How property rewards those who wait

Australia has one of the most impressive track records for long-term property yield in the world, but often, the biggest mistake property investors make is not being patient enough to truly reap the rewards.

Just how well has Australia’s property market performed?

Well, according to a recent report from the Switzerland-based Bank for International Settlements, the long-term rise in Australian house prices since the early 1960s has been the most sustained property market upswing in the world.

But that doesn’t mean the country is immune to stagnation and slumps. In fact, these are a normal part of the property cycle – that is, the habitual rise, fall, stabilising (and then rising once again) of property prices.

Like many other types of long-term investments, it pays to be patient and remember that in many cases short-term volatility is being underpinned by long-term growth – you just have to hold on!

Take some of our clients as an example:

In 2008, we negotiated the sale of a block of 91 two-bedroom, two-bathroom, one car apartments in Sydney’s southwest.  The sale price was $405,000 per apartment.

We sold all 91 apartments and a couple of years on, some clients mentioned that the apartments had only grown slightly in value and that rental yields were low. We reminded these clients to be patient, mentioning that they purchased in a good suburb and at a good price and that they will see the greatest results if they hold onto their properties.

Nevertheless, a few became restless and sold in 2010/2011. After costs, they made little profit, most just breaking even.

Nine years on the apartments were recently valued conservatively by a bank at $875,000 ­– and they’re expected to continue growing in value. Over this period, we have seen rents wax and wane, some years increasing by as much as 5%, others decreasing by a few percent as more property came onto the market, followed by years on flat growth before increasing again.

The takeaway here is to be patient and to consider the long-term growth in value of your investment – though that’s not to say there won’t be a time when selling is the best option. This could be because of unexpected life events requiring you to free up your money, or to take advantage of a suburb/city boom that may be short-lived (e.g. holiday towns). You may consider selling a property to finance the acquisition of an investment with greater potential.

In any of these cases, the team at Providence can support you with advice and services to help you make an informed decision about buying your next home or investment property, or deciding which agent to use and which approach to take when the time comes to sell.

But remember, be patient!

Ultimately, the message here is to be patient with property. In many cases, the longer you hold on, the greater your returns. Fluctuations in market, including stagnation and slumps are normal in all property markets, though in almost every case, and certainly in Australia’s big cities over the past half-century, the overall property price trend is pointing one way… up.

 

If buying your ideal investment property for less sounds appealing, download our latest free report for the complete 7-step process for securing the perfect investment property in your price range. DOWNLOAD HERE.


Providence Property Group is a specialist property advisory firm providing unparalleled research-driven insight into the Australian residential, industrial and commercial property markets. Providence is a strong advocate for responsible and informed investing and supports clients to find and secure successful investment opportunities across Australia.

Property Cycles and You

Wash. Rinse. Repeat.

Many people apply this methodology to hair, but there’s a similar pattern that exists within the property market – and understanding it can be incredibly empowering.

Have you heard of property cycles?

If you haven’t, you’ve at least experienced them. Think a steady (sometimes surging) period of property growth, an inevitable downturn and then the stabilising period where a ‘new normal’ (average house prices) is set. Property cycles are not often experienced nationally, in fact they are usually localised.

For example, rarely will every Australian capital city be in the same stage of the cycle at the same time. Each market is influenced by unique factors, which impact price and demand. Sometimes even within cities, different suburbs will experience their own cycles.

In any case, this phenomenon is commonly referred to as Boom. Slump. Recovery.

Many factors influence the property cycle, including social, economic and political trends, along with population growth and property supply. Despite fluctuations, history has shown that property cycles are quite predictable and come with a reliable set of markers during each stage.

