Saturday Summary – the most interesting property investment articles I’ve read this week (2014/12/07)

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 Top 10 Mistakes to Avoid When Buying Property

Your Investment Property magazine shares the following costly mistakes you should avoid whether you are a home buyer o property investor.

  1. Lack of research
  2. Thinking Selling Agents are there to help you, the ‘buyer
  3. Searching without finance approval
  4. Overstretching your finances

.
  5. Ignoring building and pest inspections
  6. Not factoring in ongoing running costs
  7. Buying property sight unseen

.
  8. Limiting your selection choice
by avoiding the stress of auctions
  9. Listening to too many people – you know –

 

7 Top Tips for buying in a hot market | Granny Flats | Negotiation Tips | New, established or off the plan – which is best?

Another great Real Estate Talk show  produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show.'[sam id=36 codes=’true’]

Details of this week’s show:

Bryce Holdaway gives us his 7 top tips for buying in a hot market
I explain why we are building smaller houses and what the Baby Boomers up to
Andrew Mirams from Intuitive Finance explains about bridging loans
George Raptis from Metropole in Sydney tells us the reasons you should never buy sight unseen, whether it’s an off the plan, a new build or even an established property
Jenni Brown shares some negotiation tips
Damian Collins gives us the lowdown on granny flats

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.

 

Frequent-flyer points for house buyers a perilous route to choose

Real Estate expert Monique Wakelin warns property buyers in The Australian of a recent practice to entice property buyers with frequent flyer points. She says:

Loyalty program managers are leveraging their knowledge of consumer behaviour to do deals with the property and finance industries. Left unregulated, these incentive schemes could seduce thousands of consumers to borrow too much, pay too much and buy the wrong properties.

With interest rates so low, it’s an outcome that could damage a generation’s faith in the integrity of the property market, with hazardous flow-on effects for the health of the broader economy.

You can now earn more than 500,000 frequent-flyer points with Qantas buying a new LK Property Group developed apartment. It’s enough to fly a couple business class return to Europe.

Macquarie Bank, too, has teamed up with Qantas to credit those who take up its Flyer Home Loan with tens of thousands of points over the lifetime of the loan.

That’s great if you like to travel, but will the travel lollipop mitigate the cost of potentially dud investments?

Enticements to buy new property are not new. For years developers have offered prospective buyers reduced deposits, cash backs, stamp-duty savings, guaranteed rents and small cars.

But this is more dangerous because the two objectives — investment in property on one side and leisure/travel and lifestyle on the other — become dangerously confused.

She continues…

When they come to sell their property, these points-enriched owners may struggle to recoup their original investments on the resale market.

The property market works best when pricing and the factors influencing it are transparent. Given how vital the property market is to the health of the economy, the dangers must not be underestimated.

 

Pete Wargent’s take on population growth

Regular Property Update blogger Pete Wargent explains how almost every statistic which comes out of China seems to blow the mind

For example due to the enormous respective populations of India and China, more of the world’s population lives within the circle  in the diagram below than outside it.

world

 

The Sydney property market will remain strong

Smart Property Investment tells us that a new report from QBE claims the Sydney market will continue its strong performance through to 2016.

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.

 

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:

How to understand the true value of land – John Lindeman

How to select a property that outperforms the market

Property Stock on Market Report, November 2013 – Louis Christopher

Here’s one of the reasons Melbourne’s property market is so strong

2014 will be a better year for the Australian economy

[Video] The latest property news with Kevin Turner | 4th December

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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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