Discussing with Property Observer the ways she selects assets that, at minimum, double in value every seven to 10 years, Wakelin Property Advisory's Monique Sasson Wakelin divulged a few of her property perspectives.
We've shared part of our exclusive interview in the video below.
Transcript:
It becomes very obvious over a large period of time which particular property styles, suburbs, precincts, characteristics stand the test of time and actually produce the best investment outcome. What's interesting is that a lot of people argue that the past growth won't necessarily dictate the future growth, how do you reconcile those ideas? I think the important message here is that really high quality assets tend to perform very consistently over time. That doesn't mean that property values never go down. They do. And we've recently experienced precisely that over the last three years, I think we saw about a national 10% decline in value and we've started to recoup some of that loss.
But the difference between the wider market place and the really good quality parts of the marketplace is not so much that the value never goes down, but it actually goes down far less than what more compromised parts of the marketplace will show in the later decline.
And importantly when market conditions stabilise and we see a resumption of growth, what I call the bounce back factor is hard and fast in the really good quality assets. So you'll see perhaps the wider market place recoup perhaps 3%, 4%, 5% growth but the really good quality properties might start recouping 6% or 7% right off the bat. So it's really very much about being on the ground, having the data at your disposal.
We've got files and files and files of properties and we've been able to track their trajectory over 20 years or more. And so, it's really important for investors to understand that property values and growth factors will fluctuate, but what we're trying to do in terms of really good quality asset selection is beat the performance of the wider marketplace.
Q. When you're talking about this quality asset, what does that look like to you?
When it comes to houses we like to choose investments that are anything from the 1880s probably to about the 1940s or 1950s. And the key note here is that the asset has to have what we call scarcity value. In other words, there has to be much more demand for that particular type of asset in that particular location than there ever will be supply to satisfy that demand. The same criterion applies to apartments. With apartments you want anything from 1930s through to about the 1970s. Those are the assets that really confer and satisfy that criterion of scarcity value.
I must say, and I'm well and truly on the record here, that off-the-plan investments don't work. They don't have that scarcity value, the vast majority of them. There are always two or three examples that break the rule to prove the rule, but they do tend to be geared towards owner occupiers, many of them are seven figures, rather than what I would consider to be the garden variety investment apartment at a more affordable level for most investors. I'm really talking about something between $500,000 and $700,000. Whereas these ones that may have started out as off the plan would have started out as $700,000 or $800,000 investments when they were sold but they'd now be worth well and truly in excess of $1,000,000 and sometimes even $2,000,000.
Q. What do you think about the more boutique-type off-the-plan, for example a block of six ?
I still don't like them. Not only because of the scarcity value but the location might have scarcity value if it's not a main road, but I tend to stay away from main roads when investing for clients - noise, pollution, all those things - but also from an architectural point of view.
There's something about classic architecture, of course, which can't be either replicated or replaced. Whereas even boutique off the plan apartments are somehow not architecturally scarce enough for them to still look good 20 years down the track. They tend to look architecturally obsolete and tired very quickly. That's one of the reasons.
But the biggest reason is that they tend to be well and truly overpriced when they're sold. Well and truly priced above the prevailing housing stock on the established market and people who buy them tend to have to wait years and years, and many years often, not only to maintain value but also to grow substantially. Remember the benchmark: it has got to double in value every seven to 10 years. I would have to say, I can't think of too many examples of off-the-plan apartments for investment purposes that have actually fulfilled those criteria.
Q. If you did see that an off-the-plan apartment building was going up in an area that you'd focused on - do you think that would be a positive or a negative for that area?
I think it depends on the kind of development it is. How big it is. Exactly where it is. We've seen this, certainly in Melbourne and in Sydney many many times, where there have been proposed off-the-plan apartment buildings that have caused absolute uproar amongst the residents. So you have to really deal with that on a case-by-case basis.
If we're talking about a small, tasteful, boutique development of between four and six townhouses or some nice apartments, they're generally not a problem in terms of adversely affecting the value of existing housing stock. It's only when you start looking at towers of multi-storeys with lots of apartments that residents begin to get nervous. And rightly so, because it does affect the level of amenity in the area. Which is what those existing residents have paid for and it's why they've got into those areas in the first place because of the lifestyle and the level of amenity.
Which Australian properties will double in value over the next decade?
Sure as fuck wont be moop or crazy dave/goldbugs
Ignore posts by The Whole Truth · View Post · End Ignoring The forum fuckwit goes RRRAAARRRGGHHhhh - But not a fuck was given..................by anyone.
By Cameron Kusher on September 12, 2013 in Economics, Housing supply, Population growth, Research
Australia’s rate of population growth is continuing to ramp up, placing consistent upwards pressure on demand for housing. The macro level demographic data is only up to date to December last year and population estimates for smaller regions such as council areas and suburbs, has only just been released current to June 2012.
At a high level, based on the December 2012 demographic statistics, Australia’s population increased by 1.8% over the 2012 calendar year; the highest rate of population since December 2009.
At a lower level, it is clear that the vast majority of Australia’s population growth continues to be most concentrated within the capital cities. About 66% of Australia’s population reside within one of the eight capital cities, however, the overt the 2011/12 financial year the capital cities accounted for 75% of the population growth.
The rate of population growth is quite diverse from city to city and region to region. Perth is recording the highest rate of population growth at 3.6% over the 2011/12 financial year. Importantly, the City of Perth accounts for just 8.4% of Australia’s total population but over is attracting 18% of the population growth.
Similarly, Australia’s third largest city, Brisbane, is home to 9.7% of Australia’s population but is recording 12.1% of the nation’s population growth.
At the other end of the spectrum is Tasmania. The capital city, Hobart, is seeing its population rise by just 0.3% while the population across regional Tasmania is absolutely flat with a 0.0% change over the year. Not much demand for housing there.
The maps and tables below provide a good overview about where the trends for housing demand have been most evident over the past decade.
Well if we look at which ones doubled over the last decade we might get a clue... O that's right, in real terms were back to 2002 levels so no joy there.
Shadow was hopelessly wrong about the Gold Bull Market. What else is he wrong about?
Well if we look at which ones doubled over the last decade we might get a clue... O that's right, in real terms were back to 2002 levels so no joy there.
Growth that matches inflation is fine by most people. That still means that the value of their home will double every 20 years if we assume inflation is about 3.5% It still means that over 40 years of occupancy the value quadruples and the debt diminishes to insignificance.
It's not so much the extra value in a house that matters. If you own a house today and in 20 years you still own the same house, then there is no gain if houses were currency.
The diminishing value of the debt is where the real gains are.
Any expressed market opinion is my own and is not to be taken as financial advice
Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.
Forum Rules:
The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.
Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.
Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.
This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.
Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ
Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy
