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Early indicators suggest the market will start off strongly. While there are many different opinions being offered on the direction of the market in the media, these are generally from people who are not on the ground. To date there have been large numbers of people attending open for inspections. These would include people that missed out in 2015, people that pulled out of the market because it was hot and too defiant to buy, and new entrants in 2016. They will be eager to buy which will certainly put pressure on prices, particularly given the year has started with unusually low stock levels (particularly for good quality property). Another indicator for the likely direction of the market is the level of Chinese interest. They seem to have deserted the Sydney market in favour of Melbourne. This is confirmed by the number of Chinese visiting the Juwai site (equivalent of realestate.com.au) looking for Melbourne real estate which has increased by 700% over the last 12 months. The next indicator is interest rates. With talk now that the interest rates could be going down again, this is only likely to stimulate an already hot market. For the record, while most of the media predicted a subdued market in 2015, we were very bullish given similar market indicators. With one of the strongest years in history we were proven right and I am happy to go back to this article in 12 months’ time. Then there is all the talk about changes to negative gearing. As any changes are unlikely to be retrospective this is also encouraging people to buy now while you can still obtain all the gearing benefits. So we expect the market to be strong in 2016! In this month’s newsletter we provide some advice on what to do as an investor during this time and who you should listen to in this market. Have a great year! Leigh McConnon |
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What to do as an investorIt can be very hard in this market to secure a good quality property when the market is running so hot. Put simply the demand for these properties is significantly higher than the supply. So the imbalance is pushing prices up. So what do you do? As Buyers Advocates we are always looking at the best opportunities for our clients. This considers up and coming areas as well as what is happening with certain property types. In every market cycle there are still a lot of opportunities for the astute investor. You just need to look harder and do your research! It is still possible to buy in blue chip suburbs if you have the budget and are prepared to be patient. This may involve missing out on several options before you secure one. However for those that do not have the budget or just want to consider an up and coming area, it is important to identify where those opportunities exist. For example in 2015 we identified that there were 3 areas that offered significant upside. These were Highett, Reservoir and Macleod. All 3 have provided excellent growth to our investors. But it is important to know where to buy in these areas and what particular type of property. Many people make bold predictions on up and coming areas but very few provide detailed information that can provide absolute confidence on what and where you should be buying. This is exactly what we do for our clients and for 2016 we are going through the same processes to identify where the next hotspots are. This takes time and involves looking at demographics, neighbouring suburbs, the stage of gentrification, the amount of development happening in the area, zoning, price points for land vs apartments etc.… If you would like to discuss these opportunities with us, please give us a call. |
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Property ManagementAs a reminder Buyers Advocate Property Management now offer a premium service to our landlords that are looking at maximising their rental and lowering their vacancy period. We have negotiated with TopSnap to have professional photos completed for their listing on the key rental websites. This can really help to stand out from the crowd. Good photography can be the key to attracting potential renters to your listing. If you would like more information on our property management services please contact Caroline Lichtenberg, by phone or |
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As we embark on a New Year, you will see a lot of investment seminars being offered. This can be very confusing and daunting, particularly for first time investors. Booking into one of these can often give a sense of relief as you have taken the first step in your wealth creation journey, but book into the wrong one and it could be the worst decision you ever make. There are a number of things you should look out for when considering what you should attend:
- Is the seminar free? Nothing is ever free in this world and is often an indicator that further education sessions are required at a cost or there is a product to sell. Alternatively, if all of this looks too hard, see a Buyer’s Advocate and get a good property in your portfolio. A good Buyer’s Advocate will only have your individual interest at heart and have no associations with any agents, developers or anyone else looking to sell a product. Being completely independent, we are able to recommend only the top 5% of properties that make the investment grade. This is true action towards achieving your goals rather than the time and money spent working out what gurus are worth listening to! An example of how things can go wrong: In 2012, an article in Property Investor Magazine featured the story of a young couple that attended an investment seminar. Following the “expert” advice supplied to them, they went on to build a portfolio of 20 properties with a net worth of $2.5 million. At the time this was celebrated as a major achievement. However what the seminar and subsequent action failed to address was the inherent risks associated with the type of property they were buying. Today, they are bankrupt with a debt of $3.5 million. The majority of their properties were located in mining towns, and as a result of the recent mining downturn, the properties lost 70% of their value. This is a true example of how things can go wrong when the wrong advice is received. |
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