Here’s a breakdown:

Boom (growth phase) – rental yields increase, restrictions on property lending loosen, properties sell faster, house prices start rising slowly and eventually begin to peak, increased media attention and urgency around property affordability is also common

Slump (the value phase) – the market starts to slow and eventually stagnates, property prices can fall but not always, rental vacancies increase, properties take longer to sell, investor cash flow is reduced and stricter lending conditions often come into play

Recovery (correction phase) – property prices begin to show positive growth again, rents and cash flow increase for investors, properties begin to sell quicker and cautious optimism from market observers typically ensues

We’ve documented the overall property cycle and its nuances extensively. A full cycle is, on average, made up of around 18.5 years, including:

  • First upswing / return to growth – 7 growth years
  • Mid Cycle Slowdown – around 1 year typically of sideways or slightly negative movement
  • Second upswing / The boom – 7 growth years
  • Peak, crash, recovery – 4 years negative growth

These property cycles have been tracked since the 1700s and aside from interruption from very significant global events, typically world wars, they have been remarkably consistent.

How to use the property cycle to your advantage

This is the part you’ve probably been waiting for. We know the property cycle is real and we know that harnessing it is a strategically smart way to maximise property returns and rental yield. But how do you determine where various properties are in their cycle?

Many clients come to us asking this question and fortunately, we have an entire service based around providing expertise in this area.

Our research begins by considering market cycle timing using in depth analysis of cycles.

We recommend areas that are close to the bottom of the cycle and which are poised for an upswing or which have just commenced their upswing. In this way investors get an immediate equity lift in their portfolio from the market itself.

In addition to market timing insight, we review broader national and international themes and trends that will benefit particular geographical areas of Australia. Our data comes from overseas government research, Australian federal, state and local government departments, leading economists and analysts along with research from international and Australian banks and property research firms.

The result is an informed purchase for you, and one which has the greatest chance of reaching your short and/or long-term investment ambitions.

Get serious about learning more about property cycles

If this blog has whet your appetite on the topic of property cycles, we encourage you to explore our services and learn more about how we can use our expertise to seriously support your property-purchasing efforts.

Get in touch with our team and benefit from our research-driven insight and high-level strategic advice.

 

property cycles

8 investment property considerations you shouldn’t ignore

Looking for a great investment property is not an easy task, especially when you don’t really know what you’re looking for. It’s vital to understand which factors should be considered that make an investment property a great decision.

If you want to purchase an investment property that will be effective in creating wealth for you, there are a number of things to consider. Some are essential, some less so — some you really can’t afford to ignore.

Let’s look at eight considerations that are a must when it comes to buying an investment property

  1. Know your goals If you are to take only one thing from this article, it should be to “Agree upon, Set and Stick to your goals”. Generally, people who invest in property are looking for four main factors. These are:

-Growing Wealth through Equity

-Saving for retirement

-Increasing their income from rental yield, and

-Minimising their taxable income through Depreciation & Tax Credits

It is imperative that you know WHY and HOW this investment is going to benefit you in the long term. Providence always           takes the time to establish your goals and circumstances before presenting properties that match your criteria.

 

  1. Capital Growth Rate – If you are looking to build your wealth via equity with the goal of either creating a property portfolio or paying off your home loan faster, you are going to need to know the 10 and 20-year capital growth averages of the suburb you are looking at investing in. This data will give you a conservative and accurate understanding of what to expect the property’s value to increase by in the years to come.

    Take note that for the best chance of achieving your financial goals, you should do the figures to ascertain when you will be able to afford to purchase your next property, and how many properties you need to strive to own.

 

  1. Rental Income – Most Australians use their property’s rental income to service their investment loan. You should always obtain multiple rental appraisals from local agents to minimise surprises and use the average of all three to create your budget.

 

  1. Use a professional property manager – Poor handling of your property and its tenants could seriously hinder your wealth creation journey. Engage and pay for a professional who will take care of all aspects of your property’s management. Remember, the rental management fee is tax deductible, so choose a rental manager who minimise any potential stress and maximise your property’s performance. Get a rental manager to take care of everything, from paying water rates and body corporate fees to land tax and council rates. You pay them to manage your property so get them working for you.

 

  1. Vacancy Rates – In order to make sure you are buying a property in an area where there is low supply and high demand, it’s important that you know a suburb’s current vacancy rate. Vacancy rates represent the amount of properties in a specific area that are vacant or unoccupied at a particular time. Vacancy rates can be affected by a number of factors, one of which is the amount of new properties that are being built. This is why you should always be up to speed with local council development applications. You can find this information on most local council government websites.

