You’d have to be living under a rock not to know the Reserve Bank of Australia (RBA) cut the official cash rate by 0.5 per cent last week. Most economists think there is likely to be another one or two cuts later in the year. So what does this mean for property values and investors?
BY MICHAEL YARDNEY
Earlier this year, the RBA left interest rates on hold because they were expecting the mining boom to stimulate our economy. They were worried this may lead to inflation and thought they’d have to balance this stimulus out with higher rates.
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The Queensland Building Boost kicked off last August under the previous State Government with the usual fireworks and rockets, and a promise of help for the housing industry. Oh, that is way too tame – it was actually a political wedge designed to shut up the development industry. And it worked a treat.
BY MICHAEL MATUSIK
The grant was promoted as a panacea that would lift demand and help get more new development under way. Too many believed that would be the case, with some – even in the development industry – calling for the boost to be extended. And it was.
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Hindsight is a wonderful thing, but there are just some things in life you can’t anticipate. Like the critically acclaimed Police Academy – who would’ve thought its sequels would fail to redefine cinematic brilliance to the same extent? Property is similar, albeit with less slapstick, in its ability to produce some truly “who knew?” moments.
BY SHANNON MOLLOY
The well-rounded and charming fellow whose words you read today was shaped in Queensland towns like Yeppoon, Rockhampton and Mackay. They were typically regional – relatively small, a bit out of the way and easy to forget.
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At times of slower property price growth, or no price growth in some areas, property investors count on rising rents to boost their investment returns. The fact is, since the beginning of 2006 rental growth across the combined capital cities has outpaced the growth in home values.
BY MICHAEL YARDNEY
The following table from RP Data shows that over the last six years capital city home values have increased by 34.5 per cent, compared to rental rates that increased by 46.8 per cent.
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Out of sight, out of mind. When it comes to most life maintenance tasks, that’s definitely the case. There are those things you should do every 12 months or so – a visit to the dentist, an alcohol detox, cleaning out the junk drawer in the kitchen. If you’re like me, they rarely get done. A mortgage health assessment falls into the same basket.
BY SHANNON MOLLOY
Spring cleaning and a bit of poking and prodding in the dentist’s chair sit at very different spots on the scale of importance, but neither (if you’re lucky) will cost you tens of thousands of dollars a year. So, why would a mortgage check up be just as easy to forget?
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There are two questions I’m constantly asked at the moment, whether it be at seminars, on the radio or during private consultations. The first is about property investment in the northwest of Western Australia. The second relates to the state’s southwest. People are curious if it’s a good idea to invest in either of these regions, and where the best prospects might be.
BY GAVIN HEGNEY
The state’s northwest has many towns that are tied to a particular company. I always like multiple resource towns and never suggest a single company town, one where a single resource us mined by one company only.
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Over the last decade Melbourne’s growth outpaced all other Australian capital cites, adding 666,000 new residents or the equivalent of a third of Brisbane’s population. The Age reported the city added 67,000 people in the year to June 30, 2011 – almost 1300 a week – as new suburbs emerged, expanded and filled up, mostly to the north and west.
BY MICHAEL YARDNEY
Melbourne accounted for 80 per cent of Victoria’s growth in 2010-11. While regional cities and the coast grew solidly, population losses continued in inland western Victoria.
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I went to a dinner party last week and thanks to my new role with Australian Property Investor, I was bombarded with questions from almost everyone at the table. There was very little pessimism about the market and no strong feeling that it still had some way to go before hitting the bottom of the cycle. The overwhelming sense was that people wanted to invest now.
BY SHANNON MOLLOY
Against all conventional investment wisdom, I toyed with the idea of selling one of my properties last year. I knew it wasn’t the best time, but I was curious so I listed the apartment anyway to see what sort of response I’d get. It wasn’t great. The sole offer I received was well below expectations – daylight robbery, in my obviously unbiased opinion.
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A question I’m often asked is whether people should buy an owner-occupied property first or an investment property. What most don’t realise is that it might be possible to do both. A client could purchase a property that needs a cosmetic renovation, add value to it and then leverage into the world of investing.
BY JAMIE MOORE
Accessing this newly created equity means they could fund a deposit and costs on their first investment purchase. With this strategy, the client also gets to take advantage of government bonuses like the First Home Owners Grant (FHOG) and stamp duty concessions.
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By now you know we have a “boom and gloom” economy in Australia, with one leg being driven by mining. But what if this falters – what will it mean to our economy, the property markets, and you and me as property investors?
BY MICHAEL YARDNEY
The recent long-term forecast update by BIS Shrapnel should give us some reassurance, as it confirms the rapid expansion of minerals-related investment that’s providing a significant boost to the Australian economy.
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