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The impending rate rise this coming Tuesday will have significant implications on the property market where home prices have increased by over 3% in the September 2009 quarter. Key points to note:

• The Reserve Bank is targeting inflation and not trying to curb rising home prices.
• Due to the current state of the economy being stronger than any developed nation in the world, the RBA feels that interest rates are no longer justified to be at 49-year lows.
• A 50 basis point increase will be the largest hike since February 2000 and will add $90 a month to a $300,000 mortgage. However, experts feel this is unlikely to have a significant dampening effect. Home buyers have already factored in a series of rate rises into their budgets.
• However, a rate rise is likely to induce certain people to make snap decisions, which experts agree is unwise. Unless you are getting into the market for the first time, the notion that buying now to avoid impending rises in home prices will only contribute to a property bubble which will burst sometime in the future. Previous burst bubbles have wide-spread effects on all people.
• BIS Shrapnel predicts that Australia is at the verge of a property bull market and that prices will double in 12 years. This prediction coupled with rising home prices are fuelling the anxiety to buy now. To me, buyer urgency is only justified if you do not currently own a home and is paying high rents due to the acute dwelling shortage all over Australia.

If you are looking for your first home and want to get out of the rental trap, I would advice doing a thorough financial check to ascertain your affordability for getting finance, then do the mandatory research and consider buying your home along established principles. The why, where, when, how and what to buy are now important considerations in view of upward pressure in interest rates. Good luck and I wish you all the best in the hunt for your new home.

Popularity: 28% [?]

The average house price in Sydney has broken the $600,000 mark in September 2009 for the first time.

This increase augurs well for existing home owners who have bought into the property market in earlier years and this new equity will allow them to upgrade into more expensive dwellings.

However, this news is not good for those who are trying to get into the property market for the first time when interest rates are on the way up as the First Home Owner’s Grant is being wound back.

Factors which are driving prices up include an acute shortage of new dwellings being built. Nationally, new dwellings have decreased from 173,000 in 2002 to 124,000 in 2009. At the same time, net migration into Sydney has increased. Another factor contributing to price increases is strong investment demand from Chinese investors. Reports have shown real estate agents in both Sydney and Melbourne taking on Mandarin speaking agents to cater for a surge of buyers from China. Record low interest rates and the FHOG over the last year have also supported the property market to a large extent.

The unfortunate truth to this price rise phenomena is that established home owners will continue to become better-off while those who are trying to get into the property market will be forced to move further away from suburbs which are close to Australia’s capital cities.

Granted there are those who prefer to stay away from the urban areas and enjoy a more relaxed and laid back lifestyle. However, the reality of a much higher concentration of job opportunities means that many who work in our capital cities have no choice but to either pay higher rents, juggle a huge mortgage with the family budget or forced to commute longer distances often with longer traveling time and having gradually less time for family and friends.

Popularity: 25% [?]

A few years back, banks and non-bank lenders were keen to finance homeowners who can demonstrate a steady income each month to repay their home loans. Since the global financial crisis, financial institutions are a lot more vigilant these days and have tighten their lending criteria.

Based on my own experience, the following areas were key to getting a home loan approved for your home or investment property:

1. Develop a relationship with your chosen bank / lender / mortgage broker.

In the course of shopping for a home loan, try to talk to a few banks / financial institutions to get a feel for competitive mortgage rates and other pertinent terms and conditions of the loan. If you decide to use a mortgage broker, he will be able to advise you on the most appropriate package for your needs.

Finding a mortgage broker is a lot easier these days with the internet and healthy competition in the home loan market. I have found that developing a relationship with my bank manager or an agent which acts exclusively for a particular bank to be a useful partnership.

Over time and a few home loans, the manager / agent understands your needs, your financial background and your ability to service your home loans. By earning commission for the life of your home loan, the manager / agent is incentivised to take care of your needs so that you don’t go to a competitor.

2. Understand your financial capablities.

Be upfront and honest with the bank with regards to your financial capabilities. You obviously do not need to tell the bank “everything” but the point here is to make the bank feel comfortable that you are able to repay the home loan in a timely and consistent manner.

Therefore, it pays to do some initial homework, number-crunching and work out a reasonable monthly budget for your family which takes into account the home loan BEFORE seeing the bank.

I always think “help yourself by helping the bank”. You can do this by working out your monthly living expenses, existing debts eg. credit card and personal loans after deducting all your superannuation and tax to get a good feel for your disposable income.

This will provide a lot of clarity to both you and the bank as to the level of your affordability. Mortgage calculators will help you work out how much you can borrow according to your earning capabilities and existing financial obligations.

3. Prepare and organise all your documentation.

The documents required to process a home loan will vary according to different financiers. As a general guide, you will need documents to verify your identity such as birth certificate, driver’s license, passport, Medicare card and credit cards. Your financier would like to see your pay slips, tax returns, bank statements, letter from employer confirming salary, statements of asset & liabilities, title deeds, records of savings etc in order to process your loan.

Organising these documents effectively provides confidence to the bank manager that you have a good understanding and are in control of your own personal finances.

Good luck and happy loan hunting!

Popularity: 20% [?]

Apart from charging a reasonable rate for managing your investment properties, I value the following criteria which makes a great property manager:

1. Service and responsiveness

The time when you need your property manager most and the acid test to his capability is in finding you quality tenants. A good property manager will not accept the first or any tenant that comes along but will diligently check references to ensure your tenant is of good repute, will pay rent in full and on time and will take good care of your property over the course of the tenancy. Responsiveness in putting up advertisements, conducting inspections with tenants and having good knowledge and information about your properties is key to being able to effectively market your properties to the desired tenants. Good property managers will have intimate knowledge of rental and vacancy rates in your suburb, understand local trends and attractions and be able to advice you on your obligations as a landlord to attract and secure quality tenants.

A good property manager will also never hand out keys to tenants for them to do inspections unattended. Yes, believe me that some property managers do just that and if and when that occurs, it’s time to look for a new manager.

Property managers are usually a part of a real estate agency whose core business is in buying and selling properties for their clients and earning good commission from that process. Therefore, the property management aspect of a real estate agency is usually a support function or a secondary priority business and can sometimes be viewed as being “less glamorous” by certain agencies.  One way to ascertain good property managers is whether there is a separate function within the real estate agency with staff specifically dedicated to taking care of rental properties and maintenance.

Good property managers also have their preferred listing of plumbers, electricians, locksmiths and other important tradesmen with proven and tested quality workmanship to call upon in the event your properties are in need of repair or maintenance. This will ensure repair and maintenance work on your properties will be carried out effectively and at competitive prices.

2. Attention to detail and documentation

Keeping proper records such as repair bills, utilities, providing detailed monthly statements, yearly summaries for tax purposes are all part of a good property manger’s traits in keeping a client informed and having your properties under good care.

Periodic inspections with updated photos  on the state of repair of your investment properties are part of the service accorded by some of the better property managers.

3.  Website

A good indication of a good property manager is the quality of his website. Needless to say that you should not even bother with property managers who do not have a website. Check  your property manager’s website to ascertain if he has an objective or mission for customer / landlord care, staff who are dedicated to property management, the number and type of properties for lease, testimonials etc.