 

  1. Employment Drivers – It’s very important to know what employment centres are going to sustain and stimulate job growth near your property. Why is this important? Because job growth will promote steady population growth. As more people gain employment in the area, they are likely to want to live close to work too, resulting in increasing demand for property. And more demand will only continue to drive property values up.

 

  1. Transport – Location is and always has been a crucial factor when choosing where to live. People are frequently willing to sacrifice the size of their land or even the size of their home for a desirable location. Easy access to amenities is sure to increase the desirability of any area, so when looking at a property’s location, ask yourself: is it practical and easy to travel to local amenities, education centres and entertainment venues? What public transport infrastructure is already established or coming?

 

  1. NAPLAN Scores – In 2008 NAPLAN was introduced into the Australian school system. Its impact on the property market: Suburbs within catchment zones of high NAPLAN-scoring schools have seen increased demand. Parents are seeking out homes which allow their children to attend these schools that will potentially give their children a higher level of education.

 

Property is likely to be the biggest investment of your life. With the right support and guidance, it can also be the best investment you ever make. Speak to Providence today about growing your property portfolio. Email us at info@providenceproperty.com.au or call 1300 25 25 50.

Blacklists – the truth behind the bank’s ‘high risk’ suburbs

Chances are you’ve heard of the banks’ property ‘blacklists’ – the suburbs that the banks really don’t want to lend you money to purchase in. If you’re shopping for a loan to buy in a bank’s blacklisted suburb, you will find they will decrease the Loan to Value Ratio (LVR), therefore requiring an additional deposit of 20 or 30 per cent and reducing the perceived risk to the bank. Or they simply won’t lend to you.

A quick Google search will give you results like an article in October 2017 that claimed 600 towns and suburbs were on NAB’s property lending blacklist. But how valid are these lists and how transparent is the information provided? What agenda is driving these suburbs to appear on the list one month and gone the next? How valid are these blacklists, and how they can affect people as purchasers, whether you are an occupier or an investor?

The central question here is how does a bank decide that a suburb is too high risk for their liking and should belong on their blacklist?

There are two reasons why a suburb might appear on blacklists.

Reason 1. The banks believe a certain suburb has too much supply, with an excess of development being carried out. This could apply to suburbs with high density housing or low density new house and land estates.

Reason 2. The banks have too much exposure in one particular suburb. For example, the bank may have lent too much money to investors and/or owner occupiers.

Looking at the first reason, a suburb being on a blacklist can be a good reason to dig deeper and look at the supply and demand in the area. For more on how to utilise supply and demand figures in real estate, take a look at our recent article ‘The danger of misunderstanding figures for supply and demand in property’. Don’t just accept that the suburb you’re interested in is on a bank’s blacklist and scratch it based on that fact alone, because it just isn’t enough — as is clear from reason two.

Reason number two is a crucial reminder that different banks may treat your lending needs differently based on their own interests. While one bank may be looking to limit their exposure in a certain suburb, another may not have that same overexposure.

The truth behind blacklists is that banks may very well choose to blacklist suburbs because of their personal, circumstantial risk assessments, not to protect potential lenders from a poor performing suburb as some may be lead to believe.

When property blacklists and results don’t align

Over the last 12 months the Sydney property market has declined 0.32%, however the suburbs NAB Blacklisted in Oct 2016 have performed very well.

This list shows Sydney suburbs that were on that NAB October 2016 Blacklist, demonstrating that while a 20 per cent deposit was required to gain a loan to purchase in these areas, they performed well.

