On one hand, buying and investment property is a straightforward process however, with so many things to think about it can also become quite daunting. Making a mistake can cost $100,000’s over the long-term and one of the biggest and most import decisions is, “where to buy?”
Many of us feel we want the emotional luxury of buying close to home so that we can drive past and admire our bricks and mortar as well as show them to friends and family. However, as investments should be all figures and no heart – often it’s better to do your research and cast the net wider.
At Empire, while we help investors buy property all around Australia, much of our focus is Sydney where we stick to the blue chip suburbs such as: the beaches of the Eastern Suburbs; The Lower North Shore and the Inner West, all of which have historically proven to have solid growth.
Again in 2012, Sydney is predicted to keep rising and below are excerpts from the QBI LMI Australian Outlook report to 2014. While the figures are based on median house prices, in our opinion, the overall property markets will be affected accordingly:
“Overall, median house prices in Sydney are forecast to lift by a cumulative total of 19%, or 6% per annum, to $770,000 over the three years to June 2014. This reflects a total rise of 8.1% in real terms”.
“Melbourne’s median house price is forecast to be just 5.6% higher in Melbourne over the three years to 2013/14—or less than 2% per annum and the lowest amongst all capital cities. This will lift Melbourne’s median house value to a forecast $623,000 at June 2014, although in real terms, the median house price in Melbourne is forecast to decline by 4.2% over the three years to 2013/14”.
“By June 2014, Brisbane’s median house price is estimated to be $505,000, representing an overall increase of 16% between June 2011 and June 2014, or 5.1% per annum on average. This equates to a 5.3% increase in real terms over the three years to 2013/14”.
“Consequently, growth in the median house price in Adelaide from 2011 to 2014 is anticipated to be limited to a total of 7%, or a minimal 2.4% per annum on average, over the three years to 2013/14, lifting the median value to $440,000 at June 2014. In real terms, the median house price will actually decrease by 2.6% over the three years to 2013/14”.
“Subsequently, the median house price is forecast to escalate by 8% in 2012/13 and ease to 7% in 2013/14 as interest rates peak. Overall house prices in Perth are estimated to rise by a cumulative total of 20% over the forecast period—the highest amongst all capital cities—to $565,000 as at June 2014. This reflects price growth of around 6% per annum, which is similar to the expectation of household income growth over the three years to 2013/14, and equates to an 8.8% total rise in real terms”.
“Consequently, minimal price growth totalling just 7%, or 2.2% per annum, over the three years to 2013/14 is forecast in Hobart, lifting the median house value to $395,000 at June 2014. In real terms, house prices are projected to show a decline of 3.4% over the 2013/14 period”.
“Without any major pressures on prices, the annual rate of price growth is forecast to remain minimal within the 2.5% to 3% range over the three years to 2013/14, with the median house price increasing by 8% overall, although declining by 2.6% in real terms. By June 2014, the median house value is projected to reach $565,000”.
“As a result, total rises in prices will be moderate, with annual house price growth (+4%) forecast to reappear in 2011/12 and then strengthen further to 6% in 2012/13 and ease to 5% in 2013/14 as interest rates peak. Darwin’s median house price is forecast to reach $600,000 by June 2014, representing total growth of 17% (or 5.4% in real terms) over the three years to 2013/14. This equates to average growth of 5.2% per annum.”