Comments on: Block your ears!

By: Vanessa De Groot

Vanessa De Groot — Wed, 24 Aug 2011 22:49:58 +0000

While I’m familiar with these areas, I know where they’re located and I could tell you a little bit about them, unfortunately I’ve never invested in them, or studied them to the point that I would be able to confidently give advice as to whether you should buy in these locations, and what you should buy. It’s always best to talk to property professionals that work in the area, as they’ll know the ins and outs and will be able to give you the best advice. Certainly API has looked at some of these areas, but while that may put it in on the radar for some investors, property professionals in the area are best placed to give thorough advice about where and what to buy.
Attending open inspections in the area you’re thinking about investing in will give you a good feel for what’s around, who’s buying and what they’re paying and it gives you the opportunity to chat to real estate agents and get a feel for the market and its potential for growth.
You can talk to the relevant council in the area to find out whether there are any plans for the location that may drive up prices, real estate agents and property managers to find out how much demand is around and for what type of property, and consult property data such as vacancy rates, median prices (and growth), median rents and stock on market figures. You can also visit the ABS website, which has lots of demographic information about areas – that too, can help you work out which type of housing is in demand – for instance, if there are lots of families in an area then it’s likely houses will be in demand, while if there’s a lot of Gen Y’s and professionals, it’s likely units will be in demand.
There are many factors and variables affecting each property market in Australia, so it’s important to thoroughly research any area you’re thinking about buying in. It’s also important to research the state you’re buying in to determine whether it’s next in line for growth, as well as if you should buy in a capital city or regional area.
At the end of the day what to buy will be specific to each investor, because it needs to suit their budget and goals. Thorough research is the key to investing confidently – never rely on what someone else tells you, always do the leg work yourself to determine if it’s a good investment, looking at all the fundamentals that are necessary for growth, such as infrastructure, population growth and access to services and amenities.
Good luck with finding the right investment for you!

By: Lyn

Lyn — Wed, 24 Aug 2011 09:52:46 +0000

Hi Vanessa I adopt a Buy/ Renovate/ Hold strategy. Which do you think would have better capital growth, a Victorian terrace in Pyrmont or Darlington or Chippendale or East Redfern? My budget is $900k. Thank you.

By: Vanessa De Groot

Vanessa De Groot — Wed, 24 Aug 2011 07:44:43 +0000

Hi Siva,

Sorry, I’m not familiar with that area, but at the end of the day where and what you buy comes down to doing thorough due diligence for any property investor. Research the area to determine whether there’s demand from renters (and for what type of housing), whether there’s anything that’s going to push prices and rents up (such as population growth, infrastructure development etc) and whether it’s close to amenities and services. Perhaps call some real estate agents and property managers in the area to get their thoughts – that can certainly help. And contact council to find out if there are any plans for various projects or developments that could impact upon the area. I hope that helps! Good luck!

By: siva

siva — Tue, 23 Aug 2011 18:17:52 +0000

Hi vanessa

what about buying a pair of semis in davoren park?

Regards
Siva

By: Tony Cuevas

Tony Cuevas — Fri, 19 Aug 2011 04:19:09 +0000

The one thing that strikes me about the current disposition of property investors – they seem to be very ‘touchy’ right now. They seem to be very much on-edge and will staunchly and aggressively defend their investment.

Yes, there are many people out there who are suggesting houses price are crashing, but I am not one of them. If house prices merely track sideways for ~5 years, which is what I believe is the most likely scenario, then this is still a loss of nearly 20% in real terms (assuming 3.5% inflation). How long do suffering investors have to wait until their properties recoup all these years of losses, let along start making money?

It seems like there are so many property investors out there who are yet to actually make any money on their rental houses, but are nervously waiting in hope that prices will soon rise. Current property investors and property ‘authors’ alike are actively encouraging more people to pile into the housing market behind them in order to prop up their own investments.

With comments such as:

“With prices falling, now is the time to buy because yields are improving”….what, from 3% yield up to 4%?

“Prices will rise again, whether it be in 2 months or 2 years” ….or how about 10 months or 10 years? But that wouldn’t sound as encouraging.

“Go again the herd and buy a rental property now” ….or maybe it was the ‘herd’ who actually loaded up on rental properties in the hope of achiving ‘financial freedom’ or whatever else the seminar speaker promised back in 2006. But now that everyone has bought in, there’s no fresh buyers to support the market at these high prices, hence prices have come off. And as prices come down, there’s no rising equity for investors to accumulate more properties, which creates even less ability to purchase more property, and so on and so forth.

Sorry to sound negative, but I’m just telling it the way I see it.