160 kilometres from Sydney in the NSW Central Tablelands, picked for its affordability and high yields, with RP Data recording a 9.8% rise in median values and APM a 5.2% increase.
Among the worst performers over the past two years have been Melbourne locations including Broadmeadows, St Kilda and Balaclava along with Paddington in Brisbane and Kensington in Adelaide.
Most astute property investors would take a long term view on their investments – indeed some of these non-performers may turn around in the coming years.
However, many investors would expect to see signs of capital growth in so-called hotspots over a two-year period and certainly not the declines recorded in some locations as the tables below show:
To read more and see the table of results click here
Tips to get started in property development | Is commercial property right for you? | Changing property managers
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Details of this week’s show:
Michael Yardney gives us the lowdown on investing in commercial property
Leah Calnan discusses her book about maximizing your returns from investing
Advice about how to change property managers correctly and some info about property development plus more!
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Is Sydney’s property market rising too fast?
Back in mid-2012, the commentators who’d forecast a price crash were saying that property owners in Sydney should be panicking because prices were flat and hadn’t responded to interest rates (they rarely respond immediately).
Now they will instead report that owners should panic because prices are going to boom and rise too fast.
I’m not sure I follow the logic, while prices in Sydney in income-adjusted terms remain below where they were a decade ago, yet the population is growing at an astonishing rate (yes, I’ve heard the argument that population growth doesn’t lead to dwelling price growth…one for another day).
Property owners would be wise to consider property as a 20-30 year investment rather than the housing bust predictions which will continue to surface every year.
Assuming that you chose to buy in Sydney in the first place because the population is booming more quickly than our collective ability to construct appropriate dwellings and infrastructure, then nowt has changed as far as I can tell.
We could do a lot better in this regard, but not while we maintain the ridiculous focus on affordability in inner-ring suburbs instead of how to promote better affordability, transport links and infrastructure in other parts of this vast country.
The inner west of Sydney is no longer recording the highest auction clearance rates which the low north shore and the city and east sectors now hitting sky-high levels which are likely to be reflected in price growth.
Based on the small sample of properties I’ve looked up, this is probably in part due to vendor expectations having jumped in the inner west…and perhaps some speculative sellers hoping for unrealistic prices.
Benign CPI forecasts imply that there is another interest rate cut in the pipeline which will do nothing to dampen investor activity
Chinese property investors prefer Melbourne to Sydney
Domain reports that Chinese investors prefer Melbourne over Sydney and there’s been a huge spike in interest in Australian property generally, according to a survey of Mandarin speakers looking to buy in Australia.
A report, “Top Destinations for Chinese Buyers” by the No. 1 Chinese international property website Juwai.com, shows the scale of Chinese investment around the world.
It says 63 million Chinese have sufficient wealth to buy international property, including 2.8 million very rich individuals. More than 60 per cent are already engaged in overseas investment, immigration or education. Chinese buyers spent $US50 billion on overseas real estate last year.
The top five countries ranked by activity on Juwai.com are the US, Australia, Britain, Singapore and Canada.
The revival of Kevin Rudd as prime minister and the “plummeting” dollar have been offered as reasons for a surge in Australian property searches on the internet in the past month.
During the past six months, Melbourne had the most hits, Sydney was second, the Gold Coast third, Brisbane fourth and Perth five.
Mobile Internet Usage Hits New Heights in China
Motley Fool reports that as Internet access spreads across China, its citizens are embracing the mobile Internet as never before. According to the China Internet Network Information Center (CNNIC):
464 million people have mobile access to the Internet. With total Internet penetration at 591 million, that means about four out of every five Internet users are accessing the Internet through their smartphones.
Perhaps even more telling, the report says that seven out of 10 Chinese say they first experienced the Internet on their mobile devices — not on a desktop computer.
Still, the country seems far away from reaching full Internet penetration through any and all devices. Currently, China’s population totals more than 1.35 billion people.
Nonetheless, the country has made strides. While seemingly small, CNNIC still predicts the number of Internet users to grow to 800 million by 2015.
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:
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