Chatswood NSW: 12 Month Growth House 4.42%, Apartments 7.07% growth

Average 10 Year Capital Growth: House 9.91%, Apartments 7.58%

Putney NSW : 12 Month Growth House: 31.58%

Average 10 Year Capital Growth: House 8.99%

Newington NSW: 12 Month Growth House 5%, Unit 2.64%

Average 10 Year Capital Growth: House 7.78%, Apartment 6.29%

Auburn: 12 Month Growth: House 9.48%, Unit 5.66%

Average 10 Year Capital Growth: House 9.32%, Unit 8.04%

Baulkham Hills: 12 Month Growth: House 10.91%, Unit 14.04%

Average 10 Year Capital Growth: House 9.22%, Unit 7.65%

The Ponds: 12 Month Growth 7.14%

Average 10 Year Capital Growth: 14.15%

 

The impact of blacklists on selling

Blacklists aren’t just a buyer’s consideration — if you’re selling in a blacklisted suburb, you could be affected too. We frequently help clients through the process of selling property, and a blacklist is something we take into account when timing a sale.

Even if a suburb has been performing well, reluctance from banks to lend to buyers interested in your blacklisted suburb or requiring a larger-than-normal deposit means you could experience reduced interest or find your buyers require more time to secure finance.

 

The broader impact of blacklists

Understanding that blacklists are not always what they seem is essential because they are often referenced as a means of assessing the state of the property market.

Lending blacklists that keep coming up from banks seem to be the basis of many articles that feature in publications, such as the Financial Review as an example. These articles use these lending blacklists as an indicator of what’s happening in real estate more generally. However, as we’ve explored throughout this article, while a suburb appearing on bank blacklists could encourage you to explore its potential risks, there are many bank-centric reasons why blacklists feature the suburbs that they do from one month to the next.

Certainly major economic occurrences such as a downturn in the mining industry will trigger a bank to place suburbs on a blacklist, but only when the major industries are slowing down. In this instance, the property market would have already started to cool when banks announce the suburbs to go on the blacklist.

In summary, while you shouldn’t base property decisions solely on blacklists, they are still something to add to your research arsenal. Never let a bank’s property blacklist deter you from a purchase without doing the research yourself.

Better yet, enlist our help in assessing the optimal property investment choices to reach your goals. We take a three-tiered approach to property research and our experienced team of property investment experts can use our proven strategies to help you discover advantageous property opportunities. Contact us here or call 1300 25 25 50.

 

 

Written by Lynton Stevenson, Managing Director at Providence Property Group.

3 things you should know before investing in Sydney

As the most sought after and populated capital city in Australia, it’s no surprise that people get excited about the prospect of investing in Sydney.

Over 70,000 people make the move to Sydney every year! With our world-class landmarks like the Opera House, Sydney Harbour Bridge and incredible beaches, it’s really not surprising that so many people want to call Sydney home.

While our beautiful city and culturally diverse suburbs have many drawcards for people choosing somewhere to live, is investing in Sydney really the best option currently?

Considering investing in Sydney? Read this first.

As leading data and research professionals for property in Sydney and beyond, at Providence we spend much of our time analysing the performance and cycles of Australia’s property market in various regions. Our role as Buyer’s Agent, Selling Agent and more means we combine our extensive knowledge with on-the-ground expertise to be able to provide you with valuable property market insights. Here’s what you need to know before investing in Sydney:

  1. High premiums

In the past seven years since 2011, the Sydney property market has gained over 76% in capital growth (averaging 10.85% per annum). As a result, Sydney buyers are now paying the highest premiums in Australia. Compared to other states, as much as 50% more than Brisbane and 30% more than Melbourne.

  1. Weak yield

You are also receiving the lowest rental yields. Which means the cash flow return on your money invested is the lowest in Australia at around 2.8%. Not so attractive when compared to Perth at 3.7%, Brisbane at 4.1% even Hobart at 5%. As a result of Sydney’s weak yield, ability to service their loan is now becoming out of reach for most investors.

  1. Market currently cooling

Did you know, between 2001 & 2011 the city of Sydney was the worst performing capital city throughout the whole of Australia with an average yearly growth rate of only 4.4%? How did this compare to other cities? During this time Hobart had a higher average yearly growth rate of 4.6%, Melbourne 7.1% and Brisbane 7.68%. Our research suggests that the Sydney Market will cool over the next twelve months and capital growth numbers will probably normalise to similar levels we saw between 2001 and 2011.

