Saturday Summary – the most interesting property investment articles I’ve read this week (2014/12/14)

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.

Mortgage insurer writes off “off the plan” and new properties

In another waring to those considering buying properties in their SMSF  Genworth, Australia’s biggest underwriter of lenders mortgage insurance, announced that  as of next week they would no longer accept off-the-plan or new properties as security when purchased in self-managed super funds.[sam id=37 codes=’true’]

“Off-the-plan purchases and new properties that have been completed for less than 12 months are no longer acceptable. A “new property” is defined as being any property (including any house, unit, villa or townhouse) that has been fully completed for less than 12 months and/or has not been previously sold since construction (i.e. the vendor is a developer/builder or a related party of the developer/builder).”

Clearly they are being cautious, but if they have concerns about the growth potential of this type of property – so should you.

 

Negotiating tips | Valuations | Scrapping negative gearing | Small property development | A chat with TV vet Dr. Harry

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:
I state the case for why negative gearing should not be abolished for property investment
Monique Sasson from Wakelin Property Advisory talks about loyalty programs
TV vet Dr Harry talks about where he lives and what he loves about property
…and more

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.

The most overlooked factor of property investing: Terry Ryder

Terry Ryder writes in Property Observer that supply is the factor most over-looked by property investors. He says:

Those who take the time to do some research before tossing a few hundred thousand at an investment property tend to focus on demand, with scant regard for the flipside of the growth equation.

Some organisations that purport to advise investors preach a simplistic follow-the-population-growth strategy.

If high population growth was the core element in a good locational choice, the leading capital growth performers in the past five years would have been the Gold Coast and Wyndham City in the south-west of Melbourne. Gladstone, boosted by massive new demand from the influx of tens of thousands of gas project employees, would have soaring prices right now.

The opposite is true in those markets. The too-often forgotten factor is supply.

The Gold Coast has had five years of falling property values because of too much supply, which overpowered the impact of high population growth.

Wyndham City, which overtook the Gold Coast as the municipality with the greatest annual additions to its population, has recorded no growth in prices in the past three years, because of an excess of house-and-land packages – ultimately flogged off to distant investors by dodgy marketing companies on behalf of desperate developers.

Gladstone, after recording high growth in rentals and prices in 2011 and 2012, has seen rising vacancies and sharp downturn in prices because developers went overboard yet again.

So there are two key pieces of information investors must examine before committing to a target location: vacancy rates and building approvals.

 

Pete Wargent’s thoughts on what’s ahead for property next year

Regular Property Update blogger Pete Wargent explains how housing finance approvals are a useful indicator as to what is coming in the future, and the indicators suggest more of the same in 2014 while interest rates remain low.

Over the past 12 months, Sydney has recorded 14% growth, Perth around 10.5%, and Melbourne 7.5%. Even Adelaide, which was is my least favoured capital city suggestion due to there being a weaker supply/demand dynamic, has scraped together a tiny amount of capital growth, although the city’s dwelling prices have comfortably underperformed inflation for years and years now.

satsum14

 Source: RP Data

We are heading into a giant and unprecedented investor-led property boom in Sydney. But if you’ve been a long-term reader of my books (and my blog), you already knew that…years ago.

 

Australian housing affordability improves

API Magazine reports that national housing has become more affordable according to the Housing Affordability Report from the  Real Estate Institute of Australia (REIA) and Adelaide Bank report

Apparently households nationally are spending less of their income on housing.

“The September quarter of 2013 recorded an improvement in housing affordability with the proportion of income required to meet loan repayments decreasing 1.2 percentage points to 29.8 per cent.”

Compared to the same quarter of last year, the figure has fallen 3.5 per cent.

The study shows all states and territories have seen a steady decline in the proportion of family income needed to meet loan repayments since the September quarter in 2012.

Interest rates were cut by the Reserve Bank during the study period, which would contribute to the result.

The ACT remained the most affordable state or territory in which to buy a home, while New South Wales continued to be the least affordable.

All states and territories recorded improvements in affordability over the quarter – the largest in Tasmania, where the proportion dropped by 1.6 percentage points to 24.6 per cent.

The news wasn’t all positive, however, with the report highlighting a drop in first homebuyer participation.

For renters, affordability worsened slightly on a national level over the September quarter of 2013 with the proportion of income required to meet rent payments increasing 0.1 percentage points to 25.6 per cent.

 

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:

Six Reasons Most People Will Never Get Rich …and How To Make Sure You Do!

[Video] The latest property news with Kevin Turner | 11th December

This week’s property market trends | RPData

Xenophobia rules. Find out where buyers are really coming from- Michael Matusik

The new class of Chinese rich are fleeing their country—with their fortunes

Australian Property Market Update – ANZ Bank – 9th December 2013

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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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