Investor

Encompass is a new development rising nine storeys in Melbourne&rsquo;s inner-northern suburb of Carlton, delivered in partnership between Frasers Property and Citta Property Group and currently under construction by the reputable Harris HMC.

At the &ldquo;centre of everything&rdquo;, Encompass is located on the corner of Elgin and Nicholson Streets, and the latest in a strong portfolio of premium residences by the two leading property groups.

Comprised of one, two and three-bedroom apartments, the project provides a great lifestyle opportunity for discerning buyers seeking the best of architecture, outdoor spaces, sustainability, and urban living.

But why invest? Urban takes a look at eight reasons why investors are showing interest in this new development.

1. Melbourne&rsquo;s most walkable neighbourhood

Carlton has been named Melbourne&rsquo;s most walkable neighbourhood by Walk Score, with a score of 97 attributed to its convenient local amenities.

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Residents at Encompass can walk to around 50 restaurants, bars and coffee shops within five minutes.

Benefitting from strong local retail and amenity, education and employment hubs, as we shall soon explore, Carlton has it all.

2. Apartment affordability

Apartments in Carlton offer an affordable option for renters with median weekly rents registered at $360 for the year to March 2021, according to Urbis.

For new apartments&nbsp;in Carlton, median weekly rents registered at $410; a $50 premium over older apartment stock.

[smartcode_project:default project_id=5116 project_image_fid=188281]

This, coupled with a gross rental yield of 5.1 per cent, provides a big positive for potential investors looking to purchase an apartment in Carlton.

Investors are also likely to achieve a better return on investment as the rental market stabilises as a result of ongoing tenant activity.

3. Public transport

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With trams running along Swanston Street, Nicholson Street and Lygon Street, Encompass residents can feel connected to the Melbourne CBD.

The new Parkville station will also enhance the local public transport offering of Carlton, providing nearby access to the CBD and the remainder of Melbourne.

4. Open space and neighbourhood amenities

Leisure and open space are an important part of any neighbourhood, and Carlton is rich with parklands and gardens.

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World heritage site Carlton Gardens boasts nearly 20-hectares of parkland, and contains the Royal Exhibition Building, Melbourne Museum and tennis courts.

Other neighbourhood amenities include the Carlton Baths, which features a 25-metre public pool, as well as a health club and sporting facilities.

5. Retail and restaurants 

Carlton is characterised by its young and culturally-diverse population, reflected in its great bars and trendy caf&eacute;s.

Lygon Street, or &ldquo;Little Italy&rdquo; as it&rsquo;s known by locals, features almost 150 retail stores, including 80 caf&eacute;s, bars and restaurants, many of which are Italian. &nbsp;

Residents are never far from local retail amenity, with a Woolworths shopping centre nearby, as well as an IMAX cinema, bank and clothing stores.

6. Over $11 billion in infrastructure investment

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$11 billion in state and local government infrastructure investment is currently in the pipeline to benefit Encompass residents.

Key projects include the $11 billion new metro tunnel project to improve train capacity by close to 60 per cent and the $9 million University Square masterplan.

The $500 million redevelopment of the inner-city innovation precinct will also serve to introduce a new mixed-use precinct to the suburb that features office space, public engagement space and retail offerings.

7. Great design

Designed by Jackson Architecture, the design of Encompass is sure to see renters seek out an apartment in the new development.

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The architecturally distinctive building will establish a unique urban presence within Carlton and Fitzroy, while staying true to the neighbourhoods&rsquo; cultural heritage.

This extends into the interiors with open and bright living spaces, a paved terrace or balcony in each residence and carefully considered floorplans.

8. Nearby educational institutions

A number of educational institutions are within close proximity of Encompass, including Australia&rsquo;s leading university, the University of Melbourne, which sits along the western border of Carlton.

Several major universities are situated within walking or cycling distance for Carlton residents, including RMIT University, Victoria University Flinders Campus and the University of Melbourne&rsquo;s Parkville campus.

Primary schools nearby include the Carlton Gardens Primary School, Carlton Primary School and Carlton North Primary School.

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Urban takes a look at eight reasons why investors are showing interest in this new development

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Why invest in Carlton: Find out why investors are eyeing Frasers Property’s Encompass

Affordability issues appeared to have curbed borrowing activity of first home buyers and owner occupiers, but not investor loans in September, according to the latest Australian Bureau of Statistics data.

