Property Investment is still high on the Agenda August 2004 RETURN
This year we have become increasingly forward in our recommendation to buy selected city fringe property. We are seeing terrific buying opportunities on a decreasing scale and suggest they will be short lived once the market enters a post election recovery phase. Current values are now probably under par and will head upwards as the market reconfirms it is still fundamentally sound.
Why are we so adamant that the time is right to buy? Lets look at a few indicators in the marketplace that we are recommending. Interest rates are only 0.5% off a 30 year low with no sharp rises foreseeable. It has incorrectly been suggested for the past 12 months rates will increase by 0.25%-0.5%. In the unlikely event this did happen we will still be only 1% off the lowest rates in decades, yet with very strong economic conditions supporting the market. Professional Employment, Business Confidence & Consumer Confidence are all at very healthy levels. The predictions of property values sliding are ill informed, we do not see any great capacity to reduce in value. Some sectors of the market place were overvalued and have already corrected.
The real issue is that price crashes have historically been accompanied by high unemployment, rising interest rates, severe economic downturn & a massive slump in demand. Current conditions do not reflect this & underlying demand in city and beach edge districts remains strong. The Australian Bureau of Statistics figures show Property Investors are still active with $5.7 Billion dollars borrowed nationally in May alone. The average loan was $204,000. Population growth in Melbourne is expanding at a rate of 35,000 people per annum, adding the size of Canberra every decade 1984: 2.9m; 2004: 3.61m; Expectations are for 2015 4.3m & 2024: 4.7m. 1st Home buyers jumped by 8% to 1768 or 16.2% of total sales in the month of May, buoyed by the introduction of the State Government 1st Home buyers grant of $5000.
Affordability rose with average loans dropping $700 to $198,000. Leading BIS Shrapnel economist Frank Gelber predicts a buoyant market ahead for the next 3 years in commercial property, with values up by 60%, demand for office space to increase, new suburban development to be popular for affordability and a strong retail sector until 2006. Transport infrastructure projects will increase warehousing demand. The market will be underpinned by strong economics, population & employment growth, consumer spending & confidence, steady construction activity and affordable interest rates. They see no signs of an interest rate led implosion. Other points of interest that have gone largely unreported are: -In June Mirvac sold $70m in one night in the final stage of Beacon Cove, top price $4.5m. -The Median house price for the weekend 31st July rose to $400,000, $43,000 up on the June quarter. -Nearly 300 homes have been sold in excess of $1m this year and 92 over $2m.This is almost double of the same period last year. -Internet usage in the property market is on the rise. Prominent realestate.com.au experienced its biggest day ever on 12th July, with 118,381 visitors. Our own website marstoncook.com.au experienced over 80,000 hits in June.
-PRD Nationwide sees North & West Melbourne as a shining light in inner-city property with rising values, low sales volume and little chance of a stock glut. Up to 40% of all investments researched have been by local residents. -The Docklands continues to defy all the misreporting of a skeptical media, $3.9m has been paid for the Penthouse Apartment at The Point, Victoria Harbour. 60% of the Tower has sold at an average price of $900,000 & 70% of the purchasers occupiers. -Victoria is poised to top for the first time $15billion dollars in building approvals in the past financial year. All in all there is strong reasoning to be bullish about property. The general public may be hesitant at present yet they rarely read the market well, nor quickly enough!. As the market becomes increasingly aware of the real strength, the great buying conditions will quickly dry up and values will increase immediately. The market critics will again be left to ponder another opportunity lost.
This year we have become increasingly forward in our recommendation to buy selected city fringe property. We are seeing terrific buying opportunities on a decreasing scale and suggest they will be short lived once the market enters a post election recovery phase. Current values are now probably under par and will head upwards as the market reconfirms it is still fundamentally sound.
Why are we so adamant that the time is right to buy? Lets look at a few indicators in the marketplace that we are recommending. Interest rates are only 0.5% off a 30 year low with no sharp rises foreseeable. It has incorrectly been suggested for the past 12 months rates will increase by 0.25%-0.5%. In the unlikely event this did happen we will still be only 1% off the lowest rates in decades, yet with very strong economic conditions supporting the market. Professional Employment, Business Confidence & Consumer Confidence are all at very healthy levels. The predictions of property values sliding are ill informed, we do not see any great capacity to reduce in value. Some sectors of the market place were overvalued and have already corrected.
The real issue is that price crashes have historically been accompanied by high unemployment, rising interest rates, severe economic downturn & a massive slump in demand. Current conditions do not reflect this & underlying demand in city and beach edge districts remains strong. The Australian Bureau of Statistics figures show Property Investors are still active with $5.7 Billion dollars borrowed nationally in May alone. The average loan was $204,000. Population growth in Melbourne is expanding at a rate of 35,000 people per annum, adding the size of Canberra every decade 1984: 2.9m; 2004: 3.61m; Expectations are for 2015 4.3m & 2024: 4.7m. 1st Home buyers jumped by 8% to 1768 or 16.2% of total sales in the month of May, buoyed by the introduction of the State Government 1st Home buyers grant of $5000.
Affordability rose with average loans dropping $700 to $198,000. Leading BIS Shrapnel economist Frank Gelber predicts a buoyant market ahead for the next 3 years in commercial property, with values up by 60%, demand for office space to increase, new suburban development to be popular for affordability and a strong retail sector until 2006. Transport infrastructure projects will increase warehousing demand. The market will be underpinned by strong economics, population & employment growth, consumer spending & confidence, steady construction activity and affordable interest rates. They see no signs of an interest rate led implosion. Other points of interest that have gone largely unreported are: -In June Mirvac sold $70m in one night in the final stage of Beacon Cove, top price $4.5m. -The Median house price for the weekend 31st July rose to $400,000, $43,000 up on the June quarter. -Nearly 300 homes have been sold in excess of $1m this year and 92 over $2m.This is almost double of the same period last year. -Internet usage in the property market is on the rise. Prominent realestate.com.au experienced its biggest day ever on 12th July, with 118,381 visitors. Our own website marstoncook.com.au experienced over 80,000 hits in June.
-PRD Nationwide sees North & West Melbourne as a shining light in inner-city property with rising values, low sales volume and little chance of a stock glut. Up to 40% of all investments researched have been by local residents. -The Docklands continues to defy all the misreporting of a skeptical media, $3.9m has been paid for the Penthouse Apartment at The Point, Victoria Harbour. 60% of the Tower has sold at an average price of $900,000 & 70% of the purchasers occupiers. -Victoria is poised to top for the first time $15billion dollars in building approvals in the past financial year. All in all there is strong reasoning to be bullish about property. The general public may be hesitant at present yet they rarely read the market well, nor quickly enough!. As the market becomes increasingly aware of the real strength, the great buying conditions will quickly dry up and values will increase immediately. The market critics will again be left to ponder another opportunity lost.