4. Tenant care

A good property manager not only has your interest as the landlord at heart but will also attempt to understand and appreciate your tenant’s reasonable needs and requirements. As a landlord, you should also appreciate that any reasonable request by a tenant should be considered because a happy tenant as opposed to a disgruntled one will also have your property at heart. This will ultimately develop into a win-win situation for both landlord and tenant over the long run and minimise tenant turnover which costs more time and money than keeping a good tenant happy.

Overall, a good property manager will ensure your properties are always tenanted, rent monies paid on time by the tenants and deposited into your bank account in a timely manner, repairs and maintenance carried out effectively and most importantly, keep good records on your behalf and keep your tenants happy for a mutually beneficial relationship.

Popularity: 10% [?]

The Waterfront overlooking Homebush Bay, Sydney

The building design, colours and materials used, landscaped gardens and the water foreshores  at Waterfront apartments in Homebush Bay is inspired by a lifestyle that is typically Mediterranean. The names of each building block such as Palermo and Valencia is also reflective of the mood of a sundrenched holiday resort by the Mediterranean sea.

The Waterfront will eventually be gazetted as a new suburb in this Sydney inner west location which is approximately 17km from the CBD. This suburb is relatively quiet with a village feel because it is tucked away to one corner of Homebush Bay. The calm and serene water foreshore atmosphere is perhaps is most attractive feature of living in this suburb. Other than that, there are a host of reasons why apartment prices at this suburb has not taken off despite it being almost a decade old where the older apartments were constructed during the time of the Sydney Olympics in 2000. Prices of newer apartments in its neighbouring suburb of Rhodes, which is a much newer suburb, is well and truly higher than those at the Waterfront development and Homebush Bay in general.

Drawbacks on living at the Waterfront development:

• Although the suburb is serviced by local community buses, public transport may be an issue due to its location at Hills road / Bennelong Pkway. The ferry wharf is approximately 1km from the development whilst the Olympic Park train station is too far a walking distance by any measure.
• Traffic and access to the development via  Australia Drive can be very congested during peak hours. Worse still, you are better off delaying your trip home during these hours if there is an event or a football game at nearby ANZ stadium in Olympic Park.
• Although serviced by a few local shops, cafes and restaurants, this suburb lacks the array of amenities to cater for local residents.

The median unit price in Homebush Bay as at June 2009 was $470,000.

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Popularity: 37% [?]

I recently inspected this stylish  award-winning home which is located on the western end of Subiaco at the corner of Trillo road. In addition to 4 double bedrooms, this house has a home theatre, study and covered alfresco areas on both levels.

Distinctive features which I like about this house:

• The house is built on an elevated vantage point from the Trillo road level.
• Good architectural design and layout – the open plan living and kitchen areas are seamlessly integrated with the north-west aspect of the outdoor area, a conducive feature for entertaining.
• Master bedroom and study is privately located at one corner on the second level while the other 3 bedrooms are located at the ground level.
• Very high quality finishes in the kitchen, bathrooms with spa, double showers and quality tapware. Main ensuite has separate WC.
• Theatre room has built in surround sound system, recess ceiling design, mood lighting, ceiling projector and kitchenette with French doors opening onto a covered outdoor alfresco area.
• The north-west aspect accords ample natural light to all living and outdoor areas.
• Under stairs storage / wine cellar.
• Private elevator connecting ground to second level.
• Feature corridor on ground level leading to stair well and elevator access to second level.
• Location wise, this corner of Trillo road is approximately 700m stroll east to the conveniences of retail and commercial areas of Subiaco.

The vendors are considering offers of around $1.8 million upwards. The land area of this property is approximately 300sqm. This property is listed under local agents Coakley and Martin. Council  and water rates: $2655.20 & $1,352.75 per annum respectively. The median house price for Subiaco in June 2009 is $1,225,000, 5-year growth is 125% and annual average growth is 13.8%. For more information on the suburb of Subiaco, please visit this post.

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Popularity: 24% [?]

One of the most important aspects of property investment is to ensure the final product is in accordance to what was agreed upon at the point of exchange of contracts. This applies to all types of residential property – houses, semi-D’s, townhouses and apartments and is especially so for units bought off-the-plan.

The pre-settlement inspection is a process to allow the buyer to inspect and identify any defects, flaws in workmanship and variations to contract specifications. These issues are the responsibility of the vendor / developer to rectify to the satisfaction of the purchaser within the terms and specifications of the contract of sale. Although purchasers are generally protected against building defects by a 7-year home builders’ warranty, it pays to identify defects at the onset so that all rectification works can be carried out prior to or immediately after final settlement.

Current building and pest reports are also useful for buyers to ascertain issues such as termite infestation, rising damp and structural integrity of building and construction.

A copy of Strata Living – What you need to know about living in your strata community can be obtained from the NSW Office of Fair Trading, Department of Commerce. It is a comprehensive guide to assist residents to deal with issues arising from apartment living.

Here is a general checklist of items which should be inspected and tested to be in good state of repair and working condition to assist home buyers conducting a pre-settlement inspection. This checklist of items should be used as a guide or reference only and to prompt the buyer for other items which may have been omitted. I make no warranty this checklist is neither exhaustive nor complete as it is based solely upon my experience and research. Buyers should make additional notes against these items and conduct further detail inspection if required.

A. Electrical and systems

• Main electrical switch board location
• Water mains
• Lighting
• Air-conditioning
• Gas ducting
• Heating
• Powerpoints
• Telephone / TV / antenna ducts
• Intercom, security video systems
• Ducted audio / hi-fi system

B. Utilities, appliances, fixtures

• Current utility company for a. Electricity b. Gas c. Telephone d. Water
• Storage, closets, wardrobes, linen cupboards, cellar, attic, basement store, garden shed, pool shed
• Security keys, locks
• Toilets
• Bathtub, shower heads, basins, tapware
• Kitchen equipment – fridge, freezers, dishwasher, microwave, oven, stove-top, rangehood, insinkerator, filtered and hotwater system
• Laundry – washing machine, dryer, laundry sink, retractable clothes lines
• Fireplace – gas heaters and maintenance
• Collection days for: a. Garbage b. Bottles c. waste and used papers d. bulky items
• Gardening, lawn mowing and landscaping

C. Structural and internal fittings

• Roof tiles, roof gutters, down spouts, splash blocks
• Wall paint – scratches, cracks, nicks
• Wall tiles, floor tiles
• Windows and door seals
• Glass doors and windows
• Ceiling and floor skirting
• Carpet installation and seams
• Floor surfaces
• Ceiling height
• Wooden floors, outdoor wooden decks
• Wood joinery
• Bench / countertops

D. List of current / useful contractors / tradesman and contact numbers and warranties

• Remote control gates
• Pool repair and maintenance
• Airconditioning / heating
• Spa / sauna maintenance
• Kitchen equipment and appliances warranties
• Private elevator maintenance
• Gym equipment
• Automatic / electrical blinds, shutters, overhead roofing maintenance

Popularity: 100% [?]