The value of new home loans dropped for the second month in a row.

In September, $30 billion of new mortgages were settled, down 1.4 per cent from August, in seasonally-adjusted terms.

Owner-occupier lending dropped 2.7 percent from August.

Investor lending continued to climb, reaching its highest level since April 2015 with $9.62 billion in loans settled in September, up 1.4 per cent month-on-month.

Increased investor loan commitments were seen across most states, with particular strength in Queensland (up 4.2 per cent), South Australia (up 16.4 per cent) and Western Australia (up 7.3 per cent). Smaller rises in investor borrowing were seen in Victoria (up 1.4 per cent), New South Wales (up 0.1 per cent), the Australian Capital Territory (up 1.0 per cent) and Tasmania (up 1.4 per cent). 

For the eighth conscutive month, the number of owner-occupier first home buyer loans fell, down 5.6 per cent in September, to be down 27.1 percent since the January peak.

Ratecity noted Victoria, in lockdown, led the retreat with the number of first home buyer loans dropping 16.7 percent in the month, while NSW dropped by 3.1 percent.

Western Australia fhbs had the largest rise of 5.9 percent, while Queensland rose 2.1 percent and South Australia rose 4.3 percent.

ABS head of finance and wealth, Katherine Keenan, said the average loan size for owner occupiers has grown, but the value of new loan commitments for owner-occupier housing fell for the fourth month in a row, to $20.7 billion in September.

"Affordability constraints are biting in the first home buyer space, with dwelling prices rising by over 20% on an annual basis," the Comm Bank said.

NSW owner occupiers borrowed an average of $750,000 in September which was a record high.

The big banks are all now applying stricter loan criteria on applications as of November 1 given lending requirements imposed by APRA.

There has been positive growth in investors taking on mortgages since October last year

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Investors return to property with six year borrowing high: ABS 

As COVID-19 marks the shift to valuing the importance of living nearby lifestyle amenities and natural spaces, beachside properties are becoming a hot commodity amongst investors and homebuyers.

Imagine investing in one of Australia&rsquo;s booming coastal hotspots, reaping the rewards of owning a beachside property in a suburb yet to reach its capital growth peak.

Urban takes a look at five properties in fast-growing beachside suburbs that may make for an exciting lifestyle change and strong investment decision.

1. Ryrie Home, Geelong

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Located in the fastest-growing regional city in Australia, Ryrie Home provides the ideal sea change for residents hoping to escape the bustle of cities like Melbourne and Sydney.

Located within walking distance to Eastern Beach, the property is also proving popular with investors. It was listed as Urban&#39;s most popular investor project for Q1 2021.

This is thanks to Geelong&rsquo;s low vacancy rate of 1.7 per cent and the 10 per cent per annum growth in apartments over the last three years.

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Investors are similarly drawn to the growing region thanks to transport improvements in Geelong, including the $100 million fast rail and the&nbsp;$6.7 billion Westgate Tunnel which will shave 20 minutes off any commute.

Developed by Franz&eacute; and designed by Architectus, the project boasts one, two and three-bedroom residences across 11 storeys, drawing upon Geelong&rsquo;s history and its architectural vernacular.

2. Siskas at Taskers, Fremantle

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Only a 20-minutes drive to Perth&rsquo;s CBD or a swift boat cruise to the magnificent Rottnest Island, Siskas is a great new development to hit Fremantle.

Delivered by Gary Dempsey Developments, the development makes up the highly-anticipated final release of their coveted Taskers development.

Just 250-metres to Rocky Bay&rsquo;s stunning riverside walking trails or 450-metres to the pristine sands of Leighton Beach, Siskas enhances the cosmopolitan way of life that is resonating with owner-occupiers and investors alike.

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Designed by Zuideveld Marchant Hur, the development features five-star hotel-quality amenities, including 3,000sqm of private landscaped grounds, communal herb garden and fruit trees and temperature-controlled wine appreciation room.

If you are looking for an investment property, Fremantle units rent for $430 per week with a rental yield of 4.3 per cent, according to REA Group.

3. Pearl, Main Beach

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Located at 3550-3552&nbsp;Main Beach Parade, Pearl rises 30 floors and boasts 80 two and three-bedroom residences in the affluent Gold Coast suburb.

