Saturday Summary – the most interesting property investment articles I’ve read this week (2013/10/26)

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.

The Sydney property market to remain strong

The Sydney market will continue its strong performance through to 2016, a new report from QBE claims.

Price growth in Sydney over the next three years is expected to total 19 per cent before slowing in 2016, according to the Australian Housing Outlook 2013-2016 report.

The report prepared by BIS Shrapnel shows this uptick in activity is centered on inner Sydney, which has a growth rate of 13.6 per cent. By contrast, growth in outer Sydney is only 3.1 per cent, well below the city’s median rate.

The data suggests Sydney’s strong overall performance is underpinned by lower interest rates, a deficiency in housing stock and a strong rental market.

The report predicts interest rates will remain at their current levels of 2.5 per cent until 2015.

From then onwards, successive rises are expected to take rates to a peak of 7.2 per cent by the end of 2016.

Price growth in New South Wales is being driven by upgraders, downsizers and investors, with first home buyers largely out of the market, BIS Shrapnel managing director Robert Mellor said.

However, the market should see a return of first home buyers within six months or so, Mr Mellor said.

The report also shows the Sydney rental market is seeing an increase in rental yields, while vacancy rates have stayed consistently below three per cent since 2004.

Meanwhile, strong rates of net overseas migration to New South Wales, coupled with high underlying demand, have led to a housing deficiency, Mr Mellor said.

This deficiency is expected to reach a peak of almost 60,000 in 2015, before dropping to close to 50,000 in 2016.

 

What type of properties don’t banks like? | How to win at auctions in a rising market | Are on line valuation tools useful?

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

Andrew Mirams from Intuitive Finance gives us some great ways to maximise borrowings by avoiding the properties the banks don’t like
Tim McKibbin, has met with the Fair Trading commissioner to discuss the problems posed by online valuation sites
Michael Yardney shares a personal experience as he tells the story about why he decided recently to sell down a block of 3 apartments
Terry Ryder from Hot Spotting answers a question from Neil about Newcastle and its potential for him to invest

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.

 

First home buyers will be back next year

Real Estate Business reports that First Home Buyers (FHBs) are set to make a strong return to the housing market next year with numbers to rise by 21 per cent, according to new research. They say:

LJ Hooker’s white paper, First Home Buyers: a dynamic and changing market, predicts around 110,300 first home buyers (FHBs) will be looking to make their first real estate purchase in 2014, up from 90,551 this year.

Victoria will see the most activity with 30,000 FHBs entering the market followed by New South Wales (26,000), Western Australia (22,000), Queensland (20,000), South Australia (7,500), ACT (1,900), Tasmania (1,800) and the Northern Territory (1,100).

Eric Barnes, LJ Hooker research manager, said the surge in FHBs would be fuelled by the increasing emergence of Generation Y, who were established in their careers and ready to buy.

“Typically these FHBs are well-educated, tech-savvy and market informed with a taste for quality housing,” he said.[sam id=35 codes=’true’]

“Some will be stay-at-home investors; living with their parents, building equity through property investment, prior to moving out.

“Others will be professional couples, paying a premium for CBD accessibility and eclectic neighbourhoods, while benefitting from their state’s FHB grants for buying new.

“There is the real likelihood that these Gen-Y buyers will leapfrog earlier generations in wealth terms – benefiting from property’s inherent compounding growth, by entering the market at an early age.”

 

New infrastructure: Sydney areas to benefit – John McGrath

In his regular column in Switzer, John McGrath explains some of the infrastructure changes occurring in Sydney that will affect the property markets.

WestConnex motorway WestConnex is the largest urban transport project in NSW history. It involves a 33km link between Sydney’s far west and the airport and Port Botany precinct and will save 35 minutes on a trip from Parramatta to Sydney Airport and 20 minutes from Penrith to the CBD.
Completion: 2023
Areas to benefit: Inner West, South-West, St George, Western Sydney

CBD and South East light rail The light rail will extend from Circular Quay along George Street to Central Station, then on to Kingsford via Anzac Parade and Randwick. Light rail can provide greater capacity than buses and should ease traffic congestion, with 220 fewer buses entering the CBD in the AM peak.
Completion date: 2020
Areas to benefit: Kensington, Kingsford, Randwick, Surry Hills