The recently completed Motto apartments in Erskineville by Austcorp is now ready for occupation. Most of the 2 bedroom apartments within this development are maisonette style – double storey living with its own internal stairs and the master bedroom usually on a separate level from the living and dining areas for added privacy.

The  Motto apartments are beautifully constructed, with quality kitchen equipment, bathroom finishings and spacious living areas. It is also approximately 5 minutes stroll to the Erskineville train station.

Apartment C420/2 Nassau Lane within this development is a 2 bedroom, 2 bathroom and 1 secure car space unit and has recently been leased at $650 per week through property management company Let’s Rent. This apartment is a maisonette style with internal laundry, ensuite and private balcony.

Please refer to this post for more details of Motto apartments.

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Popularity: 27% [?]

I visited the Verve apartments in Erskineville yesterday and inspected several apartments within the development. This development by AV Jennings appears to be well ahead of schedule whereby the initial target completion date of 20 December 2009 has now been revised to 4 December 2009. Many units are now open for inspection by purchasers who have bought into this development. Based on my inspection of several units, it appears the finishings are of good quality. Ceasar stone benchtops are used for the kitchen and are complemented by Smeg / Omega kitchen appliances. Bathroom fittings, toilets, basins and tapware are of good quality and design. Floor plans are generally well designed with ample living space, good size bedrooms and open plan kitchens. Balconies facing with the west aspect overlooks the serene internal gardens, tennis court and swimming pool of the neighbouring Zenix development. This development is approximately 350m to St Peters train station and also within walking distance to the cafes and restaurants along King street in Newtown. Other amenities include Sydney Park across the road to the south of the development and a short stroll to the Erskineville cafes and restaurants. Sydney University campus is also a short drive from this suburb which is approximately 4km south of Sydney CBD.

See a comparison of Verve vs Motto apartments in Erskineville.

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Popularity: 33% [?]

Auction clearance rates in Melbourne and Sydney last weekend were 80% and 62% respectively despite the Spring racing carnival and Caulfield Cup in Melbourne.

The Housing Industry Association’s affordability index dropped 3.3% (from 153 to 147.9 index points) in the September 2009 quarter from a mere 0.4% drop in the June 2009 quarter. According to a senior HIA economist, the outlook for housing affordability is not good as interest rates are expected to increase over the next 6 months, whilst the first-home owner’s grant will be faced out completely by 31 December 2009. In addition, the process to increase housing supply is still facing a lot of barriers.

Over the last year and a half, the RBA has reduced interest rates by 425 basis points to a 49-year low prior to the recent 25 basis point increase. Coupled with the Federal government’s boost to the First Home Owner’s Grant and significant growth in immigration, the property market has been very strongly supported by these factors.

Victoria recorded the biggest drop of 9.3%, followed by 5.5% in New South Wales, 5.1% in Tasmania and 3.9% in Western Australia. On the other hand, ACT and South Australia’s affordability improved by 3.8% and 2.2% respectively.

Popularity: 17% [?]

Subiaco is an obvious attraction to any visitor to Perth for its vast array of restaurants, cafes, pubs, shopping and markets.

Conveniently located 3km west of the Perth CBD, Subiaco locals like the area for its convenience. You can walk to all the local amenities and attractions if you stay around the western end of this thriving suburb close the Subiaco Oval, which is home to West Australian Football. Local shopping centres include Subiaco Pavilion, Subiaco Square, Subiaco Village and Home Base. The University of Western Australia and Central TAFE are among learning institutions which have established local campuses in Subiaco. Subiaco Centro is a thriving residential, commercial and retail hub which include local amenities such as the Princess Margaret Hospital for Children, King Edward Memorial Hospital for Women, Perth Modern School, Subiaco Arts Centre, Rosalie and Shenton parks. Subiaco is also served by the Perth to Fremantle train line.

Pond at Rossello Lane, Subiaco

Among the more favourable streets in Subiaco are Rossello Lane in the north western end of the suburb where the north and north east aspect faces a man-made pond.

Why I like Subiaco

• Convenience “all in one” suburb where you can do your local groceries, walk to restaurants, cafes, movies and shops
• Proximity to train station and CBD

However, the residential area closer to the oval can be noisy, especially during local footy games and is therefore open to more public traffic. Lack of privacy may be an issue in these areas.

Vital statistics

Source: Your Investment Property, June 2009

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How it’s calculated:

Median price: Median price for the 12 months to February 2009

Average annual growth: Average percentage change over the past 10 years as a per annum figure

5-year growth: Median price percentage change over the past 5 years to February 2009

Weekly median advertised rent: Median price of rental listings for the 12 months to February 2009

Gross yield: Estimated rental return, based on advertised rent to median price

Popularity: 22% [?]

The recent interest rate rise of 0.25% to 3.25% will have little impact on the Australian economy considering the level has been reducing over the last year to historical lows and that consumers have been factoring a rise in recent months. The economy has been performing well and will continue to be resilient as long as subsequent anticipated interest rate rises are gradual. The RBA will continue to ensure the balance between growth and overheating against a stagnating economy is well managed.

Popularity: 16% [?]

Despite the FHOG being gradually reduced recently, auction clearance rates were still holding up with first home buyers trying to secure the benefit during the last week of the grant. Clearance rates for Sydney Melbourne and Brisbane last week were 67%, 86% and 67% respectively.

Analysts feel that house prices will not be significantly affected as a result of the gradual withdrawal of the grant. The winding back of first home buyers will see investors returning into the market. There may be some minor softening in prices but it will not be significant.

By far the greatest impact of the FHOG in New South Wales have been in the western suburbs of Sydney. Please refer to the list of the First Home Owner benefits – Top 20 postcodes.

Popularity: 17% [?]

One of the key rationale for the recent interest rate increase given by the Reserve Bank of Australia was that the economy has performed incredibly well compared to all the major developed nations around the world.  Unemployment remained steady at 5.9% although this figure is expected to increase over 2010.

Given the cash rate of 3.00% was at historical 49-year low prior to the rate rise, the RBA felt this level of interest rate is no longer required in view of the recent economic performance. It is expected the cash rate will gradually increase over the next 6 – 12 months.

Popularity: 15% [?]

Sydney Opera house and harbour bridge by dusk

Today, savvy investors take a global view of business opportunities because they understand the best opportunities may lie beyond their own shores.

Due to its historic origins, investors from the UK have sought out Australia as an investment safe haven. In recent times, Asian investors are realising the favourable attributes of investing in Australia:

Transparency of government and political stability

Australia advocates democracy in its political system and is among one of the world’s most stable economies.

Strong economic fundamentals and financial system

Australia’s economic credentials is based upon strong economic management by the government, a well-regulated financial system and highly skilled labour force. As a result, Australia has recorded 15 consecutive years of continuous economic growth from the mid 1990s and enjoys a very high standard of living.

Rule of law

Australia has an established legal system with a strong advocacy for consumer protection.