Although demographics point to a large portion of established independents, youth and elderly singles, families moving to Main Beach have been steadily growing, making Main Beach an enviable location for budding investors.

This is all thanks to the convenience of living close by the Marina Mirage, which has an array of boutique shopping and waterfront dining experiences.

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Developed by Raptis, Pearl offers a striking architectural presence and includes an exquisite lobby, rooftop pool and easy beach access.

Over the past year alone, two-bedroom units in Main Beach have seen weekly asking prices grow 17.0 per cent, according to SQM Research.

4.&nbsp;La Sal, Chelsea

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Drawing inspiration from the salt and sand of the sea nearby, La Sal presents the perfect beachside lifestyle in Chelsea.

Hallmarked by investors as a good investment suburb, Chelsea ranks second in Victoria when it comes to estimated capital gains experienced by property investors over the past three years, according to Smart Property Investment.

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Conceptualised and crafted by Lowe Living together with the acclaimed Chamberlain Architects, this boutique series of three townhomes and six apartments lies moments from Chelsea Beach.

The contemporary two-level built form sits in perfect harmony with its stunning beachside setting, evoking the essence of its striking context.

5. Villea, Palm Beach

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Delivered by Abadeen Group, Villea is nestled in the heart of the Southern Gold Coast and located only 400-metres from the beach.

The development comprises two and three-bedroom apartments, all with secure car parking and unrivalled panoramic views. 
 
Located in a commanding position with 70-metres of Northern frontage, Villea boasts incredible views over the Pacific Ocean, Tallebudgera Creek and the Burleigh Headland.

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Designed by BDA Architecture, each apartment has been meticulously designed to maximise space, light, and liveability, with sophisticated interiors that celebrate attention to detail and premium finishes.

On the heels of surging interstate migration, Palm Beach units have had exponential growth of more than 83 per cent over the past half-decade.

Urban takes a look at five properties in fast-growing beachside suburbs that may make for an exciting lifestyle change and strong investment decision

Five of Australia's best holiday home apartments near the beach

Residents have moved into the completed Glen Waverley apartment project Sky Garden.

The striking project was developed by&nbsp;Golden Age Group&nbsp;to a design by&nbsp;Rothelowman.

With buyers having moved in, Urban spoke to investors, Pushpendu and Manisha Gupta about their property buying journey, and what they love about Sky Garden.

The Wantirna locals purchased a two-bedroom, one-bathroom as an addition to their diversified portfolio of property investments.

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MK: How did you discover Sky Garden?&nbsp;

P&amp;M: We discovered it online and after a few calls, we met the team at The Glen display suite and took the process forward.&nbsp;

MK: What makes Sky Garden an attractive investment opportunity?&nbsp;

P&amp;M: The perfect combination of quality, amenities and the amazing location that is within top school and transport zones.

Sky Garden is located just above a very high footfall mall in the east, and that makes it an unbeatable location from an established retail market perspective.&nbsp;

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MK: How do the returns in Glen Waverley compare to investments you have in surrounding areas?&nbsp;

P&amp;M: Glen Waverley is sure to be strong in terms of return on investment as the Glen Waverley secondary and primary schools are among the top in the state and very well respected.

The fact that Glen Waverley is also an established blue-chip suburb with good demographics and retail options, makes it the most sought-after suburb in the East.&nbsp;

MK: Which apartment configuration did you opt for, and what led you to narrow down your decision to the apartment you purchased?&nbsp;

P&amp;M: We opted for a two-bed, one-bath option as it&rsquo;s the best configuration for investment returns and rental.&nbsp;

The apartment we bought is in a secluded part of the floor with close proximity to elevators, which lends itself to both privacy and convenience.&nbsp;

[smartcode_project:default project_id=2881 project_image_fid=168551]

MK: Were you already looking for a new property when you discovered Sky Garden?&nbsp;

P&amp;M: We had just started looking at investment purchases when we discovered Sky Garden. The options we were given, and the amazing sales experience, made us decide on this apartment without really looking at other properties.&nbsp;

MK: What made you decide to buy?&nbsp;

P&amp;M: The property gave us the right combination of quality construction, facilities and amenities in a top-notch location.&nbsp;

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The fantastic sales and after-sales experience from Golden Age was the most pleasant experience, which made us feel at ease and like we had everything covered.

