Archive for April, 2009

Increasing rents boosted the housing component of the Consumer Price Index (CPI) by   0.9 per cent for the quarter and the overall annual increase to 5.5 per cent, that’s according to  Australian Bureau of Statistics figures released this week.

The CEO of Real Estate Institute of Australia has said, “The majority of this increase in the housing component was driven by rents, which increased nationally by 1.7 per cent over the quarter and 8.4 per cent over the year. The cities where rents increased the most were Perth and Darwin with annual increases of 10.9 per cent and 13.5 per cent respectively!”

This rent increase in the recent quarter reflects low vacancy rates and the scarcity of rental properties across capital cities, combined with the decrease in building approvals and housing finance for investment.

The National Rental Affordability Scheme should hopefully relieve this figure, however the impact won’t be felt for quite some time.

“With an underlying demand for additional housing at around 200,000 dwellings per year and commencement of new dwellings of 147,000 in 2008, Australia will need to build significantly more homes than what has occurred to meet the rental demand.”

Housing affordability improved since the Reserve Bank rate cuts, although there’s really been very little   flow-on benefit to those in the rental market.

“With lower interest rates and greater affordability, now would be the time for those within the rental market to seriously consider purchasing their own home.”

The rich list has been announced and the top performers for both houses and units were areas of NSW.

RP Data recently released its top price growth suburbs, recording the greatest increase in median house and unit prices during the 12 months to December 2008.

North Sydney suburbs were the standout performers for both houses and units with median house prices appreciating 47.4 per cent in McMahons Point and unit prices growing 49.8 per cent in Greenwich.

The NSW list comprised mainly areas outside of Sydney including Dubbo, Jindabyne, Queanbeyan East and Brunswick Heads.

Victoria was a different story with just one area outside of the metro area making the list. Irymple in Mildura was the regional victor experiencing a median unit price increase of 35.3 per cent.

The Victorian results mainly comprise of areas in the Melbourne Statistical Division with both the top performers – Portsea’s median house price increase was 38.6 per cent to $1,455,000 and Dallas’ median unit priced leaped to $222,500, that’s an increase of 48.3 per cent!!

The QLD market showed many areas outside of the Brisbane area as strong performers in capital growth.

Their state’s top performers are houses in River Heads at Hervey Bay with prices increasing 43.1 per cent and units in North Lakes increasing by 47.3 per cent.

South Australia’s winners are dominated by areas of Adelaide with only Port Hughes, Roseworthy and Owen outside of the capital city location.

The standout performers for houses is Teringie (49.5 per cent) and for units Underdale (47.8 per cent).

The strong growth results around Adelaide aren’t a surprise given that it remains mainland Australia’s most affordable capital city market and has been an excellent performer throughout 2008.

Perth dominated the WA list. Which is surprising given the poor performance overall of the Perth market during the last 12 to 18 months.

Homes in Coolbinia stood out, with a median price increase of 43.1 per cent. Units, the port side suburb of South Hedland saw the greatest increase jumping 44.4 per cent to $455,000.

Outside Perth, the list is exclusively populated by areas linked to the mining and resources sector.

For Tassie, the top performer for houses is Campania, recording a 46.3 per cent growth, and units saw Hobart taking top spot with 35.7 per cent!

Northern Territory winners are almost entirely located within Darwin, with Virginia recording the strongest growth in houses (30.9 per cent) and The Gardens topping the list in units (39.0 per cent).

Throughout ACT, the strongest performing suburbs were within close proximity to the city centre – Franklin’s houses recorded a 25.6 per cent increase and Campbell’s units 49.7 per cent!

Victoria

Houses

Units

Buying properties within 10km of capital cities is generally a good investment, but where ARE these affordable areas?

There’s some suburbs within 5km of capital city centres where the median unit price is $200,000 and the gross rental yield 5.33%?

You don’t have to buy far from the city centre to pick up a bargain!

And it’s not a bad strategy for identifying best value properties to find ones located in affordable suburbs within a 10 kilometre radius of the city!

For some cities, the inner circle can be more or less, depending on the size of the city, however, generally it’s a good rule of thumb because it’s these areas that are more likely well serviced by transport, have social and retail amenities close by AND benefit from strong rental demand!

Below are the five most affordable suburbs for houses and units within a 5kay radius of Melbourne City.

Melbourne - houses

Melbourne - units