Multiculturalism and lifestyle

Australia enjoys one of the most attractive lifestyles in the world due to its climate, established and well-maintained public amenities such as schools, hospitals and transport systems. As a result, it has attracted migrants from diverse cultural and ethnic origins to form a tolerant and multicultural society.

Proven capital growth in real estate

Australia’s real estate has experienced strong capital growth due to its established urban infrastructure and facilities, moderate climate and the natural beauty of its coastal landscapes.

Housing Affordability

Australia real estate is competitive compared to many developed countries. Its close proximity to the developing economies of Asia has seen strong foreign investments into its residential, commercial and industrial real estate.

Rules apply to foreign investors. Feel free to post your enquiries or comments about foreign investment here.

Popularity: 17% [?]

Over the last 10 months, the Reserve Bank of Australia shed more than 4% off the cash rate to the current 3% which is now at a 50-year low. Capital cities around Australia continued to experience an acute shortage of housing stock where most cities had an average rental vacancy of less than 2%, thus fuelling strong rental demand. The Rudd government is determined to support the economy through this crisis by extending the First Home Owners Grant of up to $24,000 for new dwellings to the end of 2009 and continue to provide concessions for stamp duty to assist home buyers. The combined effect of all these factors was an over-whelming attractiveness to get into the property market for first home buyers and investors alike.

The main features and compelling strengths of this 1 bedroom apartment in Marobra are as follows:

Maroubra bay, Sydney

Development of residential, retail and commercial property in Maroubra Junction such as Pacific Square has transformed and increased prices of apartments in this area. However, I believe that pockets along Maroubra and Fitzgerald roads which are close to the beach are still relatively inexpensive compared to the junction area. It enjoys a closer beach and ocean front atmosphere, at the same time close enough to access the amenities of the junction without having to contend with traffic.

My second purchase was an off-the-plan 1 bedroom apartment in the Dee Why Grand development ~ an integrated residential, retail and commercial project which includes the upgrade of the iconic Dee Why Hotel. This development is located right at the heart of Dee Why’s commercial and retail precinct along Pittwater road. I foresee this development to be the dawn of a new cycle of gentrification in the area similar to how Pacific Parade has transformed properties around Maroubra junction in a little over 5 years.

Dee Why beach, Sydney

The main features and compelling strengths of this Dee Why property are as follows:

The third of the 3 properties was a 2 bedroom apartment due for completion in December 2009 in the Verve development in Erskineville. I have conducted research on suburbs which are close to the CBD with good access to public tranport and amenities. Such suburbs which have not seen a significant rise in value will have their day over the next 5 – 8 years and I believe Erskineville to be one of these suburbs. The latest Market Review by John McGrath of McGrath property agents appears to support this view.

Sydney Park, a leash-free park in Sydney

The main features and compelling strengths of this property are as follows:

Popularity: 28% [?]

The thing I like about Tasmania or Tassie as it is affectionately known, is it’s fresh air and friendly people, not that you can’t get any in mainland Australia. However, if you have ever lived in Sydney, you will find that Hobart offers many similar experiences ~ a harbour city, Salamanca markets not unlike the weekend markets at the Rocks , the Hobart fish market, the Tasman bridge to remind you of THE harbour bridge and the Cascade beer brewery to rival any of Sydney’s best. However, there is something about Hobart that Sydney can never match ~ as a visitor to beautiful Hobart, you will get to know its CBD and surrounding suburbs intimately within 15 minutes of studying the local map.

What I like about this property and West Hobart:

1. West Hobart’s location is very strategic ~ Property is literally 1.5km from Hobart CBD or 10 minute walk. It is located in the heart of West Hobart which is on a hill. The top floor outdoor deck looks east into the city with harbour views. West Hobart is an affluent suburb popular very close to the CBD.

2. Architecturally designed landed property.

3. Large proportion of young professionals and renters in West Hobart*

4. No strata levies, total outgoings (water and council rates) are relatively low at $1,880 per year.

Important points to note:

1. Unusual floor plan and open concept may not be practical for families.

2. Although master bedroom is on the top level, it does not have an ensuite.

3. Heating may be an issue for the lower levels in winter due to open plan and heat escaping to high loft areas.

4. The bedrooms are open plan (ie without doors) and privacy and noise control (eg sound of TV and stereo from living may be audible from the bedrooms). Watching TV and listening to music with headphones may be a satisfactory solution for certain people.

5. Laundry facilities and storage may be limited.

6. Kitchen storage and fridge space may be limited.

7. Rental history ~ This property was built circa 1996 has never been rented before.

8. No Sydney Opera House? I thought you would never ask and besides, it’s not relevant here.

The Financials

1. Initial asking price was $430k and I believe it to be a good buy in the high $300k’s to low $400k’s. The average house price in the suburb of West Hobart is $415,000**.

2. I estimate rental for this property to be between $370 – $420 per week. This estimate is based on comparison with similar properties in the suburb only. (Note: Research was not conducted on similar properties within neighbouring suburb).

3. The average rental for houses in West Hobart is $350 per week and 4.4% yield per annum**.

4. Capital growth for West Hobart is 12.66% per year**.

Last Words

Great location and good buy at around the $400k mark. Be prepared to spend extra on rectifying practical living issues.

Source:

* Your Investment Property June 2009

** Your Investment Property July 2009

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Popularity: 22% [?]

Tucked away just 11km north of the CBD, Castle Cove is exclusive and a sanctuary for nature lovers. Deepwater road runs the length of this peninsula suburb which is spread eastward from its access point at Eastern Valley Way. It boasts a short 9-hole golf course, north facing luxury homes along Neerim and Willowie roads with serene water views of Middle Harbour.

Why I like this property and suburb

• Quiet and secluded, this location permeates a calming feel and is a perfect setting for families. Bushwalking trails and canoeing activities are within close range at Wills Park and Sugarloaf Bay.
• Quick access to CBD via Eastern Valley Way and Warringah Freeway.
• This house is solidly built below Deepwater road level and its south facing terrace and balconies fronts a reserve inhabited by friendly cockatoos.
• The architecture is designed to capture to natural bushland whereby the master bedroom, living and terraces have direct access to retreat areas.
• Rumpus / living room and forth bedroom at lower level has added privacy and access to retreat area at the back of the house.
• Family and kitchen walks out to huge entertaining deck overlooking retreat and bushland.

Drawbacks

• This location may be prone to termites and rising dampness due to its proximity to natural bushlands although this issue can be easily contained with careful maintenance.
• If only the backyard / retreat had a north instead of a south aspect.

This property was last exchanged for $1.45 million in late 2006.

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Popularity: 24% [?]

East aspect from TRIO apartment loggia with views to the city

TRIO apartments are developed by Frasers Property Australia.

TRIO apartments are located on the intersection of Booth street and Pyrmont bridge road in Camperdown. It is 200m from the junction of busy Parramatta road and the apartments are built on the east side of Booth street.

What I like about this location:

· The 200m distance from Parramatta road is sufficient to eliminate traffic noise altogether whilst it has easy access to the CBD and Sydney University is within walking distance.