A special mention goes to Ms Silvia Pan for the absolutely fantastic and friendly sales experience and her support. She gave us so much time, taking us through all the options, responding to our queries and providing the right advice.&nbsp;

MK: What do you love most about what Sky Garden has to offer residents?&nbsp;

P&amp;M:

<ul>
	<li>The fantastic retail shopping and culinary experience with The Glen just below the property.&nbsp;</li>
	<li>The quality of construction and the wholesome facilities for residents.</li>
	<li>The location &ndash; near top-notch schools and transport.&nbsp;</li>
</ul>

MK: Do you have any advice for budding investors?&nbsp;

P&amp;M: Would recommend budding investors look at location as the primary deciding factor &mdash; preferably proximity to top schools &mdash; as these locations will always be in rental demand.&nbsp;

Quality of construction and after-sales and property management support is also very critical to consider.

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Urban spoke to investors, Pushpendu and Manisha Gupta, about their property buying journey, and what they love about Sky Garden

What investors are saying about their Sky Garden, Glen Waverley apartment purchase: Urban's buyer Q&A

First home buyers and investors&nbsp;have shown considerable&nbsp;interest in Due North, the Preston apartments currently under construction by Caydon Property.

The $352,000 asking price for the one-bedroom apartments is around $200,000 less than the median apartment price in Preston, according to the latest data from SQM Research.

The two-beds start from $590,000.

Set on the sought-after High Street, Due North will home a mix of 107 one and two-bedroom apartments.

[smartcode_project:default project_id=5502 project_image_fid=155332]

Preston is one of Melbourne&#39;s most popular fringe suburbs, nine kilometres north of the Melbourne CBD.

&ldquo;Thanks to a few decades of urban sprawl, Preston is now considered one of Melbourne&rsquo;s hottest northern suburbs.&nbsp;It seems like there&rsquo;s new, hip bars popping up on every corner&rdquo;, Timeout Magazine said.

[smartcode_project:default project_id=5502 project_image_fid=155331]

Due North has an enviable walk score of 91, with a number of&nbsp;bars, cafes, restaurants,&nbsp;retail, schools and parklands nearby.

The apartments are attracting investors, with vacancy rates seeing a steep decline from earlier in 2021. Rates now sit at around two percent, and are expected to continue to drop as international border opening draws near.

There&#39;s new infrastructure in the pipeline, with the Victorian Planning Authority currently reviewing plans for a new Preston Market Precinct, taking in 5.1-hectares of privately-owned land with integrations with Preston Station and High Street.

[smartcode_project:default project_id=5502 project_image_fid=155337]Interest in new infrastructure and great lifestyle opportunities makes the area worthy of investment, say the developers.

&ldquo;Preston is growing, fast &mdash; and we&rsquo;re not surprised&rdquo;, Caydon Property said.

&ldquo;Population density is increasing, seeing a surge in demand for apartments with a downturn in traditional houses.&rdquo;

<img alt="" height="850" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/screen_shot_2021-09-12_at_1.31.07_pm.png" width="1492" />

Designed by Caydon&rsquo;s in-house design team, Due North draws inspiration from the suburb&rsquo;s industrial past, featuring raw brickwork, exposed concrete, custom metalwork and glass.

It will rise just the 12 levels, and will feature a&nbsp;rooftop space with a resident swimming pool, a co-working area in the lobby, and three street-level&nbsp;retail spaces.

The development is slated to reach completion in mid-2023.

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Set on the sought-after High Street, Due North will home a mix of 107 one and two-bedroom apartments

$352,000 Preston apartments Due North attracting first home buyers and investors

Melbourne is expected to see prices continue to rise as unmet future residential demand shifts to emerging areas around the CBD.

With an upswing expected later this year as investor interest in the Victorian property market rises, buyers who get in early will be rewarded with competitive prices on off-the-plan residences.

Urban takes a look at the top four Melbourne apartments marketed as investor-friendly properties.

1. R.Iconic, South Melbourne 
Developer: R.Corporation 
One-bedroom apartments from $506,500

[smartcode_project:default project_id=5234 project_image_fid=167355]

Set on a rare island site with prime park frontage, R.Iconic has been labelled a great investment opportunity by its developers.

Apartments at the South Melbourne building are guaranteed to secure five per cent net annual return for four years, thanks to its great location in a high-growth Melbourne precinct.

