What does the current Australian landscape look like for property investors?
Experienced property investors often look at the current conditions surrounding the market before making any decisions regarding where and what to buy. Australians are screaming "buy my house!" from a growing number of street corner signs, so it pays to have a level voice from a Cohen Handler buyer's agent on hand to clear up some of the confusing statistics.
Even the most knowledgeable property investors can walk into a property-buying negotiation with greater confidence if there is a buyer's agent alongside them. But what is the state of the current market? CoreLogic RP Data's Pain and Gain Report for December 2015 details the lay of the land.
Whereabouts is the property market pain?
Investors will be thankful to read that the capital cities aren't being dramatically affected by the current economy, in both houses and units. CoreLogic RP Data rates pain as the percentage of properties that resell for a loss. There is only a 4.7 per cent pain factor in house prices across the eight capital cities, while units fare a little worse at 7.9 per cent.
There is only a 4.7 per cent pain factor in house prices across the eight capital cities, while units fare a little worse at 7.9 per cent.
There are some serious outliers in those figures, however. Perth is sitting at 11.7 per cent, which is the highest, and Darwin comes close at 11.4 per cent. Sydney and Melbourne appear to be strong in the house market, with a 2 per cent and 2.5 per cent pain rating respectively.
On the other hand, the Sydney unit market is the only one to experience reasonably low pain ratings at 1.7 per cent. Melbourne is the next closest but is significantly higher at 8 per cent, while Perth lies well at the bottom of the pack at 23.1 per cent. Clearly, the recent market conditions have been unkind to our neighbours on the West Coast, but Sydney results show much more manageable investing opportunities on the east.
On the other side of the pain is that gain. Where a region has a low percentage for pain when it comes to resales, it must have a high percentage of capital gains. That's definitely the case for Sydney in both the house and unit markets, which sit at 98 per cent and 98.3 per cent. That's fantastic news for anyone with an eye to take advantage of the current Australian property market and really push for buying properties that will result in a positive resale result down the track. A specialist buyer's agent from Sydney has the nous for knowing which suburbs will be the most beneficial for capital gains.
What should investors be looking for?
According to a Jones Lang LaSalle report, the number of Sydney apartments that sold throughout 2015 is staggering – 36,130. That's in Sydney alone, where 98.3 per cent of resales made gains.
Units are clearly being snapped up left, right and centre. Taking a look at a suburb such as Rushcutters Bay, for example, gives you an insight into why this isn't a surprise. Smart Property Investment lists this inner-ring region as among the top 10 for growth around the whole state of New South Wales. Over the past 12 months, units have experienced a 46.6 per cent increase in median price, which is equivalent to the growth it has experienced over the past five years! Clearly, growth is ingrained into this suburb, and buying a unit here puts you in the drivers seat for making the most of potential capital gains.
Rushcutters Bay units have a median price of just $755,000, which is a steal for inner-ring Sydney residences.
Does that scream investment opportunity to you? If it does, get in touch with the team here at Cohen Handler. A Sydney buyer's agent will be able to steer you in the right direction so your property doesn't end up in the 'pain' section of any reports in the future.