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Fin Review article

Discussion in 'Real Estate' started by Jacque, 23rd Jan, 2006.

  1. Jacque

    Jacque Team InvestEd

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    Interesting article in yesterday's FR by George Liondis, on the state of the Aust property market. He pinpoints six pockets of potential around the country:

    1. NT- Katherine
    9% return for houses 7.5% for units
    House prices risen more than 12% in past yr

    2. QLD- Southern suburbs, Brisbane
    Low vacancy rates in some areas of 1.5%
    5.8% return for houses 6.4% for units

    3. WA- Pilbara region
    Boom in resource sector affecting market
    Acute rental shortage
    Returns of 10%+ not uncommon

    4. VIC- Melb inner city
    Low vacancy rates
    Flat market
    Investors buying- prices at more realistic levels

    5. NSW- Northern beaches
    5.8% return for units
    Cracks of opportunity appearing

    6. SA- northern suburbs, Adelaide
    Elizabeth: 3 bd maisonette for around $100K
    7% return for houses in this suburb

    WA is leading the states as far as booms go, with far western mining towns offering the biggest cg rates over the past yr. Examples given include Quindalup, Coolbinia, Ascot and Newman.
    There's a general warning about rushing in to buy, however, as prices could fall just as quickly as they've risen, if the thriving resource boom suddenly turns to dust.
     
  2. Tropo

    Tropo Well-Known Member

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    Jacque,

    Would be nice to know how George L. pinpointed six pockets (why not 7,5 or 11) around the country ???. :confused:
     
  3. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I'd guess he just chose one area in each state ?
     
  4. Tropo

    Tropo Well-Known Member

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    Hmmmm...To chose one area in each state is very tricky me think.
    Oh well ... Another opinion & another $1 in the bank. :rolleyes:
     
  5. Jacque

    Jacque Team InvestEd

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    Perhaps he had the stats for ACT and TAS but couldn't fit them into the article :) You know what these newspaper editors can be like...
    I take all these media articles with a grain of salt. It's all too easy with statistics to interpret them in different ways, and new dvpts etc can easily skew the figures as well. But, for the sake of a good story :)
    I would never jump in and invest on the basis of an article such as this. It might, however, cause me to begin my own investigations and instigate some DD. There's always something to learn, in my opinion.
     
  6. Tropo

    Tropo Well-Known Member

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    I think you are right. Using statistic you can proof anything. :cool:
     
  7. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Jacque,

    Nice... My home turf and where I've decided to focus my efforts as I know the strip well. I spent two hours with a high quality local real estate agent that Kay and I liked the look of from an open house. She came to our place at 6pm and didn't leave until 8pm. That's pretty good dedication on her part and she knew her stuff too.

    House prices in our strip that were pushing the $700K mark and upwards can now be had for sub $600K. We're looking for an "opportunity" property for around the $550K mark or less that we can do a cosmetic+ makeover on to then revalue at hopefully the $650K mark. Release the equity through an LOC and repeat. Not a bad strategy for a flat market. Hoping to have two of these under our belt plus our PPOR prior to the next boom 2008/2009. That would mean we'd have $650K+$650K+$800K=$2.1M worth of property ready to potentially double in the next decade or so. Even if it rises by only 50% through the next boom we'll still have made a nice clean $1M. :D

    But you already knew the Northern Beaches had some serious hidden value right! ;)

    BTW, they're running a version of that article in today's SMH here

    Cheers,
    Michael.
     
  8. Glebe

    Glebe Well-Known Member

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    Sounds like a good plan to me Michael. The leading indicators though (great thread by the way), don't they suggest you'd be better off doing it 12 months down the track rather than holding now?
     
  9. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Glebe,

    Yep you're probably right, but my postcode has come off nicely and properties are sitting on the market for quite a while now. We'll be looking from now on, but might not find something that fits our criteria for 6-12 months. There's no rush, but opportunities are starting to appear.

    Oh yeah, and my postcode is starting to show some recovery according to the attached info from Aussie Valuers. This is easily distorted by the mix of properties sold in the postcode so is only a rough guide, but it hints at potential upside...

    Thanks mate,
    Michael.
     

    Attached Files:

  10. Jacque

    Jacque Team InvestEd

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    I like your plan, Michael, and let's hope you're right on track with the 08-09 boom :)
    As long as you can afford to hold such negatively geared property of this calibre, then I feel now is a terrific time to be looking for bargains...
    Hills district out my way is similar, with lots of price reductions happening and more properties selling in $400's now, still on decent blocks of land (750sqm+) If you can buy, reno and hold on for the long term (especially in the established areas which already have the infrastructure such as Baulkham Hills, Castle Hill, Cherrybrook, WPHills etc then it can only be all the way up in 4-5 yrs. Looking forward to it!!