&ldquo;The Emergence of South Melbourne&rsquo;s Montague precinct provides a generational opportunity to secure a new CBD quality apartment at an exceptional price that simply can no longer be delivered in the CBD&rdquo;, the developers have said.

[smartcode_project:default project_id=5234 project_image_fid=84282]

Investors will also enjoy knowing that R.Iconic residences boast deposits as low as $20,000, making it easy to invest in a project redefining inner-city Melbourne living.

Expected to reach completion in mid-2022, the building showcases one, two and three-bedroom apartment configurations and 38 world-class resident-only amenities.

Focusing on natural surroundings, wellbeing, fitness, entertaining and technology, R.Iconic has double the amenities of any project of its type.

2. Hawthorn Park, Hawthorn East 
Developer: Dahua Group 
One-bedroom apartments from $609,000

[smartcode_project:default project_id=3730 project_image_fid=35252]

Hawthorn Park is a sophisticated residential mid-rise that is strategically located amongst Hawthorn East&rsquo;s several transport, education, lifestyle and amenity offerings.

According to the DHHS, apartments in Hawthorn East have registered median rental growth of 4.2% per annum for one-bedroom apartments in the ten-year period to March 2021, in spite of the continued impacts of the coronavirus pandemic.

&ldquo;Looking forward, high demand driven by the catchment&rsquo;s proximity to education, transport and amenity, coupled with the ongoing growth of the renal market, is likely to attract market interest from interstate and overseas investors&rdquo;, the developers said.

[smartcode_project:default project_id=3730 project_image_fid=30658]

Residents will enjoy the property&rsquo;s landscaped green spaces and parks that feature fruit and vegetable gardens for dwellers to grow their own produce.

The project also features a sky boardwalk, splash pool, sky lounge, massage suites and fully-equipped gym.

3. Voyager, Docklands 
Developer: Mirvac 
Two-bedroom apartments from $706,500

[smartcode_project:default project_id=3494 project_image_fid=90814]

Docklands is continuing to develop as a place where people choose to live, work and visit, becoming the country&rsquo;s largest construction project.

Mirvac&rsquo;s Voyager at Yarra&rsquo;s Edge delivers a range of one, two and three-bedroom apartments across 43 levels.

According to the developers, &ldquo;[a]stute investors in Voyager will see opportunity in purchasing within the already established Yarra&rsquo;s Edge community.&rdquo;

Contemporary apartments and a number of resident-only amenities has encouraged investors to purchase into the development.

[smartcode_project:default project_id=3494 project_image_fid=89724]

Facilities include a resident sky deck, dining room and bar, hanging gardens, 270-degree skyline views and a cinema and karaoke room.

The rental market for Docklands is strong with median rents for two-bedroom apartments higher than across Greater Melbourne at $465 and $385 per week, respectively, according to SQM Research.

4. Ryrie Home, Geelong 
Developer: Franz&eacute; Developments 
One-bedroom apartments from $375,000

[smartcode_project:default project_id=5559 project_image_fid=88241]

Although not in Melbourne, local and interstate investors are flocking to coastal investments thanks to a shift in lifestyle for many city-dwellers.

Population growth is always a key driver for increased demand in the residential market and thanks to a population growth forecast at 3.14 per cent per annum, the demand for housing in Geelong will yield consistent returns.

&ldquo;The median sale price for apartments in Geelong has grown significantly, on average 10 per cent per annum over three years, this suggests strong capital growth returns&rdquo;, the project marketing stated.

[smartcode_project:default project_id=5559 project_image_fid=88244]

As the fastest-growing regional city in Australia, Ryrie Home delivers investors the pleasure of owning a beautiful apartment for an affordable price.

Each apartment boasts secure basement car parking and storage units, as well as access to hotel amenities, commercial retail and views across Corio Bay and the Botanical Gardens.

Melbourne is expected to see prices continue to rise as unmet future residential demand shifts to emerging areas around the CBD

The top four Melbourne apartments marketed as investor-friendly properties 

<html><body>
Low mortgage rates, a swift economic recovery, which has spurred consumer sentiment, and low listing volumes have catapulted national housing values to new record highs. At the end of March, the CoreLogic national home value index increased a further 2.8%, placing values 5.6% above the previous market peak in October 2017. The combined value of Australian dwellings hit $7.9 trillion dollars over the month, according to CoreLogic. This cements residential property as an extremely large and important asset class.

