Each Saturday morning I like to share some of the interesting property investment and economic articles I’ve read during the week.
I’ve put them here all in the one place for your easy reading.
Enjoy your weekend….and please forward to your friends by clicking a social link buttons on the left.
What John McGrath thinks is happening to the Sydney property market.
Leading estate agent John McGrath recently released his Spring Sydney property market report card. Here’s a summary of what he said on Peter Switzer’s web site:
Where we are now
Despite the GFC bringing challenging times for all economies and financial markets, Australian residential property has outshined other asset classes. Whilst most markets in the US and Europe have seen price declines of 25 per cent – 50 per cent, the Australian market has stood firm with price corrections ranging from five per cent to 25 per cent. In short, we’ve done very well. How come? Here’s a few reasons:
- A strong banking environment left us with far less sub-prime carnage than elsewhere and the banks never stopped lending to qualified buyers during the GFC.
- A low interest rate environment provided us with the tools we needed to reduce pressure on existing borrowers and encourage others, particularly first home buyers and investors, into the residential property market.
- A housing shortage around the country meant there was a reasonable balance between supply and demand, so as demand reduced it was less noticeable because we were in a period of artificially low supply.
- Low unemployment, coupled with significantly lower interest rates, meant that many people who retained their jobs were actually better off than they were pre-GFC.
Where we’re headed next
One of the most common questions I’m getting today is: “When will the recovery begin?”
The simple truth is that no one can pick the bottom of the market until it’s past. But my gut feeling is that real estate markets in most parts of Australia, certainly Sydney, are past the worst and heading for some blue skies in 2013.
That’s not to say I expect either a straight line growth recovery or an instant uplift in prices. Neither of these outcomes is likely. However, what I’m seeing on the ground, backed up with some key data points, is that we are through the worst and at the beginning of the next growth cycle. We have already seen Sydney median prices grow by just under 2 per cent in the past 12 months.
Here’s a quick snapshot of the key trends we’re seeing today that prove we’re well on the road to recovery in Sydney:
- Lower days on market
- Investors returning
- Multiple bidders at auctions and improving clearance rates
- The return of multiple offers for many private treaty sales
- Affordability has increased, particularly for first home buyers
- Home loan rates now at a 3.25 per cent cash rate is the lowest in three years
- Rents have continued to head higher
So, as we look at these factors and observations, it seems to me that all things considered we will see price growth in Sydney in 2013. Here are John McGrath’s predictions
- Under $750,000 – up two per cent to five per cent
- $750,000-$1.5m – up five per cent to eight per cent
- Above $1.5m – neutral for the next three quarters, then up 10 per cent in FY14 (if the ASX hits 5000, the top end of the property market will see rapid increases earlier than this.)
- Up four per cent to five per cent
Read the full Sydney McGrath Report
We go shopping for a $400,000 property
Another great Real Estate Talk show produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show.
This week we asked some of our property experts what they would buy and where they would go shopping for a property if they had $400,000 to spend.
We spoke to:
- Sam Saggers from Positive Real Estate
- Monique Sasson-Wakelin from Wakelin Property Advisory
- Hotspotting’s Terry Ryder
- Rachael Barnes from Property Women
- Buyers agent George Raptis from Sydney
- Buyers agent Damian Collins from Perth
- Michael Matusik from Matusik Missive
- Michael Yardney from Metropole Property Stratgists
- Sharon Garvey from Strata Match
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.
10 property questions failed investors never ask
Most property investors don’t buy right and never make it beyond two properties.
Want to do better? According to Your Investment Property magazine all you have to do is ask. They list 10 questions you should ask before you buy an investment property. They are:
1. What’s being built nearby?
2. What’s it worth?
3. What’s happening in the local market?
4. What’s the rental potential?
5. Capital gains or rental return?
6. Is there competition?
7. What’s included in the title search?
8. What’s the state of the accounts?
9. Who’s your target market?
10. What’s the property management situation going to be?
Video of the week – Where’s the next property investment hotspot – John McGrath tells all
With home loan approvals at their highest level in months, where is the next hotspot to take advantage of the current low rates?
Low rates should tempt buyers
WITH interest rates tipped to remain at historic lows over the next two years, borrowers are expected to be lured back into the Australian property market, according to Westpac chief economist Bill Evans.
Speaking at an Australian Business Economists lunch, Mr Evans said if rates remained around present levels or lower for the next few years it would have a serious impact on the country’s property market.
His comments come a week after the Reserve Bank cut the official cash rate to 3.25 per cent, with many expecting a further rate cut next month.
”The market [is] expecting rates to go lower, but it’s also expecting that these very low rates will be sustained for an extended period,” he said.
“Can you imagine what might happen to the Australian economy if we have two years or so where the cash rate is 2.25 per cent?
“I for one think that I’ll be going out and buying some Sydney property.”
Sally Auld, JPMorgan’s fixed-income strategist, said money markets were pricing in a lower cash rate for the next few years.
”In an economy such as Australia, where we’re a AAA-rated sovereign and we’re a strong sovereign in terms of our debt metrics … then the capital inflow here is probably still going to continue to a certain degree,” she said.
The most ridiculous sick day excuses of all time
HAVE you ever taken a sick day because your dog had a nervous breakdown? Or you got sick from reading too much?
Those are among the most ridiculous sick day explanations people have given bosses, according to a CareerBuilder survey.
In line with previous years, 30 per cent of people said they have called in sick when they weren’t actually ill. Here’s a list of some of the excuses they gave..
- Employee forgot he had been hired for the job
- Employee said her dog was having a nervous breakdown
- Employee’s dead grandmother was being exhumed for a police investigation
- Employee said a bird bit her
- Employee was upset after watching “The Hunger Games”
- Employee got sick from reading too much
- Employee was suffering from a broken heart
- Employee’s hair turned orange from dying her hair at home
- Employee’s girlfriend poked him in the eye
Subscribe & don’t miss a single episode of Michael Yardney’s podcast
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
Need help listening to Michael Yardney’s podcast from your phone or tablet?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
Prefer to subscribe via email?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.