By Rich Harvey, Managing Director propertybuyer
Welcome to our first market update. Last year saw some strong activity in the real estate market and we expect most markets to strengthen in 2014.
In this edition we look at:
- Property Market Predictions for 2014
- Client Stories
- "Get Wise with Wealth" 2 day Worksop 21-22 February
1. Property Market Predictions for 2014
There are only a few times in the property cycle where the conditions are ripe for greater activity. Now is one of those times. Property prices change due to a host of factors, but consumer and business confidence are two critical factors that help determine the direction of prices. And confidence has been on the increase.
While we have seen strong increases in the Sydney market, I believe there is still plenty of petrol left in the tank for the road ahead. I am not expecting double digit increases but a more sustainable growth rate of around 7% over 2014. The other bright spot on the radar is Brisbane which is expected to perform strongly this year. This will be driven by strong investor demand and many upgraders seeking a better home. I expect to see a resurgence of new listings in late January/ early Feb as those vendors sitting on the sidelines see the momentum that has built up in the market and decide to take advantage of the good conditions.
Lower interest rates have really been a strong driver of the property market and we have seen significant increases in borrowing for both investor and owner occupiers. I expect rates will remain fairly subdued in 2014 with a possible slight increase toward the end of the year. Some fixed rates are still around the 5% mark making it a very attractive rate.
The property market has shown strong recovery during the past year (2013) and each capital city has seen some level of growth. Across the combined capital cities, home values increased by about 10% per cent over the 2013 calendar year. According to RP Data, this was the fastest annual rate of value growth since August 2010, and the largest calendar year increase in values since 2009 when home values were up by 13.7%.
The capital cities driving growth were Sydney (14.5%), Perth (9.9%) and Melbourne (8.5%). Brisbane (5.1%) was the only other capital city to achieve growth in excess of 5% with each of the remaining capital cities recording annual growth of 3.5% of less.
There has been a lot of bubble talk around Sydney’s price rises which has been over-zealous commentary. With consistent housing shortages, there is still a long way to go to address the issues of undersupply in housing in Sydney. A bubble only exists where property prices have risen to such a level that an external economic shock will see prices deflate rapidly. During the GFC we saw the resilience of the property market and prices have now recovered very well. Our solid and prudential banking system, high levels of employment and growing economy mean the bubble merchants can take a break.
Other reasons to be optimistic for the year ahead include our Aussie dollar trading at around 90 cents US which makes our exports more competitive and property prices more attractive for expats and foreign investors. Exports are expected to increase as more mines come out of construction phase into production stage. The share market is also on track for a stronger year which will boost both household and business wealth. Lower interest rates are also having a positive effect on building construction. ABS reports that dwelling approvals rose 2.4% in November 2013 and have risen a total of 23.9% over the past 12 months.
The major challenges for the year ahead include the forecasted higher rate of unemployment (rising from 5.8% to 6.25%), the affordability constraints for the more price sensitive suburbs in the major capital cities and the possibility of regulation to be introduced by the government to cool the record levels of property investment activity.
Here’s the bottom line. Property markets take time to build up momentum and the run on prices usually lasts a few years, however, don’t expect prices to rise evenly over the cycle and don’t expect prices to go backwards in a hurry. Back in 1993 Sydney’s median house price was just $188,000. In 2002 everyone was aghast that the median price hit $350,000. Today the current median house price is over $700,000 and units $522,000. Property always looks cheaper in hindsight.
If you are in the market to buy a property, please call our office on 1300 655 615 to discuss your requirements, or email your enquiry. We would be delighted to help.
Rich Harvey is founder and Managing Director of www.propertybuyer.com.au, Australia's most awarded Buyers' Advocates. Propertybuyer helps property investors and home buyers search and negotiate the right property at the right price, everytime. Visit www.propertybuyer.com.au or call 1300 655 615.
2. Client Stories
Here is a selection of feedback from some of our happy clients last month:
Glenn & Tracie's story
"....did the key-work for research"
Glenn L,
Buyer type: Homebuyer
Buyer's brief: To move from a unit to a house to accommodate growing family
Location: Summer Hill, circa $1.2M
Our Goal
The prospect of doing everything ourselves made us feel anxious, we were concerned that a) we would be paying too much; b) the whole process being too long and; c) fear of making a mistake due to our lack of expertise.
Our Solution
By having an expert in the Sydney property market who did the key-work for research to guide us through the process and achieved a great result in a very short time frame. We felt relieved a major decision we were struggling to make in a very short time frame had been completed with less stress. If the thought of any part of the end-to-end process whilst trying to juggle your work and home life commitments fills you with anxiety, apprehension or fear, you should seriously consider engaging propertybuyer.