The good news is that the investment dollar is transferable. This leads investors to explore opportunities in other major capital cities where historically during this phase of the property cycle they have benefited from above average increases in capital growth.

So where should you invest next? That is something we can explore with you, to ensure you have the best chance of choosing an investment that works hard for you and gets you the results you’re looking for. Contact us here.

Should you buy an old property or a new one?

It’s a straightforward question with a less than straightforward answer: when investing should I buy an old property or new?

If one thing is certain, both have clear benefits and disadvantages, with experts divided on which is the preferable option. Generally, all properties need to be viewed and assessed independently – some older properties will easily outclass their new counterparts, and vice versa. There are however, a set of general guidelines which apply to both new and existing properties worth thinking about while you shop around.

Benefits of buying an older property

One of the most attractive benefits of nabbing a pre-existing property for investors is the generally lower purchase price compared to a new dwelling. Adding to this, older style properties are not only cheaper, but often come with value-add opportunities in the form of renovations. As long as renovations are aesthetic (as opposed to any costly structural changes), then renovating an older property gives you the opportunity to substantially increase its value.

Whilst on the topic of price, since purchase costs are lower, you’re generally less likely to have shortfalls with bank valuations, so financing the property may be easier.

Another benefit includes the ability to inspect the property (if comparing with new ‘off the plan’ options) that extends to greater assurance of the property’s build quality.

Lastly, buying an older property in an established area can give you a more accurate idea of its value since you can compare it with other pre-existing dwellings. This is a helpful benefit when purchasing and potentially selling the property later on.

Benefits of buying a new property

Newer properties are a mixed bag of house and land packages in outer city suburbs as well as redevelopments closer to the city and off-the-plan apartments and townhouses.

These new home options aren’t created equally in terms of investment opportunities and returns, though buying new, for potential savings and tax depreciation, is a generally universal benefit. For investors, there are much larger tax depreciation advantages (for new homes) that reduce the holding costs of your investment property. Meanwhile, significant stamp duty benefits can mean thousands of dollars in additional savings.

Other benefits include the generally lower maintenance of new homes as well as generally higher rental yield and lower vacancy rates for investors looking for a rental investment.


Disadvantages: older properties

In the case of older properties, it’s especially important to lean on building inspectors, surveyors and solicitors to ensure that your investment is ship-shape before proceeding. Older properties can have structural issues that require costly repairs, whilst easements or caveats on the title may affect your plans to subdivide or renovate the property.


Disadvantages: new properties

If you’re looking at a new property as an investment, focus on areas where there is limited supply, or you’ll risk slow capital gains growth and weak rental demand. You should also do your homework when assessing the builder. What you save in taxes you may end up paying back in repairs or legal fees if you buy a property built buy a sub-par builder seeking to make a quick dollar.

If shopping for apartments in particular, over-supply of new establishments can make your investment difficult to rent out, so be wary.

So, should you buy old or new?

Yes we know, we still haven’t answered the question. As you’ve probably guessed that’s because there is no single answer to suit every person and situation. Older properties are generally less expensive and if you find one in a good area that’s structurally sound and can be easily (and inexpensively) renovated, then you’re probably on to a winner.

On the other hand, new homes provide outstanding tax benefits for some investors and they’ll generally be less of a headache as long as they’ve been built well. They may even make for an excellent investment as long as they’re in low supply, in a high demand area.

If you want expert advice or a second opinion when comparing new versus old properties, get in touch with our team at Providence. With over 10 years of experience, we can assist you to identify investment opportunities that suit your budget and goals, assisting you throughout the process, from research to acquisition.

Get in touch with us for an obligation-free chat about increasing your portfolio.

Written by Lynton Stevenson, Managing Director, Providence Property Group.

Delay your investing and you could pay the price

If investing in property is on your list of things to do, it’s worth getting serious about planning when you are going to take action. Delay investing in property and you could regret it.

When it comes to making big investments, or any big decisions really, we tend to take our time. Being careful and considered is definitely important, but it’s also vital to be aware of the potential cost of choosing to delay investing property.

