Buying property is becoming cheaper than renting in many suburbs across Australia, new research has found.There are always going to be areas or suburbs that are more desirable to live in. However good you are linked with transport, no one wants to suffer an long commute to work.
John Edwards, chief executive of Residex, recently said that he’d made $60,000 in six weeks – on a flat he’d bought for $300,000. The trick is to go for the upper end of the first time buyer’s market- which is less saturated than the lower end – and find a flat that needs a bit of work.
Edwards thinks now is the time to make a “quick kill” – with more growth to be carved out of the property market over the next two years. After that, the period of good growth will be over and the market will settle back, he said.
Home Property investment pays
According to property pricing specialist RP Data research, which was commissioned by Commonwealth Bank of Australia, there are 94 suburbs across Australia where the monthly cost of rental outstrips the monthly mortgage repayment on both houses and units.
Tim Law
less, national research director at RP Data, says there will always be isolated examples of people making a quick buck through the “pick and flick” strategy.
Edwards says there are obvious things to look for when picking out an investment property: is there evidence of new infrastructure or developments, or has everything been built and already sold? How close is the property to local schools and transport links?
Residex data shows that the gap between money made on flats and houses has narrowed in Sydney. Apartment prices have historically returned growth of 1 percent to 1.5 percent a year, less than houses and land. But last year in Sydney, the housing market saw average returns of 0.79 percent, while units jumped 4 percent in value.
Right Time for investors in property market
Property prices are expected to continue to rise across Australia – by as much as 10 percent over the next year some experts say. The government’s grant for first time buyers has boosted prices at the lower end of the market – and investors are expected to pick up the slack when the grant winds down on September 30.
All this is bad news for anyone with stretched affordability, but I’m told it’s great news for investors with cash to splash – ie speculators.
