There are more interesting 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 ones I’ve read during the week.
The weekend will be over before you know it, so enjoy some weekend reading…and please forward to your friends by clicking the social link buttons.
Melbourne’s three-bedroom apartment boom is inspiring a new wave of downsizers
With the property market experiencing many changes – the demographic of the average buyer appears to have changes too.
An article on Domain.com.au looked at the new wave of downsizers taking over the property market.
Once a niche demographic given little consideration from the wider property industry, downsizers are quickly becoming a dominant Melbourne buying force, and developers are stepping up.
While it’s commonly been assumed that contemporary townhouses are the preferred housing type among this cohort (with apartments only really considered if they come with the communal amenities of a five-star hotel), recent sales indicate it’s the more modest three-bedroom products downsizers find most attractive.
Domain data shows three-bedroom apartment prices jumped a whopping 16.3 per cent during the past year, compared with just 2.1 per cent for a one-bedroom and 1.9 per cent for a two-bedroom apartment.
Domain chief economist Andrew Wilson says this data-evidenced demand will be the catalyst for more three-bedroom apartments beyond penthouses being created.
“A roadblock for downsizers, until now, has been the lack of suitable options… We’ll soon start seeing three-bedroom apartments being developed at the expense of one-beds and studios,” Wilson says.
“It’s a lower price point than a penthouse or house, but still ticks all the boxes downsizers look for.”
As more three-bedroom apartments take shape, it’s expected this formerly top-level product will be positioned closer to the ground, offering the potential for adjoining ground-floor terraces and internal garage access.
As for their location, Richmond remains a downsizer hotspot for its city-proximity and diverse housing stock.
“They do like the Punt Road end of Richmond, around the Yarra River, where they can go for their walks, and a couple of streets away from Swan Street and Bridge Road for public transport, because as they get a bit older that need becomes stronger as well,” say Biggin & Scottpartner Edward Hobbs.
“If you can walk or tram to dinner the theatre or the footy, it will be popular,” says Nelson Alexander director Arch Stave.
Read the full article here
Debt & repayments
Reports are showing our household debts continue to rise with no indication of a slowdown.
Household debt is now at record highs according the RBA’s tables, and as reported in the headlines.
Here’s the household P&L side of the equation: interest payable to income ratios.
The housing interest payments to income ratio is 36 per cent below the peak.
Remember that lenders began tweaking interest-only mortgage rates higher in Q2 2017, so this will begin to show up in the figures from next quarter.
Read the full article here
Apartment prices are set to fall as the housing boom ends for Sydney and Melbourne
Around most corners, particularly in Sydney and Melbourne, it seems apartments a dime a dozen.
But despite the overwhelming boom over the last few years, an article on Business Insider has indicated that that apartment prices are set to fall.
Australia’s east coast housing upturn is over, according to economic forecaster BIS Oxford Economics.
The resurgence in prices in the current financial year is likely to be short-lived with house price growth to slow or even fall in some markets over the next two years.
The main drags on the market are further tightening of lending to investors and rising new stock levels.
And ahead is a looming oversupply in apartments which, according to BIS Oxford Economics forecasts, will mean a fall in prices in Sydney, Melbourne and Brisbane.
And BIS Oxford Economics, in its Residential Property Prospects 2017 to 2020 report, says new dwelling completions will see most undersupplied markets tip into oversupply.
Apartment prices will suffer on the east coast, as this chart shows:
BIS Oxford Economics says low interest rates and a relatively stable, but subdued, economic environment will prevent too many forced sales coming to the market to drive down prices in an American-style crash.
Angie Zigomanis, BIS Oxford Economics study author, expects all markets to weaken in 2017-18.
Recent moves by the regulator to slow growth in bank lending to investors, via fewer interest-only loans, are expected to cause a retreat by investors.
The rapid rise of new dwelling completions, which is resulting in a growing supply/demand imbalance, will also dampen price growth, especially for apartments in Sydney, Melbourne and Brisbane.
“New apartment completions in Australia will hit a record in 2016-17, which have been largely bought off-the-plan by investors,” says Zigomanis.
