If you've been reading my blogs for a while you would know that I believe in investing for capital growth.
When you eventually retire the vast majority of your wealth, or the assets you own, will not be the rent you've earned, or the wages you've received, but will be the untaxed capital growth of your property investments which will have compounded over time.
Of course, that's the reason why correct property selection is important as some properties will grow in value considerably more than others.
And, in general, this will relate to the property's location which will do 80% of the heavy lifting.
So it did not surprise me when the latest Domain House Price Report found that median house prices in more than 20 suburbs in east coast cities remained virtually flat over a five-year period.
|Source: Domain. Note: Median suburb property prices are for home sold over the year to September.|
|SUBURBS WHERE PRICES ARE AT 2015 LEVELS|
|State||Suburb||Region||Property Type||Median||YoY growth||5Y growth|
|NSW||West Ryde||Upper North Shore||Unit||$625,000||7.7%||0.8%|
|NSW||Epping||Upper North Shore||Unit||$830,000||9.2%||0.2%|
|NSW||Hornsby||Upper North Shore||Unit||$645,000||0.6%||0.1%|
|NSW||Warwick Farm||South West||Unit||$420,000||-1.8%||0.0%|
|NSW||Haymarket||City and East||Unit||$1,105,000||-8.7%||0.0%|
|NSW||Edmondson Park||South West||House||$820,000||1.5%||-0.4%|
|NSW||Castle Hill||Upper North Shore||Unit||$810,000||2.5%||-0.6%|
|QLD||Pacific Pines||Gold Coast Nerang and Hinterland||Unit||$355,000||-1.4%||0.9%|
|QLD||West End||Brisbane West||Unit||$549,000||-4.5%||-0.1%|
While median house prices are one of the most cited property market statistics as with any single measure there are some shortcomings that investors need to understand in order not to be misled with what’s really happening to house price values.
For example, if more properties are sold at the low price end of the market, they will pull the median price down with them and if more sales take place at the high end they will take the median along for the ride.
Changes in published median prices often don't always mean that prices are actually rising or falling – only that more sales of lower priced or higher priced properties have occurred.
This means there are many other factors to take into consideration when evaluating the suburbs performance.
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Digging deeper into the Domain statistics Sydney had the most suburbs where price remained flat or saw limited growth, with medians in more than a dozen suburbs virtually unchanged.
These were mostly in middle to outer-ring areas where a substantial amount of new development in recent years created an oversupply of apartments.
Haymarket, a suburb typically popular with international students, was the only inner-city suburb where prices were at 2015 levels.
Hard hit by border closures, it has seen reduced demand from buyers and renters, which has put downward pressure on prices – which dropped 8.7 per cent over the year to a median of $1,105,000.
A perfect storm is brewing for our property markets in 2021-22, and you can trust the team at Metropole to provide you with direction, guidance and results.
In challenging times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s what you exactly what you get from the multi award-winning team at Metropole.
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