Post this cycle (2008 to 2015), we believe the Australian residential market is likely to slow down, possibly significantly; & in certain locations; & for certain property types – values, sales & even rents could fall, possibly substantially.
We also think these sluggish conditions could last for several years.
The reasons why are many & include high debt levels; the lessening “impulse” of interest rates; low affordability; workforce & general economic restructuring; changing demographics; low inflation; potential changes to property taxation & fewer fiscal government incentives.
This combination will see a lower “housing pulse” in coming years, as shown in the chart below. Australia’s housing pulse, by our measure, is close to its current peak.
Our analysis also suggests that many Australians will need to compromise on their housing in the future.
Compact housing, especially in major urban areas, appears to be shaping up as better potential investments.
Similarly, in regional locations & outer suburbs, properties with dual (or more) incomes look more promising as a passive investment, rather than traditional housing.
With less potential price growth in coming years – or possibly over the next decade to come – investors should be focusing more on rental returns.
They should also be thinking about buying a product with strong owner-resident resale appeal. In our view, residential property will return to being more about cash-flow, rather than largely about capital growth.
The astute will buy strategically for a rental premium; & not just buy a generic property in anticipation of overall price growth.
To capitalise on this new housing future, we believe property investors would be best buying a property in a smaller project; one close to transport or work-related infrastructure; infill or dual-(or more)-income dwellings in the suburbs; with valuation or strong local resale support; quality environments & suitable for two or more rental & resale market segments.
Passive investors should consider buying a new or newly completed dwelling.
For those looking to do a lot of work when it comes to buying & in particular adding value to a residential investment, then they should:
• Buy lower-end homes at the right price & terms • Buy in areas where rents are rising faster than home values & where renting is more affordable than owning • Fix up homes with attractive & durable features & keep them very well maintained to retain quality tenants & preserve owner-resident resale appeal
Our reports, presentations & communiques all carry this mindset & our Property Pick process showcases those projects & properties that we believe better fit Australia’s new housing future.
Warning: Matusik Property Insights are not investment advisors. We are experienced residential commentators, with a long and solid track record of giving accurate property development advice. All readers should seek independent and qualified investment advice before purchasing a property.
but but but...... Michael MatSpruik told me to load up on debt? Buy heaps of IP's, it doubles every 7-10 years he said..
Link please ... ?
ThePauk
2 Sep 2014, 09:28 PM
CJ is having an effect....lol
And as to you Pork, once housing falls over, your dream wishes about taxing the fuck out of the old, the dying, and dead to create your Socialist Utopia will become unfunded ...
* Better rental returns - Stronger tenant interest Not necessarily, because you have to charge significantly more rent for a property with the same vital statistics. - Less Tenant turnover. Unsubstantiated bullshit. - Better Management Unsubstantiated bullshit. In fact, with an established property you can check the management track record. With a new property you cannot. - Compliance, less maint and repairs. True enough. - Sorage, Bathrooms, Design and number of dwellings. This goes for all relatively recent builds, not just new builds
* Major Tax advantages. yes
* Higher Owner Resident Resale Appeal - Fully Compliant - Energy, Internet, Water, etc. No reason why an older dwelling can't be fully compliant, except perhaps for energy, which nobody cares enough about to spend an extra dollar. - Less maintenance. - Building and Material Warranty - Limited need for major renovations/structural On balance I disagree. True, if the building is good, you get a 10-15 year holiday from major expenses. On the other hand, major problems like water ingress through membranes, cracking, etc take some time to show up and can cost you a lot of money and value regardless of building warranty. It is safer to buy a 15-year-old building, get a good building inspection done, and lower your bid to take into account faults that cannot be fixed.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
Link please ... ? And as to you Pork, once housing falls over, your dream wishes about taxing the fuck out of the old, the dying, and dead to create your Socialist Utopia will become unfunded ...
Herbs I know you like to think I am a pure socialist, however, you are wrong, I am not. It is all in your head mate.
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