Click here for the full article
Gen Y turns to shares to buy into property market
There’s been much talk regarding the struggle Gen Y has to get into the property market.
Equally there’s been many theories as to what can be done; policy changes, parental assistance even the suggestion to accessing super.
Now, according to an article in the Sydney Morning Herald, Gen Y could be turning to the share market, as a way of getting their foot in.
A growing number of young Australians are stashing their cash in the stock market in a bid to build wealth and get a foot on the property ladder.
Millennials now make up almost 30 per cent of active CommSec accounts, representing 70,000 trades per month, findings released by the Commonwealth Bank show.
“As we all know it is becoming more and more difficult to save for a house so part of the reason millennials are turning to the share market is to grow their savings,” CommSec managing director Paul Rayson said.
He added given the low interest rate environment, youngsters are investing their money in blue chip shares (those that are well-known) where they can earn four to five per cent in return.
“With property it is getting harder and harder to think about ownership so that reduces their investment options,” he said.
“The share market can be a way to build savings and wealth over the longer term.”
He said while some millennials play it safe, others have a greater appetite for risk, investing in shares that have higher growth potential but are more volatile.
While the banks, big miners and telecom sectors are popular among the average investor, young Aussies have a higher allocation to growth stocks and companies which are in high demand in China including Blackmores and Bellamy’s.
Click here for the full article
LinkedIn lovers need to learn the secret of networking
When it comes to success – the ability to network is key.
But with the rise of social media, may people have lost basic communication skills with the hope of simply relying on their ‘social profile.’
So what is the key to good networking skills?
This article on switzer.com.au explores some of the skills you can use at your next business function.
A mate of mine heads up LinkedIn in Australia, so its success here has been good to see.
However, I have a problem with LinkedIn and LinkedInees.
As many of you know, I don’t like whingeing, so let me call this a helpful piece of mentoring for all the LinkedInees out there.
Let me explain.
When I put “the power of networking” into my search engine, this is what I saw first: “Networking has long been recognized as a powerful tool for business people and professionals. …
The creators of LinkedIn, Facebook, and Twitter have built their empires on the presumption that their social networking tools help people build their networks and remain better connected than ever.”
Okay, that’s not a bad starting point.
However to me, these explanations leave out the crucial aspect of successful networking, which I spotlight in a minute or two.
Some time ago, Samantha Cortez penned a piece for AMEX on the subject.
The headline was: “The Pros Share 8 Tips On Turning Contacts Into Connections.”
Let’s see what the experts recommend to ensure your networking nails it.
1. Showing up is a starting point. You have to go to events and/or get into the online vehicles that open you up to other people.
2. Once you meet a few people, it’s crucial to follow up or else the whole ‘meet and greet’ thing ends up being a waste of time.
3. Don’t ignore the network potential of your unread emails! Even read ones might have become victims of your over-extended memory and busy life, so revisit the people who wanted to connect with you.
4. It’s app to you! There are apps out there aimed at helping you network professionally, so give them a go.
5. Never be without a business card — even at the beach! It says something about your professionalism, if you can always help people find you to do business with you. Remember, if you want to go from being an ordinary to a great anything, you have to change the way you do things. And being a card-carrying fan of your own business seems pretty sensible. Don’t you think? In fact, the really smart networkers give out two cards and suggest to the recipient that if they know anyone who might like to be helped by them, “well, here’s an extra card.” That’s turbo-charging your networking!
6. On the back of the cards, write down some notes that will help further the connection. For example, if they say that they’re going on holidays or their son is about to graduate, make a note so you can send a note of congratulations. It’s about the relationship.
7. Do it with a friend! Some networkers do their stuff making sure they not only talk about themselves but others who might be a useful contact for the person met at a networking function. If this friend does the same, then you’re doubling your reach.
8. Get outside your comfort zone and take chances. Some people just can’t do networking face-to-face so I’d suggest you do some acting or public speaking course to build up your confidence. However, until that happens, make the best out of online options for networking and go for it.
Click here for the full article
Weekend video: The benefits of a bilingual brain
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.