Comparing current capital city values with previous peaks adds some perspective to the current upswing – particularly in Perth and Darwin, where values remain substantially below their record highs from 2014. It also highlights the very different dynamics across capital cities – such as in the ACT, where dwelling values have hit a new record high every month for 19 months.

The following charts plot the change in capital city dwelling values from previous peaks, and the number of months it has taken for values to surpass the previous peak. The subsequent downturn and recovery trends vary, and are unpacked below.  
 

 

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<h2>Sydney</h2>

Sydney dwelling values took 44 months to reach a new record high value. While values have lifted a relatively high 8.1% since the COVID-induced decline (which bottomed out in September 2020), the total value of the dwelling market is actually only 2.6% higher than the previous peak, which was in July of 2017. 

In 2017, a property price downturn was likely catalysed by changes to lending conditions. Cash rate reductions, along with a relaxation in borrower serviceability assessment rules, spurred the start of a recovery trend through 2019. COVID-19 interrupted this upswing, but a recovery in economic conditions, and increased consumer confidence, has pushed values above the previous peak.  
 

<h2>Melbourne</h2>

Melbourne dwelling values reached a peak in March 2020, after staging a recovery from the earlier 11.1% drop in values between late 2017 and mid-2019. However, the Melbourne housing market was the most impacted of any capital city by COVID-19, due to extended social distancing restrictions through 2020, and a particularly high exposure to overseas migration as a source of housing demand.  Closed borders created a negative shock, with a more significant and direct impact on inner city rental demand. Since bottoming out in October 2020, as stage 4 lockdowns began to ease, Melbourne dwelling values have climbed 0.7% above the pre-COVID high. 

As the value of Melbourne housing nudges over its previous peak, it is worth noting the market has not recovered evenly. House values remain -1.8% below the previous November 2017 high due to a larger correction through the recent downturns. Within different price segments, there is also variation. As of March, the ‘high’ end of the market (measured as the top 25% of values in Melbourne) was still -4.0% below its record high, which was in October 2017. Meanwhile, low and middle tier values have increased beyond their pre-COVID highs by 4.9% and 2.2% respectively, reflecting a smaller decline turn recent downturns, as well as strong demand from first home buyers who typically target properties around the middle-to-lower end of the market.  
 

<h2>Brisbane</h2>

Brisbane dwelling values are sitting 6.5% above the previous peak, which was in April 2020. Market values saw a peak-to-trough decline of -0.9% through COVID-19. The decline lasted just 4 months, before Brisbane dwelling values recovered to a new record high by October 2020.

As with Melbourne, the recovery in the Brisbane market has been varied. While house values climbed 7.6% above the previous peak through March, which was reached in May of 2020, unit values remain -9.4% below the record high value, which was in March 2010.  Brisbane unit values are currently at similar levels as October 2007, reflecting a very affordable entry point to the market.

The weaker conditions across the unit sector are likely due to previously high levels of unit completions keeping values subdued, particularly in the later part of the 2010s. ABS dwelling completion data saw unit completions across Queensland rise 50.4% in the 5 years to September 2020, compared with a 17.4% uplift in house completions. However, strong internal migration flows to south-east Queensland, as well as other tailwinds for housing demand more broadly, has supported 5 consecutive months of growth in Brisbane unit values since November 2020. 
 

<h2>Adelaide</h2>

The Adelaide dwelling market was one of the least affected through COVID-19 in terms of values. Following a -0.2% dip from the previous high in May 2020, values had surpassed the previous peak by September last year. The rate of change in dwelling values jumped to a monthly increase of 1.5% over March 2021, which is the highest monthly growth rate seen across the city since December 2007. Both house and unit values across Adelaide are currently sitting at a record high. Although housing values are reaching new highs each month, relative to the larger capital cities, Adelaide housing values remain low. 
 

