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Middle-priced housing sector is most responsive

987804_bar_graphHome values for dwellings (attached and semi-attached homes) reported a leap of 2.8% over the March quarter. Michael Yardney for Property Update suggests how each area has done well, with Perth showing highest growth and every capital city, except Adelaide, contributing to the total sum. Middle-priced housing sector is exhibiting maximum response, posting a hike of 1.6% in value of home dwellings. Contrarily, the lowest-priced and the highest-priced end of the spectrum have displayed a fall of 0.9% and 0.6% respectively.

Between the owner-occupied homes and investment homes, the latter is showing a lot more responsiveness to the prevailing interest-rates (as low as they come). Data mortgage reports and capital gains signals are also sending an optimistic wave for the property market. Read the full article here.

Do you think that the capital gains (4.7%) reported for 2.8 % market leap may be an exception to the rule? I invite your opinion.

Mixing Macro and Micro for Property Investment

property investmentThe Australian property market is currently in a very stable phase. While there is no recession or bust phase in sight, it will be fruitful to learn the right ways of making profits in today’s market. Pete Wargent for Property Update suggests how it may not be the best idea to buy property in your own backyard.

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Subdividing vs Renovating – Which Is More Profitable?

homesMark Armstrong busts a real estate myth while reporting for Property Observer. In his article, he discusses how Subdividing may not be the most profitable way to go. Property owners hold two opposite ideas equally dear when they are looking to sell their properties. One such idea is Home Staging wherein they revamp their existing homes, upscale it a little, give a few finishing touches and seek better prices for their appraised properties.

Property owners sometimes take a diametrically opposite route and demolish their properties to create two separate units on the site. If you stick to traditional notions, you may feel that two units can be sold for a higher price than one- right? So is there a catch? Well! Plenty to be precise!

To begin, there is a cost involved in demolishing the existing home and leveling the site. There is a price tag attached to council permits. Add to this the fee of the architect or the draftsman who prepares the blueprint for the new units. You cannot overlook the cost of labor and raw materials (it may include an exigency or a sudden surcharge). One has to duly consider the amount of interest on loan (required for reconstruction) and rental fee (for the time you do not have a place to live in).

Next in line is the cost involved in marketing your property, appraisal fee, agent’s cut and the capital gains tax. If you now look at it, subdividing might not seem to be a viable option anymore. Well! It still can be but it is your duty to make an informed decision.

Which one between the two would you typically choose? I invite your opinion.

Darlinghurst is the best performing Sydney suburb for 2012

DarlinghurstDarlinghurst, the cosmopolitan enclave in Inner Sydney, is the top performer amongst Sydney suburbs for 2012. For 53 properties sold in the year gone by, Darlinghurst picked up a median price of $1.057 million. This complimented with a 21.2% increase in the house prices, is certainly a news to cheer, says Glenn Dwyer in an article written for the Property Observer.

This is actually a super performance considering that the Inner city Sydney market has not shown any growth in 2012. A few sales worth noting:

  • A four-bedroom terrace on Surrey Street sold for $1.59 million
  • A five-bedroom Darlinghurst terrace on Liverpool sold for $2.275 million
  • A four-bedroom house on Palmer Street sold for $1.275 million

Situated only 3.2 kilometers away from the CBD, it allows residents to experiment with a café lifestyle. This along with the powerful culture of the place is the major reason why Darlinghurst is doing so well.

On the heels of Darlinghurst comes Woodcroft and West Pennant Hill. In terms of percentage increase in prices, North Curl Curl is at number seven. However, it has done better than Darlinghurst in terms of median Price (and has produced 17 sales more than Darlinghurst)

 

Fewer homes selling at a loss

homesThe latest housing data shows a positive trend for Australian homes – fewer properties are selling at a loss.

It is an interesting upward trend especially after a dubious quarter (July 2012-Sep 2012) where 13.5% of homes sold at a loss while only 30.9 % of homes sold at prices two times more than the purchase price. Over the last quarter, the number of homes selling at a loss has come down to 12.5% while those sold at more than double the purchase price has appreciated to 32.1%. The trend is visible across all of Australia.

Properties on or near coastal areas have suffered the most while those close to resource and mining sectors have seen minimal losses. It is also worth noting that the financial crisis is not the only reason why homes are being sold at a loss. Many people are doing so because it allows them to buy another property (where appreciation can be very high in the near future) at a throwaway price.

Read the full article here.

Are you planning to invest in a property this quarter?

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