· Glebe’s bohemian and eclectic lifestyle, Glebe Point road’s cafe and restaurant strip is 1km away. It is also close to King street’s retail, cafe and restaurants, Leichhardt’s Italian restaurant strip on Norton street. Other local amenities and attractions include Rozelle Hospital on the northern side of the Western distributor, Royal Prince Alfred Hospital, Darling Harbour, Sydney Fish Markets, Broadway shopping centre, Haymarket and Chinatown is within minutes drive. Overall, it is quintessential Sydney inner west living.

TRIO apartments ~ loggia living

· Ease of public transport to CBD via buses on Parramatta road.

Drawbacks

· Some of Camperdown’s industrial and warehousing facilities are located directly opposite the development on the south and west side of Booth street ie Storage King’s warehousing facilities.

· Apartments with the western aspect may experience traffic noise from Booth street.

What I like about the apartments:

· Layout – generally fair size and layout with loggia living as a distinctive feature. The loggias have wooden floorboards to give a warmer feel to the outdoors and have been constructed as natural extensions of the internal living areas. Some 1 bedroom apartments contain a study nook and have dual access to bathroom and toilet. Living areas have reasonable size – between 57sqm – 65sqm and between 85sqm – 94sqm for 1 bedroom and 2 bedroom apartments respectively. 2 bedroom apartments all come with 2 bathrooms with master bedroom ensuite.

· Bathroom – stylish design with good use of wall mirrors to enhance the feeling of space. Finishings include mosaic wall tiles, wall-mounted vanity basin and toilet suite with concealed cistern. Glass shower screens are semi-frameless and shaving cabinets have mirrored doors and glass shelving.

· Kitchen – galley style for 1 bedroom apartments with Smeg appliances. Some apartments come with colourback glass and stone upstand to kitchen island bench. Low-voltage halogen down-lights on underside of wall cabinets.

Drawbacks

· Separation walls of loggias have small slits, hence privacy and noise from neighbouring loggia may be an issue.

Apartment facing the east aspect which overlooks the lap pool and internal grounds are notably more exclusive due to its views towards the city skyline and more quiet surroundings. Apartments facing the west aspect will overlook some warehouse facilities and may experience noise from Booth street.

Prices:

· 1 bedroom with parking from $435 – $460k

· 2 bedroom with 1 or 2 car spaces from $790k – $1.1 million

· 3 bedroom with 2 or 3 car spaces from $1.4 million

· 3 and 4 bedroom rooftop penthouses from $1.6 – $3.5 million

At these prices, I believe these apartments are better suited for owner-occupant over investment.

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Popularity: 40% [?]

This property is located in a quiet part of Bulleen, which is approximately 14km north east of Melbourne’s CBD. It is a peaceful and quiet residential suburb.

What I like about this property and suburb:

1. Strategically located just north of the Eastern Freeway via Bulleen road, this property is secluded and yet merely 20 minutes to the city by car. It is also a short drive from Doncaster’s retail and commercial centre via Manningham road.
2. The backyard has a favourable north east aspect.
3. Living areas are spacious with open concept kitchen and dining flowing onto the verandah.

Drawbacks:

1. This property is one of two properties sub-divided from a single piece of land holding.
2. Master bedroom does not have an ensuite and shares a common bathroom and single wash basin. The powder room does not have a wash basin for guests although this can be rectified by possibly extending and renovating this room.

The council and water rates for this property are $900 per annum and $130 per annum respectively.

Last words

Great residential location with easy access to the city, east and north west Melbourne. Great buy at around mid $500k’s.

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Vital statistics ~ Bulleen, Melbourne

Median house price $640,000

Average annual growth 13.1%

5-year growth 56%

Weekly median advertised rent $380

Gross yield 3.1%

Source: Your Investment Property, April 2009

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How it’s calculated:

Median price: Median price for the 12 months to December 2008

Average annual growth: Average percentage change over the past 10 years as a per annum figure

5-year growth: Median price percentage change over the past 5 years to December 2008

Weekly median advertised rent: Median price of rental listings for the 12 months to December 2008

Gross yield: Estimated rental return, based on advertised rent to median price

Popularity: 22% [?]

Artarmon is a suburb conveniently located just 9 km north of the CBD. Due to its close proximity to the Gore Hill freeway, one can be easily in the heart of Sydney within a 10 minute car ride.

Why I like Artarmon:

• Easy access to the Gore Hill freeway through Reserve road.
• The west side of Herbert street is a mature built-up area where the majority of Artarmon’s apartment blocks are located. The train station conveniently serves the majority of residents within this Hampden road precinct and is 6 stops from Wynyard station.
• Artarmon is within 5 minutes drive to the neighbouring Chatswood metropolis.
• The area on the east side of Herbert street is leafy and secluded with quaint and older houses.
• Village feel with its local restaurants and cafes on both sides of the Artarmon train station.

Drawback

• Most areas of Artarmon to the west side of Herbert street are fully built with apartments ranging between 20 – 35 years old.
• There are still light industrial caryards and warehouses on the west side of Artarmon.
• Two dominant television transmission towers dominant the skyline.

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Vital statistics

Source: RP Data & Your Investment Property, March 2010

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How it’s calculated:

Median price: Median price for the 12 months to November 2009

Average annual growth: Average percentage change over the past 10 years as a per annum figure

3 and 5-year growth: Median price percentage change over the past 3 and 5 years to November 2009

Weekly median advertised rent: Median price of rental listings for the 12 months to November 2009

Gross yield: Estimated rental return, based on advertised rent to median price

Popularity: 22% [?]

Macleod is located approximately 18km north-east of Melbourne CBD. A new housing area, Springthorpe was developed three years ago in the north-west side of this suburb by a consortium of builders. Houses were required to conform to a consistent architectural design which combined the dull grey look of granite with warm timber wood colours. The result was a stylish residential area which is distinctively different from the older south east areas of Macleod. More importantly, the grounds of this development are seamlessly incorporated into an area which includes La Trobe University, one of Melbourne’s premier learning institutions. Prices for a brand new house in this development were in the mid $600k as recent as 2 years ago. Today, a 3  – 4 bedroom house in this area could set you back  $800k’s and as much as $900k on the higher end.

Houses currently on the market in Springthorpe estate:

1. 3, Woodlawn Circuit ~ $817,000
2. 74, Ernest Jones Drive ~ asking between $880,000 – $895,000
3. 115, Ernest Jones Drive ~ $925,000

What I like about Macleod

• The Springthorpe development is quaint and it feels like Wisteria Lane minus the desperate housewives. There are ample outdoor grounds which are quiet and serene, a perfect place for young families and children.
• Access to the city is easy via Greensborough freeway or Waiora and Heidelberg roads which takes approximately 25 minutes.
• It is close to Burgundy street cafes and restaurants in Heidelberg and retail and commercial businesses in neighbouring Preston.
• Public amenities include several hospitals ~ Macleod Repatriation Hospital, Plenty Hospital and Austin Hospital & Repatriation Centre. Local schools include Macleod College, La Trobe Secondary College and Macleod Pre School.
• Bundoora, which is a neighbouring suburb further north has various new developments, notably University Hill which is an integrated residential, retail and commercial project. This will augur well for investors in Macleod.