<h2>Perth</h2>

The CoreLogic home value index for Perth shows values -15.9% below the record high, which was in June 2014. The peak-to-trough decline, which was induced by the rapid withdrawal of mining investment, employment opportunity and migration, lasted around 67 months. As the market started to recover in mid-2019, COVID-19 created an additional, negative shock, which pushed values down a further -2.2% between April and July of 2020. However, the Perth dwelling market has seen consecutive increases in value for the past 8 months. For the past 5 months, value increases have exceeded 1% a month, which is a strong growth rate and signals the start of what may be a sustained and rapid recovery. This coincides with rising interstate migration levels to Western Australia, and projected increases in already rising mining investment. Hobart

Hobart has seen the second-highest uplift in housing values from the previous peak, at 12.3%. The previous peak in dwelling values was at February 2020, before a brief, COVID-induced decline in total dwelling values of just -0.3%. Hobart dwelling values have seen extraordinarily strong growth, with the annualised capital growth return sitting at 9.4% for a 5 year period (+56.3% over the past five years). ABS building activity data suggests house commencements were 32.8% above the decade average through the September 2020 quarter in Tasmania. Combined with affordability constraints, additional stock should work to ease growth rates across the region in the coming months.  
 

<h2>Darwin</h2>

Darwin dwelling values are the furthest from the previous peak of the capital city markets. A record high was reached across Darwin dwellings in May 2014. Similar to Perth, a decline in the resources related infrastructure sector saw a substantial decline in housing values, with the peak-to-trough fall extending to February 2020, at -32.7%. Since February 2020 however, Darwin dwelling values have increased 16.5% through to March 2021 which is the fastest growth rate amongst the capitals. This leaves values -21.6% below the record high, and shows the Darwin dwelling market firmly in a recovery trend.   
 

<h2>ACT</h2>

ACT dwelling values at the end of March were 16.9% higher than the previous peak, which was in April 2019. Following a -1.5% peak-to-trough decline, ACT dwelling values had recovered by September 2019, and have hit a new record high each month since. Rapid dwelling value growth across the capital has largely been driven by house values, which are 19.7% above the previous high in April 2019, compared with a 7.2% uplift in unit values since the previous high. Part of the strength in ACT dwelling value returns have been due to relatively high incomes across the Territory, along with resilient labour market performance through COVID-19. However, the fact that dwelling values have surged almost 17% in less than two years, highlights an increasing barrier to ownership for future first home buyer cohorts. 

 

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See more: Properties ideal for investors

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The combined value of Australian dwellings hit $7.9 trillion dollars over the month, according to CoreLogic, cementing residential property as an extremely important asset class

How do dwelling values compare with previous highs? Eliza Owen

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Expert Observer

City-based investors are making schoolboy errors amid the frenzy that pervades many property markets across Australia.

They’re selecting regional properties recklessly, they’re committing without proper due diligence and often they’re paying way too much.

“Buy in haste, repent at leisure” will become the catchcry for many investors in the future.

Much of what’s happening in this national property boom arises from the fundamental failing of most Australians who attempt property investment: they’re herd animals.

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The relatively few who are switched on were buying six or nine months ago. What’s happening now in our property markets was foreseeable and it was predicted by Hotspotting and by others who truly understand real estate dynamics, like Simon Pressley of Propertyology.

Investors who make it their business to stay informed, who have built a team of trusted advisers and who are research-based in their decision-making were in the market well ahead of the rampaging pack.

But they’re the exceptions. Most simply follow the herd. They’re in the market now, or trying to be, because they heard there’s a boom on. 

They haven’t done any work or thought too deeply about it, they’ve simply joined the stampede.

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Right now, it feels like you could stick a map of Australian on the wall, throw a dart at it, buy wherever it lands - and make money in the next 6-12 months.

But what about the longer term? Does the location of choice have the credentials to provide sustainable long-term growth? Even in rapidly-rising markets, you need to make good choices about location.

Having picked a random location, many are buying sight-unseen and not applying the usual checks and balances. They’re viewing a property online, making a phone call and buying on the spot.

They say the camera doesn’t lie, but the person wielding the camera or the computer software often does. And what about building and pest inspections?

To complete the trifecta of colossal mistakes, buyers are often paying above market value. They think they’re getting a bargain because they’re a city resident buying in a regional area and the target properties appear cheap.

I had a recent conversation with a Sydney resident about the market in a Queensland regional centre where typical houses cost in the $300,000s. He went online while we were speaking and looked at properties for sale. His reaction: “Wow, that’s really cheap!” He was ready to buy on the spot.

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But while the homes he viewed may have seemed cheap relative to Sydney, they may well have been over-priced in terms of local values. Many vendors are asking silly prices because they’ve heard that many buyers are doing silly things.