North West train line This 23km heavy train line will run from Epping through to the Hills and North West regions, with eight stations at Cherrybrook, Castle Hill, Showground, Norwest, Bella Vista, Kellyville, Rouse Hill and Cudgegong Road. This will be a fully-automated rapid transit system – an Australian-first incorporating driverless trains.
Completion date: 2020
Areas to benefit: Baulkham Hills, Bella Vista, Castle Hill, Cherrybrook, Kellyville, Rouse Hill

Barangaroo The 22 hectare former container port on the western harbourside edge of Sydney CBD will house 800 stylish apartments; three commercial towers; a mixed retail and café precinct; and a 5.7 hectare waterfront park. The site will include a landmark 350-room hotel with a VIP casino.
Completion date: First stage 2015 – first commercial tower, Wynyard pedestrian link and Headland Park
Areas to benefit: CBD, Millers Point, Pyrmont, Walsh Bay

Inner West light rail extension
The Inner West light rail currently runs from Central Station to Lilyfield. Construction began in 2012 and all platforms are now in place. We expect significant new demand for property in the immediate vicinity of the stations.
Completion date: 2015
Areas to benefit: Dulwich Hill, Haberfield, Leichhardt, Lewisham, Marrickville

 
Australian millionaires: Why we are not as rich as we look

Credit Suisse’s new Global Wealth Report shows that Australia has the highest median wealth per adult for the third year in a row, but BRW explains that while it may seem that there are plenty of people doing quite well for themselves, we shouldn’t get too excited. Unfortunately, the numbers aren’t quite as good as they first appear.

According to the figures, there are 11 million Australians worth more than $232,489 and 1.1 million millionaires.

One of problems is that we appear to slipping down the global standings, albeit from a high starting point.

Growth in household wealth between 2000 and 2013 was very strong. The average annual rate is a whopping 13 per cent but when you consider that half of that is due to currency fluctuations the rise seems much less impressive.

The rise since 2007, when you apply constant exchange rates, is a much less impressive 3.3 per cent.

A large proportion of our personal wealth, by global standards, is held in property. Proponents of the view that we are entering a new housing bubble may find this somewhat concerning.

About 59 per cent of our wealth is held in property, second only to Norway. In the US, it’s 38 per cent.

Last year we had the highest average wealth per person but this year we are number two behind Switzerland.

The average wealth per person in Australia is $426,222 or put another way, the average Australian is worth just 0.18 per cent of the poorest person on the Rich 200.

Credit Suisse’s numbers suggest that our ultra-wealthy remain the big winners. The data shows that Australians make-up 3.8 per cent of the richest 1 per cent of people internationally, despite having just 0.4 per cent of all adults throughout the world.

 

We’re fatter than we thought

Millions more Australians may be obese than previously thought, because the usual method of measuring obesity has dramatically underestimated the problem according to an article in the Sydney Morning Herald

Now before you point the finger…yes, I definitely fall into that category. Unfortunately I missed gym this morning. That makes 5 years in a row

O.K. here’s the bad news:

A study of more than 4000 Australian adults found 27 per cent were obese according to their body mass index, a measure of the relationship between their height and weight. This figure matches the latest estimate for the prevalence of obesity in the Australian population.

But when researchers measured the waists of their subjects, they found 49 per cent were obese.

One of the researchers, Anna Peeters, the head of obesity and population health at the Baker IDI Heart and Diabetes Institute, said body mass index (BMI) was usually used to measure obesity because it was more straightforward than measuring waist circumference.

But she said waist circumference was a stronger predictor of health problems such as heart disease and diabetes, and the latest findings showed relying on BMI missed many cases of obesity.

”It shows fairly conclusively that if we only use BMI, we’re missing a large proportion of the burden of obesity,” Associate Professor Peeters said.

”We need to move to population measurements that include waist circumference, even though that’s tricky.”

A man is considered obese if he measures more than 102 centimetres around the waist, while a woman is obese if her waist measures more than 88 centimetres.

”The overall burden of obesity is even greater than we thought previously,” she said.

 

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:

House prices keep rising, but the recovery is patchy & fragile. Dr Andrew Wilson

Is it a housing boom or bubble?

The Housing Market Cup- John Lindeman

“Asset Protect” Yourself – Rob Balanda

Some insights into what first home buyers are likley to do

Latest property news video with Kevin Turner | 23rd October

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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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