IS now a good time to be a property investor?
According to Ray White Chief Economist Nerida Conisbee, if you take a look at Australian Bureau of Statistics finance data, it certainly seems investors are particularly buoyant right now and the increase in new loan commitments has been particularly rapid.“In May 2020, investor lending hit its lowest level ever recorded, plunging even further from the low levels recorded during the Financial Services Royal Commission,” Ms Conisbee said.“At this time, there were a lot of troubling conditions for investors - prices were falling, rents were falling and there was a six month eviction freeze for tenants. Investing in housing didn’t seem like a particularly good idea.”House prices, of course, turned around very quickly, rents began to recover and Ms Conisbee said we are now in a situation where investing in housing is again in favour.Across Australia, prices have jumped 13.5 per cent and rents are up 6.6 per cent. There are only 59 suburbs (1.2 per cent of suburbs with house medians) that are recording house price declines and only 26 suburbs (1.4 per cent of suburbs with unit medians) that are recording unit price declines.Also in favour for investors, are the same conditions that have been driving owner occupiers. Ms Conisbee said this includes very low interest rates, relatively easy access to finance and high savings rates.“Investor lending is now 9.4 per cent below the 2014 peak but has more than doubled over the past 12 months,” she said.“While Australian investors are back, the same can not be said for offshore investors who were such major drivers of new development in the last investment surge between 2014 and 2016.“Similarly, the types of purchases that investors are making seem to be different. High density off the plan developments are not as popular, instead replaced by outer suburban and regional areas.“What is consistent however is that investors are targeting capital growth, as opposed to rental yield. While prices have increased significantly, yields are now at record lows as prices continue to outpace rents.”Meanwhile in the auction space, the Ray White Group recorded a strong first week of August with an 81 per cent clearance rate across the country and 6.9 bidders on average either tuning in or attending an auction nationally while average active bidders were also high at 3.6.
This weekend, there will be a mix of online and onsite auctions happening around Australia depending on the level of restrictions but the one thing all cities will all have in common is that Saturday is shaping up well with 292 auctions scheduled nationally and several stand outs that are not to be missed.
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In Sydney, Ray White members across the city still have the ability to conduct private inspections and online auctions meaning buyer numbers remain unaffected. In fact, last week average registered bidders came in at 7.7 while active bidders came in at 3.5 per auction on average.This Saturday, those buyers who missed out last week will have another chance to claim their dream home including those eager to secure themselves a home on Drummoyne’s sought-after Burnell Street.Ray White Drummoyne agent Chris Wilkins will be taking 5 Burnell Street (pictured above) to an online auction later this week to a host of virtual bidders who all see the property as an opportunity to buy into an amazing location. With views across the city and a double street front, Mr Wilkins said it has been popular with family buyers.“There’s been a lot of activity on this strip recently. Properties have been selling in the multi-millions and buyers are seeing this as a great way to get their foot into the growing market,” Mr Wilkins said.In the south-eastern Sydney suburbs, buyers of a different kind are showing a lot of interest in 6 Canara Ave, Phillip Bay which will go to an online auction on Saturday. Selling agents Phillip and Eden Elmowy of Ray White Maroubra | South Coogee said there has been a mix of buyers looking at the 474sqm corner block, with some wanting to renovate the home and others wanting to knock it down and start their own project.There will also be some auction action for Sydney’s western suburbs. No. 7 Chesham St, St Marys will go under the virtual hammer this weekend after attracting almost 100 enquiries over the course of the shortened three week campaign. Ray White Mt Druitt principal Wiltar Jajaw said he’s not been disappointed by the level of interest.“The property has received a lot of interest from investors and even a couple of developers because of its R4 High Density zoning and almost 700sqm block,” Mr Jajaw said.