As a result of this kind of activity, median prices are rising rapidly – and local buyers are complaining because they’re being priced out of their own markets by buyers from the big cities.

Everyone involved in the process, except perhaps vendors, would prefer more normal markets. But what we have are abnormal conditions, created by a series of events and circumstances which have been building over the past 6-9 months.

It’s not about the low level of interest rates, it’s being generated by the economic and other circumstances which I discussed in this column four weeks ago – 16 dot points on my list of factors generating Australia’s first genuine nationwide property boom in 20 years. 

But fast-rising prices may not cover the mistakes that many investors are currently making.

Terry Ryder is the founder of hotspotting.com.au

ryder@hotspotting.com.au

twitter.com/hotspotting
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They’re selecting regional properties recklessly, they’re committing without proper due diligence and often they’re paying way too much.

terryryder

City-based investors making schoolboy errors in regional investments: Hotspotting's Terry Ryder

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It’s a great time to be a landlord in Australia. With rare exceptions, vacancies are ultra low, rents are rising and there’s massive momentum behind prices.

A nationwide property boom is under way (with the big city inner-ring unit markets the exception) and the curious thing is that investors haven’t been joining the party. 

The growth we saw in most markets in 2020 was driven by owner-occupiers, with first-home buyers leading the charge and other home buyers, especially lifestyle-seekers, prominent as well.

Investors were sitting on the fence, worried firstly about the September Cliff which failed to materialise and now apparently concerned about a potential March Cliff.

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They’ve been waiting to see what would happen, before making decisions. And here’s what has happened while they’ve been fence-sitting – the new data from Domain shows that all capital cities had house price growth ranging from solid to strong in 2020, as did most of regional Australia. There was particularly notable uplift in the December Quarter.

This confirms earlier data from CoreLogic and both confirm the anecdotal evidence from the coal-face of markets which shows properties receiving multiple offers and selling for more than the asking prices, often before being formally listed.

Other research shows that rents have been rising in many parts of Australia, on the back of vacancy rates so low that it constitutes a national rental crisis.

So the hesitant investors have missed the first phase of the national property boom.

If they’d bought a year ago in many parts of Australia, their properties would now be worth 10%, 15% or 20% more than they paid.

For those who bought in sexy lifestyle locations like Byron Bay and the upmarket areas of the Sunshine Coast, a $1 million investment a year ago would now be worth around $1.3 million.

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If you’d bought a $400,000 property in Bendigo 12 months ago, it would likely now be worth around $460,000 (based on the median price data).

So it’s time for investors to stop procrastinating and get busy. And the latest ABS data on loans indicates that, at last, investors are starting to get involved.

This, in fact, is typical investor behaviour. Investors don’t lead property cycles, they react to them. They stampede into the market when they hear there’s a boom happening.

So I expect a big surge of activity from investors in 2021. There are too many good reasons to become buyers of well-located real estate and make it available to a hungry rental market.

The uplift in investor buyers will add further energy to the momentum already happening in markets across the nation.

It will make a national property boom that much more certain.

Terry Ryder is the founder of hotspotting.com.au

ryder@hotspotting.com.au

twitter.com/hotspotting
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The hesitant investors have missed the first phase of the national property boom.



It’s time for real estate investors to stop procrastinating and get busy: Hotspotting's Terry Ryder

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A fractional property investment platform providing access to US real estate investments, has announced its official global launch.
RealT provides investors, regardless of their location, to become landlords in Detroit.
In the future, RealT plans to include properties from across the United States and the world.
RealT’s platform utilises blockchain technology for property ownership and rental income distribution.
Investors are provided with RealTokens that represent ownership in each property, while rental income is paid daily using USD stablecoins.
Real estate cannot be directly tokenized in the United States, so each of the properties featured on RealT is officially owned by a Series of a Delaware series limited liability corporation (LLC).
RealT issues a specific number of tokens for each Series, which are then made available for purchase by investors.
"Up until now, investing in real estate has been a laborious and expensive process," Rémy Jacobson, CEO of RealT said.
"Entry costs are high, the required documentation is complex and the assets are illiquid.
"The industry is ready for change.
"That’s why we are convinced that now is the time to make it easier for people to invest in US real estate."
Each property has a dedicated property management team that is in charge of the property on behalf of the owners.
Collecting rent, sourcing tenants and managing repairs are all taken care of by the team.
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