Drawbacks

• Public transport is poor if you live in the Springthorpe development. However, the heart of Macleod is serviced by the Macleod trains whilst buses and trams are available on Plenty road on the western side of La Trobe University.

Investors should take note the average house price in Macleod is $442,000 as at July 2009. Therefore, prices in the Springthorpe estate is significantly higher than the rest of the suburb.

Vital statistics

Median house price $371,000

Average annual growth 10.4%

5-year growth 41.6%

Weekly median advertised rent $300

Gross yield 4.2%

Source: Your Investment Property, July 2009

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How it’s calculated:

Median price: Median price for the 12 months to March 2009

Average annual growth: Average percentage change over the past 10 years as a per annum figure

5-year growth: Median price percentage change over the past 5 years to March 2009

Weekly median advertised rent: Median price of rental listings for the 12 months to March 2009

Gross yield: Estimated rental return, based on advertised rent to median price

Popularity: 25% [?]

Comparative analysis of 3 of Inner West’s water foreshore suburbs ~ Meadowbank, Rhodes and Breakfast Point

Why I like Meadowbank

· The Billbergia development at Bowden street and Bay Drive enjoys a more strategic location due over Ralan’s development on Belmore street to its close proximity to the Meadowbank train station and ferry terminal.

· Water views from these units enjoy a serene east and south-east aspect.

· Relatively quiet and secluded due to the south-end cul-de-sac of Bowden street and Bay Drive.

· Convenience of Aldi and Franklin supermarkets, post office, newsagent, delicatessen, cafe and restaurants in the Bilbergia development.

· Adjoining reserve / park which is great for walking, cycling and recreation.

Drawback

· Old warehouses and industrial facilities still occupy the north end of the Bilbergia development although it is understood that future relocation plans have been earmarked.

· The railway bridge on the west and south side of Bilbergia’s development may be unsightly to some.

Note: The Ralan development on Belmore street is less favourable due to its location being further away from the Meadowbank train station and ferry terminal. This general aspect of this development is south and there may be issues with natural light in certain apartments within this development.

Why I like Rhodes

· The earlier phases of Mirvac and Meriton’s developments along Rider Boulevard, Mary and Marquet streets enjoy closer vicinity to the Rhodes shopping centre and Rhodes train station. Ikea, Coles, Harris Farm, ANZ, Westpac, Bing Lee, Flight Centre, Optus and Telstra are major anchor tenants of this Mirvac owned shopping centre.

· I believe it is a suburb conducive to both investor and owner-occupier due to the convenience of the Rhodes shopping centre and strong rental demand.

· From an investment point of view, the Rhodes business park augurs well for the future development of this suburb. Major businesses located in the business park include National Australia Bank, Australand, Hewlett Packard, Alcatel-Lucent, Lion Nation, Unysis and Nestle.

· Walking and cycling track along the water foreshore towards Homebush Bay and Bicentennial Park.

· Close proximity to facilities around Sydney Olympic centre and Homebush Bay

· Well-lit, new and relatively large Rhodes train station with excellent disabled / wheel-chair facilities.

Drawback

· On-going cleaning-up of industrial waste on its water foreshores.

· Walker street being a major access road to Rhodes is unkempt and very poorly maintained by Council.

Why I like Breakfast Point

· Water views of this suburb enjoy the favoured north and east views of the Parramatta river.

· Apartment dwellings in this suburb are generally bright with generous amounts of natural light

· Generally more secluded and quiet surrounds and great for owner-occupier.

Drawback

· Only form of public transport is buses although neighbouring Cabarita has private ferry service.

· Depending on occupant preference, Breakfast Point has a relatively longer access from Yaralla street off Concord road which takes an additional 10 minutes by car compared to easier access to Meadowbank and Rhodes from Concord road.

Source: Australian Bureau of Statistics and research by Australian Property Monitors

Specific analysis on the following projects available: 1. Mirvac, Rhodes: Aldina, Tandara; Meriton, Rhodes: Sienna By the Bay, Peninsula: Bilbergia, Rhodes: VQ Village Quay; Bilbergia, Meadowbank: Angas; Breakfast Point, Breakfast Point.

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Popularity: 35% [?]

Comparative analysis of 2 new developments in Erskineville ~ Motto vs Verve

*Based on Asking price of typical unit divided by total internal and external living areas only (does not include car park and storage space).

Verve is closer to the train station although the north aspect of Verve is fronting Coulson street. Traffic noise can be an issue along Coulson street. Units fronting the north west corner of Coulson street will experience noise from the trains.

Motto is located on the corner of Eve street and Nassau Lane. Although slightly further from the train station, there is less traffic noise around its vicinity. The inclusions and finishings for Motto is of higher quality than Verve. Motto offers an outdoor pool and gym whilst there are no facilities for the Verve development. Investors should confirm approximately strata levies for both development.

Popularity: 36% [?]

Bondi beach is located 9km to the east of Sydney’s CBD. It is one of Sydney, and for that matter, Australia’s most popular tourist attractions.

Investors should take note there are 3 distinct suburbs ~ Bondi, Bondi Beach and Bondi Junction. This profile is about Bondi Beach.

What I like about Bondi beach

• If you have ample time, do the Bondi to Bronte walk and take in the views of the ocean as you reflect on what a beautiful city that is Sydney. Then take a dip in the Rockpool to cool off. Head over to Icebergs or the cheaper option of the RSL next door for some fresh Sydney rock oysters and wash it down with a crisp glass of sauvignon blanc while soaking up the breath-taking views of the surf and beach life. Truly, life can’t get any better than this!
• There is no shortage of cafes, restaurants, bars, shops and local attractions.

Drawbacks

• This place can be very busy with a lot of tourists during weekends.

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Source: Your Investment Property, April 2009

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How it’s calculated:

Median price: Median price for the 12 months to March 2009

Average annual growth: Average percentage change over the past 10 years as a per annum figure

5-year growth: Median price percentage change over the past 5 years to March 2009

Weekly median advertised rent: Median price of rental listings for the 12 months to March 2009

Popularity: 18% [?]

Indian ocean northern coastline, Perth Australia

City Beach is located 10km directly west of Perth’s CBD. Assessibility to this ocean front suburb from the city is via the direct route of Cambridge street and Oceanic Drive. The feeling of being on vacation takes over the moment you hit West Coast Highway. Meander along Challenger Parade and you will find casual joggers, dog-walkers, cyclists and holiday makers taking in the sun, wind and surf of the Indian Ocean.

Why I like City Beach

• You feel like being in a permanent vacation time capsule. The simmering Indian Ocean envelopes the horizon in front of you. Look left from the beach and you will see as far as 20km south towards Fremantle and beyond. Look right and the coastline extends 20km north to Hillarys. For the serious runners and cyclists, a round trip either way will test your endurance to the max.
• Beautiful sunsets over the Indian ocean.
• This ocean front suburb is relatively more secluded and enjoys similar amenities without the fuss and commotion compared to it’s neighbouring Cottesloe (pictured below) to the south and Scarborough  to the north where cafes and restaurants abound with both locals and tourists.

