propertybuyer Market Update, March 2011
By Rich Harvey, Managing Director propertybuyer
Welcome to your March propertybuyer market update.
In this edition we will look at;
- Market Update
- Positive Cashflow & Discount Properties (exciting new service)
- Creating a Cashflow Positive Property - Seminar 4th May
- Client Stories
1. Market Update
This week the Reserve Bank (RBA) released the minutes of their March Board Meeting this week and at this meeting the RBA Board decided to keep the official cash rate unchanged at 4.75%. Subsequently, the standard variable mortgage rate remained at 7.8%. The minutes of the meeting highlighted that a lot of the domestic data flows were beginning to provide evidence of the impact of the floods. The RBA expects that the impact of the floods is likely to take 0.5 percentage point off growth in both the December and March quarters. The minutes also highlighted that outside of the resources sector the economy remains soft. Consumer confidence has been trending lower, retail sales growth and housing market activity has also been much softer in recent months. Of the minutes, the most notable was the decision to keep interest rates on hold, they state: `Interest rates on loans were slightly above average, a level reached after the monetary policy decision taken in November 2010. Members judged that this mildly restrictive stance of policy continued to be appropriate. The Board therefore decided to leave the cash rate unchanged.´
The RBA also released the January monthly credit and debit card statistics. As we have highlighted a number of times, the average Australian consumer is becoming more conservative and the latest round of figures continue to support these trends. During January 2011 the average outstanding balance on credit cards was $3,214, increasing by just 0.8% over the year. Although the outstanding balance has risen only marginally over the year, the total number of transactions has actually increased by 8.7% over the year. These results suggest that people are still using their credit cards but have a greater propensity to reduce the outstanding debt. Debit card statistics show that although there is a greater number of credit card transactions over the year, where possible consumers are using debit cards, with transaction volumes up 25.8% over the year, the greatest increase on record.
Advertised Stock on the Market
The number of new properties advertised for sale over the last week increased by 1.9% and is now at its highest level since the week ending 28 November 2010. The number of newly advertised properties for sale is 25.9% higher than it was at the same time last year. The total number of properties currently being advertised for sale is at the highest level of any week since the beginning of 2007. The elevated stock level is largely due to the difficulty vendors are having selling their properties as investors and first home buyers remain on the sidelines. The total number of properties advertised for sale increased by 1.7% last week and is 24.2% higher than at the same time last year.
Latest National Auction Clearance Rates
The weighted average auction clearance rate across the combined capital cities took a nose-dive last week, recorded at 48.4% following a clearance rate of 55.4% the week prior. Importantly, Vic and SA both had long weekends and the volume of auctions were substantially lower during the week, in saying this clearance rates were relatively steady in Adelaide however, rates dipped in Melbourne. In Melbourne, clearance rates fell to 55.7% last week from 62.5% the previous week. Sydney´s auction clearance rate was relatively steady, recorded at 53.3% last week and 53.4% the previous week.
2. New Services - Positive Cashflow Property, Discount Properties & More...WOW!
Positive Cashflow Property
At propertybuyer we will show you the smart way to turn one property into two incomes. Utilise the skills and experience of Australia´s leading property buying agents to find a positively geared investment property in Sydney or around Australia. We make it easy for you to create a positive property portfolio to secure your financial future.
Finding cash flow positive properties is hard work. We work exclusively for buyers helping you source properties that match our 20 point checklist. We have a fully transparent fee structure that pays for itself many times over!
We use a number of different positive cashflow property strategies such as renovations, granny flats, garage conversions and subdivisions to name a few. We'll help you find that perfect positively geared investment property to super-charge your portfolio. This is a new approach to changing the use of existing properties and takes advantage of Government initiatives for increasing residential density.
We offer these key benefits:
Positive cashflow properties with yields up to 10%+ pa*
Buy under market value
Truly independent and impartial
Dedicated research team
Change the use to increase the cashflow Before renovation
Access to licensed trades people at discounted prices
No secret fees or kickbacks
Existing house and land in established Sydney suburbs
Every aspect of the process from purchase through to tenancy is managed by our team
Well developed property enhancement process
Puts cash in your pocket each week
Team of trusted and award winning professionals. After renovation
Call now to speak with our positive cashflow expert Stewart Fraser on
1300 665 615or click here to email your enquiry today.
Stewart Fraser, Buyers Agent and Investment Specialist
* Disclaimer: The actual returns achieved will depend on your personal financial situation, interest rates, deposit, loan amount and investment property selected.
As we are constantly searching the market, we often come across well priced property that would represent an excellent buying opportunity. We can especially target distressed developers, deceased estates, mortgagee sales, motivated vendors and other sellers that may offer property at a discount to market value.
4. Seminar - Creating a Positive Cashflow Property Portfolio
Have you ever wondered how some property investors manage to buy multiple properties and create a large portfolio?
How many properties do I need to retire?
Or is it more about the value of properties?
What is the right balance between cashflow positive and growth properties?
How do I secure finance for so many loans and how can I afford it?
How do I protect the equity I have created in my properties?
What size finance buffer is adequate?
Should I diversify across different states to reduce land tax?
Which property types provide the best overall return?
What structure should I use to minimise tax?
Real life portfolio building examples
If you have ever asked any of these questions then this seminar is for you! We will cover these meaty topics and more on the night. Bring your notepad, pen, calculator and an open mind to learn.
Date: Wednesday 4th May 2011
Time: 7pm-9pm (6.30pm for registration, drinks, nibbles and networking))
Venue: Castle Hill RSL, 77 Castle Street, Castle Hill.
Investment: Early bird discount $29 Single ticket, Double $39 (book before Friday 29th April)
(Standard ticket price: Single $39 and Double $49)
Book now at this link: http://www.stickytickets.com.au/5352
FREE ebook - As a thank you for coming to our next seminar all attendees will receive a complimentary ebook "How to Find Property Hot Spots - a powerful desktop research guide" by Jeremy Shepherd.
Buyer Type: Investor
Buyers' Brief: Interstate investor looking for an apartment in good condition with good yield
Asking Price: $575,000
Purchase Price: $550,000
Appraised Value: $570,000
Buyers' Agent Comment:
Adrian and Claire were a middle-aged couple from the ACT, looking to build a small portfolio of relatively low maintenance properties with their self-managed super fund. They wanted blue-chip suburbs with solid capital growth and a rental yield around 5%. I met with them both on the Saturday morning and spent the day with them between Sydney´s lower north shore and northern beaches. We first attempted to purchase a property in Manly, but the vendor wouldn´t budge on her price, so we moved on to a property in the neighbouring suburb of Queenscliff. It was a mortgagee sale, 2-bedroom apartment with security parking, about 400m to the beach. The unit was in very good condition and there was a tenant paying $550pw, who was happy to stay on. We purchased the property for $550,000, hence a 5.2% yield and upon inspection, Adrian was very impressed.
What our clients say:
"We are first-time property investors from interstate. When our financial advisor suggested we use a buyer´s agent, we were sceptical. Having spoken to the team at Propertybuyer, we became more comfortable with the idea, and our experience since then has been wholly positive. Matt Corbett provided us with an excellent service which included information and advice about all aspects of securing a sound investment property. Matt dealt with all our queries and led us through the buying process with a minimum of fuss and maximum efficiency. We are delighted with the property we´ve bought and the help we´ve received. We would not hesitate to use propertybuyer again and recommend them unreservedly to other buyers."
Adrian and Claire (Consultants)