Property Investing in Australia: Market summary - Sep 2015

Property Investing in Australia: Market summary – Sep 2015

100115It’s hard to believe that Christmas is only a dozen or so weekends away, isn’t it? It seems that 2015 has zoomed by at record speed, albeit with a lot of game-changing policy announcements along the way, which have impacted investors in a big way.

The biggest and most impactful announcement, of course, was APRA’s move to put the brakes on Sydney’s booming property market, by restricting investor lending. Top economist Dr Andrew Wilson of Domain Group has this month shared his views on APRA’s investor crackdown, and they’re not all together favourable.

Housing lending now accounts for around 40% of banking industry assets in Australia, which means we are all banking on housing lending remaining ‘as safe as houses’ check this site out. Could APRA take further action to make sure this is the case? Read more here.

With Sydney’s ever-increasing median property values snatching more than their fair share of headlines, some new research came out in September that was quite surprising. Interestingly, it found that in the 12 months to June, more than one third of all home sales nationally (37.4%) were purchased for less than $400,000!

Meanwhile, Herron Todd White’s most recent property clock has some surprising indications. Not everyone agrees with their positioning of Sydney on the property clock; what are your thoughts?

Although it may not seem like it, property in Australia is actually more affordable now than it was 12 months ago – with the exception of one state, of course. There are also some indications that Brisbane is showing signs of becoming Australia’s next real estate boomtown. That’s what the REIQ is suggesting, after revealing new figures that place the city’s median house price at above $600,000.

The latest news on vacancy rates has been released this month, showing that Hobart vacancies are down, Darwin is up, and Perth officially has the highest vacancy rates out of every capital city market Australia-wide.

We were also reminded to be careful when anyone mentions the words “property hotspot”. To me, that phrase is an instant ‘red flag’. You should always do your own personal due diligence to ensure a potential property stacks up for you, rather than following the masses. Read more about the latest “hotspot” that experts are starting to warn against here.

For those who are actively shopping for their next investment, these are the suburbs that people don’t want to move away from. Perhaps you’ll find some

investment inspiration on this list? CoreLogic/RP Data have also released some info about the highest growth areas in the country. Remember: be sure to research historical performance, as recent growth is not strong enough to act on in itself. Read more here.

Alternatively, if you’re not yet at the buying stage as you’re busily accumulating your deposit, perhaps crowdfunding – one of the latest trends in property investing – could be worth investigating. Those who are at the stage of applying for a mortgage must review my list of ‘6 Mistakes to avoid when applying for finance’; there are some real doozies on this list and they can really crunch through your profits.

As the last quarter of 2015 begins, the experts weigh in with their predictions of housing trends in the half-decade to come. Will your property investments perform as you’re projecting?

Lastly, let’s end on a positive note for mortgages holders: research is showing that the RBA may cut rates again next year! While RBA boss Glenn Stevens has said, “We’re pretty content with where we are now,” there is talk of one or even two rate cuts in 2016.

What impact will this have on your finances if another rate cut is delivered and passed on by your lender? As a guide, a reduction of 0.25 per cent on a $500,000 mortgage equates to an interest saving of $1,250 per year. It’s not going to make you rich, but it will certainly help with cashflow as you ponder your next investment decision, wouldn’t you agree?

Til next time, happy investing!

Helen Collier-Kogtevs

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