With the market on fire and interest rates rising, investors are looking to get their hands on property investments.
Here’s what to look for.
If you want to buy your first home, then here’s what you need to know about the property market.
First, where are you going to invest your money?
According to a study by Mortgage Bankers Association (MBA), property investors are more likely to look to Australia’s main cities and regional areas.
These are known as “hot spots” for property investing, with the top three areas of investment activity for property investors across the country accounting for 51 per cent of all new investment activity in the country in the first half of 2018.
The top five areas in terms of new investment are Melbourne (27 per cent), Sydney (16 per cent) and Adelaide (11 per cent).
The top ten areas for the number of new homes being built are:Queensland (6 per cent); Victoria (6.7 per cent; Brisbane) (4.6 per the) (5 per cent in)Western Australia (3.7 in); Tasmania (2.5 in); South Australia (2 in); and Tasmania (1.7)The top 10 regions for new homes are:New South Wales (8 per cent, the top 10); Victoria; Queensland; South Australia; Tasmania; and Western Australia (8).
The most popular places to invest are in inner-city areas.
“It’s important to recognise that inner-urban areas are also the places where the biggest returns are being made in the property markets,” said Dr Mark Mather, chief executive officer of mortgage brokerage firm MoneyTree.
“If you’re an investor in Melbourne, you’re looking at a $500,000 property investment per year, compared to $50,000 per year for investors in Sydney, Sydney and Brisbane.”
The top-performing areas in Australia’s inner-cities are:Melbourne (5.8 per per cent (and 2.9 per cent per cent for Melbourne), the top two), Sydney and Melbourne; Brisbane; Perth; Adelaide; Adelaide (and 3.4 per cent each); and Hobart (2 per cent and 1 per cent respectively).
While inner-metropolitan investors are investing more heavily in the Sydney region, the biggest gains in property values are being experienced in Sydney and Sydney-based suburbs like Gold Coast (2,000 to 3,000).
In the outer-metropolis of Melbourne, new investment is taking place in the outer inner suburbs.
“Investment is happening in the suburbs, but it’s also taking place around the outer outer inner city,” said Ms Lohman.
The next five areas that have the highest average new home investment per capita is:Quebec (12.6, the next five), New South Wales, Victoria, Western Australia and Tasmania.
“I think there’s been a bit of an appreciation in the inner city in particular as the population density has gone up and the property prices have gone up, so it’s been hard to get your foot in the door,” she said.
“But the outer suburbs have done well, they’ve gone up in value and they’re now seeing the big returns.”