Drawbacks

• Time passes slowly here. I mean, very very slowly. Then again, is that a problem when you’re on vacation? Bondi, eat your heart out!

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Vital statistics

Median house price $1,800,000

Average annual growth 15%

5-year growth 113%

Weekly median advertised rent $800

Gross yield 2.3%

Source: Your Investment Property, July 2009

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How it’s calculated:

Median price: Median price for the 12 months to March 2009

Average annual growth: Average percentage change over the past 10 years as a per annum figure

5-year growth: Median price percentage change over the past 5 years to March 2009

Weekly median advertised rent: Median price of rental listings for the 12 months to March 2009

Gross yield: Estimated rental return, based on advertised rent to median price

Popularity: 19% [?]

Macquarie Park is located approximately 16km from Sydney’s CBD. Much has been said about the renewed vigour surrounding this suburb due to recent addition of 3 new train stations and new commercial property projects. It is also home to many new organisations taking up residence in commercial complexes. However, I remain a little skeptical for the following a few key reasons.

Main drawbacks

1. There are no current or foreseeable new residential developments in this suburb. There are no houses and majority of accomodation in this area consists of apartments blocks which are dated and old. Most 2 bedroom apartments in this suburb come with a single bathroom.
2. Due to its close proximity to Macquarie University, investment units in this suburb consist mainly student accommodation with a small potential for the executive market due to new IT & T companies such as Optus relocating to this area.
3. The new Macquarie Park train station is situated on the corner of Lane Cove and Waterloo roads. This location albeit close to some commercial complexes is a fair walk for residents along the Fontenoy and Khartoum roads area and the majority of residents on the western side of Epping road.
4. The new Macquarie University train station will benefit apartment blocks along the south side of Herring road, Lachlan Avenue and Ivanhoe Place. However, these apartments are old and dated. Recently, there has been a spate of newly renovated apartments in this area where owners are trying to cash in with small upgrades to get out of this suburb.
5. The new North Ryde train station on Delhi road is also in the middle of a commercial hub with little residential housing.

A newly completed block of apartments and townhouses on Waterloo road located on the north west end of Macquarie University were quickly snapped up by investors because prices were ranging between the mid $500k to $600k for a 3 bedroom apartment. At this price range, I have reservations about build quality. However, I doubt there are many owner-occupiers and most of these will be rented to groups of students who will share in paying up to $600 per week for a 3 bedroom apartment with little concern for build quality.

The capital growth statistics for this suburb have been poor and in my opinion, it is mainly due to the old and dated housing mentioned above. Rental yield is fair at 5.23% for these old housing as they are mainly supported by students. I do not foresee any significant improvement in capital growth for these apartments in the near future.

Last Words

I believe houses with good north aspects in neighbouring suburbs of North Ryde and Marsfield located on the west side of Epping road would be a better bet. Failing which, I think this is a suburb more suited for work rather than to live.

Vital statistics ~ Macquarie Park

Median unit price $368,000

Average annual growth 7.02%

5-year growth 0.82%

Weekly median advertised rent $370

Gross yield 5.23%

Source: Your Investment Property, July 2009

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How it’s calculated:

Median price: Median price for the 12 months to March 2009

Average annual growth: Average percentage change over the past 10 years as a per annum figure

5-year growth: Median price percentage change over the past 5 years to March 2009

Weekly median advertised rent: Median price of rental listings for the 12 months to March 2009

Gross yield: Estimated rental return, based on advertised rent to median price

Popularity: 18% [?]

Comparative analysis

~ Ironbark, Pymble vs Avondale, Pymble

*Prices are compiled based on publicly available information from real estate and developers’ websites at time of analysis. Prices are subject to subsequent change.

**Based on Asking price of typical unit divided by total internal and external living areas only (does not include car park and storage space). Please note average price may differ significantly for different apartments within same development.

Firstly, it is important to note that Pacific highway which meanders all the way north to Newcastle from North Sydney is built on a ridge which slopes down towards the west. Both developments in Pymble are located on the west side of Pacific highway. Therefore, the favoured north and north-east aspects may experience traffic noise from the highway. Avondale’s development is sandwiched between Pacific highway on the north & east and the train line on the south & west.

The location of Meriton’s development being directly opposite Pymble train station takes the nod over Avondale. It is important to note Meriton’s development is a horse-shoe shape built around 2 private houses and is sloping down towards the west. In addition, all traffic from Clysdale Place can only turn left onto Pacific Highway.

Some of Meriton’s 2 bedroom units have 1.5 bathrooms, ie a second toilet with wash basin at prices which are slightly less than the 2 bedroom units with 2 bathrooms. I believe this is a good floorplan for buyers such as young couples who may not need or fully utilise a second bathroom but will have a powder room for guests whilst keeping the main bathroom for their sole private use.

A key attraction for Pymble is that certain areas are very green, leafy and quiet. Having an address in Pymble gives access to some of north shore’s top schools such as PLC, Barker’s College, Ravenswood and Knox Grammar to name a few.

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Popularity: 28% [?]

Despite all the written literature about strategies and tactics during an auction, I believe there are no hard and fast rules for winning. It comes down to a host of variables during auction day and some sheer common sense. I was successful at my first auction and more importantly, I bought the right property at the right time, in the right location and at the right price.

This was my experience:

• Research on the location and maximum price the property is worth. I believe this is the most important aspect. Once you have decided the location is strategic, you need to ensure you do not over-bid and consequently, over-capitalise on the investment.
• Research the market. I think it is important to understand and estimate the point at which the property market is at, that is, is it a weak, falling or strong market and what are the auction clearance rates? By doing so, you will be able to gauge the extent of whether it’s a buyer’s or seller’s market and adjust your strategy accordingly.
• Dress to impress? This is one of the strategies “experts” advocate. I was in a T-shirt and my favourite pair of board shorts and loafers and I beat 6 other parties, one of which was a couple who were dressed in very smart business attire. Different attire means different things to different people. To me, even a bankrupt can be dressed in an Armani suit and drive a nice sports car without a dollar and chock full of credit cards maxed out in his wallet.
• Make yourself notice? This is another tactic that “so-called” experts agree you need to do during an auction. I was standing as far back as possible in a large hotel ballroom where there were at least 200 people, half of which were seated in classroom style facing the auctioneer. I could see the proceedings in the entire room whilst fellow bidders were constantly turning back to try and ascertain who I was.
• Don’t bid too early. This is a strategy I believe in. Why bid when the property is not even on the market yet? I started bidding towards the end of the auction and made 8 bids. One can also keep asking the auctioneer if the reserve price has been met. My winning bid was $1,500 higher than my closest competitor.
• Intimidating your competitors with icy stares and gestures? I kept looking ahead and did not bother with what my competitors were doing. I was prepared to walk away with nothing but this calls for a very strict discipline of not going over my budget and what I have done in my research.

Thus far, I have been successful in purchasing investment properties at all auctions for which I have made bids. I have ensured  I have not over-bid on the final price through extensive research and the marginal price difference for which I have managed to be successful.