We live in a digital age where almost every man, woman and sometimes even child has a mobile phone device or tablet that gives us instant access to an entire world of opinion and information. What a time to be alive! Unfortunately the information superhighway has become saturated with literally millions of articles on every facet of investing. It is almost impossible to distinguish fact from opinion. Pile on top of that the normal demands of life, it’s no wonder many investors fall victim to procrastination and eventually deciding to revisit the idea of buying their next property in a few years.

It’s important to realise though that the cost of delaying your investment by only a few years is significant — and a decision that could cost you tens or even hundreds of thousands of dollars!

If you delay your investing for just two years, the cost is NOT the return from years one and two. It is the return you will miss out on in the latter two years of your investing. We’re talking about the difference between years 24 and 25 in the case of a hypothetical 25 years of ownership.

Consider this example. You decide to purchase a $500,000 property using a 100k deposit with an 80% LVR on purchase. For this example let’s assume that the yearly capital growth of the property is an average of 5% over the life of your investment.

Now looking at the difference in equity between holding the property for either 23 or 25 years – if you were to buy today or delay for two years – this two year delay results in a difference of $157,416. That’s a difference of $78,708 per year! Very significant I’m sure you will agree.

don't delay investing in property

If you have been thinking about investing in property, but are yet to take action, now is as good a time as any to get serious about your wealth creation.

We can help you make informed and wise choices when it comes to your property investment options, so you don’t have to do it alone. Don’t delay investing in property – talk to us about getting started.

 

 

Written by Lynton Stevenson, Managing Director, Providence Property Group.

Australia’s Property Market in 2017 (and what to expect in 2018)

During the past twelve months we’ve seen some important shifts in property market conditions across Australia’s capital cities. As is often the case, past activity can help us predict future trends, and so in this article we’re not only putting the last 12 months under the microscope, but looking to the future too.

As a whole, Australia’s property market seems to be cooling. According to research from Core Logic, 2017 was the weakest calendar year for value growth since 2012. National dwelling values were down 0.3% over the three months to December 31. This is the slowest quarterly rate of growth we’ve seen since April 2016. Although Sydney remains the nation’s most expensive city, dwelling values fell over the final quarter by -2.1%, along with Darwin down -2.9%. Over the same period, growth continued in Melbourne 0.9%, Brisbane 0.3%, Adelaide 0.3%, Perth 0.1%, Hobart 3.1% and Canberra 1.0%.

Growth in the major capitals over the past 12 months has been modest – Sydney 3.1%, Melbourne 8.9%, Brisbane 2.4%, Adelaide 3.0%, Perth -2.3%, Hobart 12.3%, Darwin -6.5% and Canberra 9.6%.

australian property market

In Sydney and to a lesser extent Melbourne, it appears that price growth has slowed for the time being. This can be attributed to a range of factors however a key driver of slower growth has been tighter credit policies which are changing the way investors can access funds. In particular, bank regulator APRA has imposed stricter conditions on the amount of interest-only loans banks can lend investors.

Ultimately though, past experience tells us that fluctuations in property demand and value are cyclical in nature and normal. For 2018 we’re expecting a fairly solid but unspectacular year for property. We’re likely to see lower growth rates, across previously strong markets (perhaps even slightly negative) with more cautious buyers, and ongoing regulatory interference around credit standards and investor activity.

In spite of these property headwinds, we’ve seen the Australian economy growing around 2.8% annually; interest rates are low; public and private infrastructure investment is increasing; globally the major economies are doing well and commodity prices have been improving. This bodes well for rising land prices and house prices. Therefore we think it’s a relatively good bet that average Australian property prices will increase in 2018.

Snapshot: Australia’s property market in 2018

Looking forward to a new year, there are still opportunities aplenty for investors seeking to strike gold in the Australian property market.

These three key factors will play an influential role for investors who are ready to grow investment portfolios in 2018:

A cooling market: Shrewd investors will have the chance to take advantage of plateauing or even cooling property prices in the country’s two big cities, as well as opportunities in cities better placed in their growth cycle like Brisbane.