"…achieved a great result in a very short time-frame"
Buyers' Advocate, Anna Rorke
Glenn & Tracie had been looking on and off for several years to purchase a home for themselves and their 2 young daughters. It was important to them to be near transport to work and a good school to their children. We secured a property in their preferred suburb which met their criteria and gave them peace of mind with their decision. Having taken away the anxiety and fears in the process was a great relief to them both.
Maggie & Davyd's story
"We felt pleased and relieved"
Maggie T
Buyer type: Homebuyer
Buyer's brief: Looking for a home away from home, circa $550k
Location: Mosman
Our Goal
Our goal was to purchase a one-bed flat close to family, so we could stay a couple of days when visiting from Canberra. This is the second property Matt has found for us, this time we didn’t even bother looking without consulting Matt first. We were concerned that we would pay too much or get into a bidding war.
Our Solution
Matt is incredibly energetic, he knows his stuff and we trust him completely to do his very best for us. We feel pleased and relieved and would recommend propertybuyer unreservedly. Matt is very friendly, knowledgeable and always available.
"Matt is very friendly, knowledgeable and always available."
Buyers' Advocate, Matt Corbett
Maggie, in her own words, needed a “bolt-hole“ – somewhere close to the freeway to Canberra and close to her daughters home in Mosman. We located and secured a lovely one bedroom apartment with parking right in the heart of Mosman, walking distance to the village, shops, cafes and transport. Maggie and her husband Davyd were thrilled with their second property purchase.
3. "Get Wise with Wealth" 2 day Workshop - 21-22 February
One of the best things you can do in the New Year is educate yourself and take your investment knowledge to another level.
We are pleased to announce that we have been invited to partner with Chan and Naylor for their “Get Wise with Wealth” workshop. This is a special two day event held in Sydney on Friday 21st and Saturday 22nd February which will cover a vast array of topics including smart property investing and finance and super strategies. Chan & Naylor were BRW's #1 fastest growing accounting firm in Australia for 2013 and are specialists in property investment.
To take advantage of the early bird discount, you will need to book on or before Friday 17th January. The workshop will be a fully catered event that will give you a competitive edge when buying your next property along with great advice on asset structuring and detailed tax planning. Seats will sell fast and are strictly limited for this once a year event.
Click here for full details of the event and to book your ticket.
The 2 Day Workshop will cover:
- The Get Wise with Property Mindset
- Understanding structures and types
- Legally reducing your tax bill
- Structures for renovation, buy and hold and developing
- Building the Ideal Property Portfolio
- Depreciation (what they won't tell you) scrapping and demolition
- Investing with mates - Joint Ventures, tips and traps
- Partitioning Agreements - Pay no CGT or GST to change title after construction
- Self-Managed Superannuation - Negatively gear your Super to buy property
- Understand - CGT, GST General Tax, Stamp Duty and Land Tax
- Asset Protection/Estate Planning- How to protect assets in your own name without triggering tax
- Purpose of the loan - Using rental income to pay your home loan
- Estate planning - how to pass on your wealth and assets to your kids safely without the hefty tax bill or inadvertently giving it to unscrupulous in-laws
- Renovations for profit
- and much, much more!
Plus.....Receive the Bonus "Get Wise Starter Pack"
- Free 2 Hour Implementation Check with your local Chan & Naylor Partner valued at $395.00 - Taking the next step!
- Free 10 month access to The Chan & Naylor EXPERT team, to email any quick questions you may have along the way
- Complimentary access to Get Wise with Wealth Webinar series
- A DVD recoding of selected topics of the Get Wise with Wealth workshop
With the Get Wise starter pack you can get personalised advice for your situation designed to help you take the next step and implement the strategies you've learned at the workshop.
Information like this over a focused 2 day workshop environment presented by Australia's leading experts in property, tax, finance and self-managed superannuation is valued well over $2,000 per person.
Until Friday 17th you, your partner and a third person can attend this premier event for less than $950 each if you purchase one Double Ticket before this offer expires. The normal rates of $1,800. incl. GST per person will apply after this special offer expires.
Normal Price: $1,800 per person or $2,700 per couple
Special Early Bird Offer: $1,695 per person or $2,542 per couple
- For a limited time, you can take advantage of our special early bird offer and register yourself for a Single Ticket at $1,695click here to register and pay online
- Double Ticket @ $2,542, click here to register and pay online - Double Tickets enable a second person to attend the workshop with you at half the cost of the discounted single ticket rate.
- PLUS, an addional bonus when you book a Double Ticket - a THIRD person can attend the workshop for free
If you register before 15th January you will SAVE more than $100 on the price of a single ticket and over $150 for a double ticket.
General Information:
- Dates: 21st - 22nd February 2014
- Venue: Northside Convention Center
- Address: Cnr. Oxley Street & Pole Lane, Crows Nest, NSW 2068
- Times: Friday 21st 8.00am for Registration 9.00am - 5.00pm Presentations
- Saturday 22nd 9.00am - 5.00pm Presentations
**** Please note: this event is fully catered
For more information please click here