Popularity: 19% [?]

The following is a general 3-step approach to buying the right property although these steps may be a little different depending on the objectives of an investor and an owner-occupier:

1. Right cycle. The property market moves in cycles and different states have different cycles. One needs to identify the market is close to bottoming out in a particular state / region to get into the market.

2. Right suburb. Identify suburbs with a good track record for capital growth. Suburbs with good amenties such as public transport, schools, business parks and local attractions / lifestyle options but have yet to see any significant rise in prices compared to its neighbouring areas. Suburbs with good upside potential will prove to be good long term investments when gentrification happens. Always choose a strategic location within the suburb such as proximity to ferry wharf, train station, local shops or easy access to main arterial road. These areas within the suburb will always fair bettter than others which are further away from these conveniences.

3. Right property and price. The old adage “worst property in the best street” may only hold true depending on your investment objectives. You may require a bigger budget to renovate and attract tenants if you are an investor.  Once you have found the right property in the right location, the last criteria would be to ensure you pay the right price. Research on the price of similar properties transacted in the past, check out the median price for apartments or house in the suburb (and know the limitations and flaws about median prices). Talking to neighbours or the person mowing the lawn in your chosen suburb is always a good way to find out more useful information.

Popularity: 24% [?]

3 bedroom house by the Maribyrnong river valley in Mebourne

With rising interest rates, it is obvious that positive cash flow properties will become more scarce. Buying into a positively geared properties has the key advantage, apart from having a positive cash flow, is its ability to shield the investor from the ups and downs of the property market. When the economy or the property market is soft, a cash flow positive investment property does not add additional burden to the investor because it is more than paying for itself.

A combination of the following factors can achieve a positively geared outcome for the investor:

• Low interest rates. It is obviously easier to find positively geared properties in a situation where interest rates are low. However, it doesn’t necessarily mean that these type of properties will disappear altogether.  The astute investor will need to make certain assumptions about where interest rates are trending in order to make informed decisions on whether to fix their interest rate on a mortgage in order to minimise the upward exposure on mortgage costs. Read accurately, a good interest rate strategy can turn properties with negative cash flow to positive cash flow even in rising interest rate regimes because the astute investor has fixed his/her mortgage cost base.

• Potential growth suburbs within capital cities. Every major city has suburbs which have gone through a process of transformation and gentrification. Picking these suburbs involve looking at neighbouring areas which have experienced good capital appreciation whilst property prices in the surrounding (growth) areas have yet to move with the market. As long as these surrounding areas have good public amenities with good access and are located strategically close to the CBD, they are more likely to experience similar growth in the future like their neighbouring areas did in the past.

• No land tax. A modest property which is within the threshold for land tax could potentially save the investor thousands of dollars each year.

• No strata levies. Some investors are more partial to buying landed property over apartment units for this reason. Imagine the amount of savings that can be made over the course of holding an investment property which is free from strata levies.

Among some selected areas identified by experts to  experience good capital growth over the next five years and hence increase the chances of properties being positively geared and give investors an opportunity to refinance are:

• Chippendale and Darlington in Sydney, New South Wales
• Maidstone and Braybrook in Melbourne, Victoria
• Thebarton in Adelaide, South Australia
• Clontarf in Brisbane, Queensland
• Victoria Park in Perth, Western Australia
• Glebe in Hobart, Tasmania

Popularity: 28% [?]

Mirvac’s proposed new apartments on Mary street in Rhodes will eventually block out the existing water views of the west facing apartments in its older Adina block. The Adina block comprise of 95 units of mainly 2 and 3 bedroom apartments and was completed in 2008.

The proposed new development is located directly between the front of the Adina building and the water foreshore of Homebush Bay. Potential investors and purchasers of the Adina apartments facing west to with the water views of Homebush Bay should remember to factor this issue into their buying process and asking price.

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Popularity: 27% [?]

If you are buying into an older block of apartments, you are entitled to review the minutes of the Body Corporate meetings and AGMs upon obtaining the authority of the vendor. By doing so, you are looking to satisfy yourself there are no hidden problems or issue which you may otherwise be unaware. Among the things to look for in the minutes include:

• Frequency of meetings and issues discussed. Depending on the Executive committee, which are appointed by the owners’ corporation to manage the running of the building, meetings should be held as least 2 – 4 times a year, apart from the AGM. Typical issues discussed should include the state of repair of the building, the administration costs, sinking fund and its adequacy, complaints and problems which may arise and how these problems are being resolved.
• For newer buildings, one should look to ascertain how defects are being resolved. The developer is required to fix and repair defects on the building which arise within the first 7 years.
• The sinking fund is an important element of maintenance of the building to ensure any works required in the future are adequately provided for.

Other handy tips may include talking to occupants of the building to find out if there are any issue or problems associated with the building such as nagging and recurring repairs and the effectiveness of the Body Corporate in resolving these issues. Be aware of whether you are speaking to an owner or a tenant as both will have different perspectives in their views.

Popularity: 20% [?]

Trio Apartments which is developed by Fraser Property Australia has won the NSW Urban Development Institute of Australia’s 2009 award for marketing.

The luxury apartments were designed by Fender Katsalidis architects and comprise 397 units at the corner of Booth street and Pyrmont Bridge road in Camperdown.

The marketing campaign of Trio Apartments involved an elaborate website and magazine written by style journalists which showcase the eclectic lifestyle of living in and around Sydney’s inner west suburb or Camperdown.

Please look at a review of the Trio Apartments.

Popularity: 19% [?]

Significant drop in housing approvals and completion 2008 / 2009

According to the Australian Bureau of Statistics, Australia’s population grew by 2.1% to 21.8 million people in the 12 months to 31 March 2009. This growth rate is considered to be unprecedented since the last population boom in Australia in the 1960s.

The Rudd government has forecast recently that Australia’s population is expected to grow to approximately 35 million people, which is about 7 million higher than previously predicted due to fertility rates and current migration policy.

This growth will have significant implications on Australia’s property market. Currently, approximately 72% of Australians live around the major capital cities of Sydney, Melbourne, Brisbane, Adelaide, Perth, Darwin, Canberra and Hobart. Sydney and Melbourne alone account for approximately 37% of Australia’s total population. The concentration of the majority of population in these 8 capital cities is due to regional Australia being relatively undeveloped. This uneven population concentration around the major cities is further compounded by the slow down in housing approvals and completions due to a number of factors.

As a result of scarcity of land in and around these major cities in Australia, there will be an increasing upward pressure on housing and property prices as the population grows into the future. The consequent of this is the increasing gap of people in Australia who can afford to live in and around the CBD of the capital cities and those who are forced further away from these areas. It will ultimately depend on the government’s initiatives and policy on how best to accommodate this ballooning growth, that is whether to develop better transport, communication and utility infrastructure both in major cities and regional Australia. On balance, property experts are still advocating investors to consider strategic locations in and around the major cities and in major growth areas approximately 25 – 40km radius of their centres. Due to continued high demand, these areas will continue to convince those already entrenched to stay and entice those who have the means to get in.

Popularity: 18% [?]