Infrastructure boost: Planned major infrastructure projects in main cities promise to boost property values over the long term.

Low interest rates not rising in a hurry: Mortgage interest rates remain at a record low and aren’t expected to rise in the immediate future. Plenty of time to plan for future rises while enjoying the current low.

As strong advocates of responsible investing with over 10 years of experience, the Providence team can assist you in identifying the best growth opportunities that suit your budget and goals, assisting you throughout the process, from research to acquisition and more.

Get in touch with us for an obligation-free chat about increasing your portfolio (or starting one for 2018!).

 

 

Written by Lynton Stevenson, Managing Director, Providence Property Group.

Why savvy investors choose Brisbane property

Brisbane is a hot favourite amongst property investors and with a range of infrastructure upgrades and developments pegged for the city and surrounding regions over the coming years, the trend looks set to continue. So why invest in Brisbane property? There are plenty of reasons.

Brisbane (compared to Sydney and Melbourne in particular) is more affordable and benefits from a higher income return for property investors. Many experts agree that whilst interest rates are low, Brisbane is a standout city for growing your investment portfolio.

This sentiment is echoed by investors.

According to a survey by the Property Investment Professionals of Australia (PIPA), Brisbane remains the top capital city pick, with 43 per cent of investors choosing it as their preferred destination for property investment.

So, let’s take a look at what makes Brisbane such an attractive investment location.

The population is migrating

Sydney house prices are nearly double those in the other capital cities. This, combined with rising job creation in Queensland, is creating an influx of migraters. According to research, when these factors have aligned in the past, more than 134,000 people have trekked up north over a 3-year period, predominantly out of NSW.

Wealth is transferring

Migration shifts like the one described above result in a transfer of wealth – with estimates of up to A$8.1bn of equity being injected into the Brisbane and South-East QLD housing market over the coming years. In turn, this will impact consumer spending too – boosting the Queensland economy.

Less oversupply

As interstate migration goes up, property oversupply balances out. In Brisbane’s case, this means balancing any current oversupply of apartments whilst putting upward pressure on house prices.

The city is booming

Perhaps one of the most exciting (and important) reasons Brisbane is becoming the property investors top choice is the significant services and infrastructure upgrades taking place across the city (and beyond) over the coming years. Some highlights include:

Brisbane Live – An entertainment precinct penned to be Australia’s equivalent to New York City’s Madison Square Garden. The development will include a 17,000-seat world-class arena along with a 4,000-capacity rock club, multiplex cinemas, restaurants and bars, and a giant screen and amphitheatre to accommodate up to 15,000 people. The precinct’s other attractions include a proposed signature 90-storey residential tower and dining precinct.

Queen’s Wharf Brisbane – This will develop into a world-class tourism, leisure and entertainment precinct in the heart of the CBD, which is expected to create permanent employment to more than 8,000 workers once completed in 2022. The development is estimated to attract 1.4 million additional tourists yearly via five new premium hotel brands, three residential towers, a department store, an iconic ‘Arc’ building that will feature a Sky Deck, a riverfront moonlight cinema, a Queensland Hotel and Hospitality School operated by TAFE Queensland, and redeveloped public realm covering an area of at least 12 football fields.

Cross River Rail – This project will improve Brisbane’s public transportation landscape with a railway connecting Dutton Park and Bowen Hills. Between the destinations will be five new stations at Boggo Road, Woolloongabba, Albert Street, Roma Street and Exhibition, including 5.9km of underground tracks beneath the Brisbane River and CBD.

Herston Quarter – Upon completion in 2027, this precinct will include a 132-bed public specialist rehabilitation and ambulatory care centre, a new private hospital, childcare and aged care facilities, retirement homes, student accommodation, private apartments, dining and retail areas and renovated heritage buildings. Approximately 7,000 new jobs will be generated over the development period.

Interested in investing in Brisbane property, but not sure where to start?

As you can see, choosing to invest in Brisbane presents an incredible opportunity for property investors, but knowing where to begin can be difficult. As a specialist property investment and advisory firm, we provide our clients with responsible and informed investing advice – with expert knowledge in major Australian cities. We can assist with all aspects of the investment journey from professional guidance, to property negotiation and purchase, finance and further assistance.