In Melbourne lockdown will extend to this weekend meaning all auctions will again be online. But after rolling lockdowns over the past 18 months, buyers are no longer phased by the virtual sales method.This weekend, Ray White Ringwood agent James Grosso has transitioned the auction of 6/25 Arlington Street online, with office director Chris Watson conducting it from his living room.Mr Grosso said despite only getting two weeks to oversee inspections, he is confident with the amount of interest the property has received.“I have had interest coming from a range of different buyer pools including first home buyers, investors and downsizers but all are very keen to throw their hat in the ring this weekend so I am expecting a great result,” Mr Grosso said.In the northern suburbs, the auction campaign for 15 Snaefell Cres, Gladstone Park (pictured above) has now gone through two lockdowns. But Ray White Gladstone Park director Phillip Mercieca found there was no shortage of buyers ready to inspect the property in between the lockdown periods.“The vendors need to sell so they can purchase and I am confident about the amount of interest we have received, mainly from first home buyers. So despite the two lockdowns during the campaign we are taking it to an online auction this weekend and it’s shaping up well,” Mr Mercieca said.
In Brisbane, auctions are back onsite after last week’s lockdown but with some restrictions and this weekend it’s looking like buyers are ready to make up for lost time.In Zillmere, Ray White Ascot agent Penny Johnson will be auctioning 11 Kilpatrick Street after running the campaign through the recent lockdown. During that time, Ms Johnson needed to master several digital platforms including Whatsapp and Google Hangouts to conduct virtual inspections with buyers. Outside of the lockdown period, she completed almost 60 inspections and received more than 100 email and phone enquiries which she is confident will translate to a great auction.Moving up to northern Queensland, Ray White Whitsunday agent Steve Marks is also expecting a strong auction on a half renovated home at 11 Hillcrest Ave, Airlie Beach (pictured above). Mr Marks said he’s had 120 enquiries from buyers and completed 60 inspections of the home.“I have been overwhelmed with the volume of enquiry coming in. There is a lot of southern interest because everyone wants a spot up here - especially in such a sought after position within walking distance of the lagoon,” Mr Marks said.“The renovation has been half finished and now there is opportunity for someone else to come along and finish the dream.”
Adelaide auctions are now also back onsite but with restrictions this weekend. Highlights from South Australia’s capital this Saturday include Ray White Tea Tree Gully principal Sam Doman’s grandmother’s house at 47 Watson Ave, Rose Park (pictured above).Rose Park is one of Burnside’s most intact historical 19th century suburbs full of 1800’s villas and cottages. With substantial avenues, trees and gardens, rear lane access to properties like 47 Watson Avenue are not out of character for the historic Rose Park.Mr Doman said in 1961 his grandmother, Shirley Miller paid for a monthly raffle until her number came up enabling her to purchase the Rose Park home.“Imagine a section of land, once known as section 262, originally a dairy and wheat farm only 1km out from the city centre as being ‘undesirable’. Rose Park is now full of million dollar properties, but was once unlikely to cater to the wealthy,” Mr Domain said.“I know my family is sad at letting it go but someone will be very lucky to purchase a property within such close proximity to the city and great bones.“We are looking forward to seeing the result of the auction this weekend. The current real estate market is so strong, we are looking forward to seeing the fall of the hammer. I know that Nan will be happy to secure her daughters' futures with the sale.”Meanwhile, retired teachers and orchardists David and Anne Lymn will be welcoming new owners to their 22 Royal Ave, Burnside home after this Saturday’s auction through Ray White Norwood agent Brandon Pilgrim.
The couple built the home 15 years ago after moving from Mount Gambier's Apple Farm. The home was designed by architect David Chapman to make the most of the sloping block and incorporate beautifully designed gardens filled with fruit trees.
Mr Pilgrim said the home has been popular with a range of buyers looking for something different.“There’s been interest from families and people downsizing from large farms who aren’t ready to move into something smaller,” Mr Pilgrim said.“It’s also attracted multi-generational families because there is a self-contained unit at the back as well as quite a lot of interstate interest.”There’s also something on offer for investors and developers in Adelaide this Saturday as 23 Gibson St, West Beach goes under the hammer through Ray White Henley Beach principal Anthony Fahey.Mr Fahey said the current vendors are looking to capitalise on the hot market while buyers have been varied and are planning to either subdivide the block, use it as a landbank or knock it over to build their dream home.