Satisfy your curiosity and get in touch with our team to find out how investing up north can supercharge your wealth.

 

 

Written by Lynton Stevenson, Managing Director, Providence Property Group.

7 reasons to consider a Nano Home investment

It’s time to rethink the ‘granny flat’. Building a small home in your backyard no longer means compromising on quality, technology, or architectural flair – and investors are taking notice. In partnership with a leading Australian owned modular building company, we’ve created a game-changing Nano Home solution that’s appealing to a new kind of property investor – and generation. Nano Homes are high-quality, pre-assembled homes designed to fit in the backyards of existing properties. These seven reasons explain exactly why Nano Homes can make a powerful investment.

1. Massive rental yield potential

Turning your unutilised land into a source of income is a pretty amazing idea – and one which the Nano Home is making a reality for homeowners across Australia. In parts of Sydney, investors are earning as much as $575 per week from their Nano Home, which equates to more than 14% in rental yield. That’s a result that far outweighs most traditional rentals.

2. Minimal fuss, maximum impact

A complete turn key solution, it generally takes no more than 12 weeks from your initial consultation and site assessment to have the keys to your Nano Home in your hands. The modular homes are created off-site, which means minimal disruption to you, and they are installed in as little as five days by the time they arrive at your address. But make no mistake; this is not a no-frills affair. Our Nano Homes feature standard premium design features like ducted air conditioning, double glazed windows, European appliances, lighting control, upmarket finishings and more.

3. Value for money: low cost, high rental yield

If you’ve got a block of at least 550sqm then you could be eligible for a Nano Home. Since you’ve already got the land, all you need to do is pay for the home, which will set you back around $139,920. Many owners and investors find the value of their property immediately goes up by more than this cost.

If the price sounds higher than you may have anticipated, consider this: to invest in a Nano Home means you invest in high quality fixtures and finishes, even en suites. This translates into greater depreciation benefits than a standard granny flat, giving you substantial tax savings. It also means you’ll attract longer lasting tenants and produce higher rents. It’s likely that most comparable sized dwellings in your suburb are worth three, four, maybe even five times as much – making this an attractive low-cost investment.

4. Low risk

Building on the previous point, the relative low cost of Nano Homes also makes them a far less risky investment. What’s more, they have a range of uses – from rentals (pending your location), to creating additional space for your family, grandparent accommodation, an Airbnb space or simply adding value to your existing property. Our Nano Homes are built with quality in mind and are ISO 9001 and ISO 14001 compliant, giving you greater confidence that your investment is sound.

5. No lengthy approvals

In New South Wales your Nano Home can be approved as either a Complying Development Construction (CDC) or with a Development Approval (DA). For your Nano Home to be approved as a CDC there are a few boxes that need to be ticked. For example, the maximum floor area can be no greater than 60 square metres, the land cannot be subdivided, and the Nano Home must meet the planning controls such as building heights and setbacks for the SEPP (other regulations apply). If your Nano Home does not qualify as a CDC, or you live outside of NSW, we can assist you with your DA. In fact, we will manage all the paperwork and can even assist with finance. The aim is to keep it as stress free as possible.

6. Built to last

A solid steel-framed construction built to above Australian standards, quality fittings and appliances and a 25-year warranty combine to give you peace of mind that your Nano Home through Providence will stand the test of time.

7. Adapt to changing market demands

In many ways, small is the new big – with a growing preference amongst younger generations for less space and maintenance, albeit with greater proximity to the city. To invest in a Nano Home, particularly if your property is situated in a sought-after suburb, provides supply to meet the demands of a new generation of dwellers. Plus, being generally closer in proximity to landlords, Nano Homes often attract better-quality tenants.

Want to know more about how to invest in a Nano Home?

When you invest in a Nano Home you can drastically increase the value of your property whilst creating an additional source of income. Explore our website to find out more about these small homes with huge potential.

 

Written by Lynton Stevenson, Managing Director, Providence Property Group.