Invest
Things you need to know before you buy as markets head for 10% price growth
Invest
Things you need to know before you buy as markets head for 10% price growth
Median house prices across all markets are poised for a 10 per cent increase in 2021, an economist has said.
Things you need to know before you buy as markets head for 10% price growth
Median house prices across all markets are poised for a 10 per cent increase in 2021, an economist has said.
With the market poised for a price growth of 10 per cent in 2021 alone, Dr Andrew Wilson, the chief economist at Archista, advised new market entrants to take a “scientific approach” to property buying.
Speaking on a recent episode of The Smart Property Investment Show, Dr Wilson explained that seeking out properties with higher yields should be the starting point for all first property buyers.
“Yield is a good guiding point for investors, looking for the higher yields.
“Seek out properties with higher yields. Typically, they are more affordable and have higher entry points,” Dr Wilson said.
He admitted to being bullish about the Brisbane market, where yields on apartments are hitting 6 per cent.
“That tells me that prices will rise,” Dr Wilson said.
Next, he advised to “look at the correlating factors”, such as the number of vacant rentals, the actual rental movements in recent periods and the vacancy rate.
“I think you can create a simple model, then, in terms of opportunities, and then you just sift through and do some more on the ground homework, in terms of local economic performance.
“You need to take a scientific approach to this rather than just throw a dart at the dartboard,” Dr Wilson said.
Other factors to calculate into your “simple model”, Dr Wilson said, are days on market and the actual price of the property.
But finance shouldn’t be left by the wayside.
“Investors need to get the finance right, and that’s really been the struggle. Do your homework and get your finance right,” Dr Wilson noted.
According to recent data from My Housing Market, the number of national newly reported homes sales over the week ending 7 February surged by 17.2 per cent compared with the previous week’s total.
Most capitals recorded increases, with Sydney leading the bunch with growth of 46.9 per cent, followed by Melbourne at 32.7 per cent, Brisbane at 19.5 per cent and Adelaide at 0.5 per cent.
Meanwhile, national newly reported sales over 2021 soared 33.6 per cent on the year, with Sydney once again at the top of the ladder with growth of 46.9 per cent, followed by Melbourne, 32.7 per cent; Brisbane, 19.5 per cent; and Adelaide, up 0.5 per cent.
Mr Wilson predicted the growth trend will continue.
“The prospect of sharp increases in home sales activity over coming weeks will continue to place upward pressure on house prices, reflecting strong ongoing competition among buyers for available properties,” Dr Wilson said.
For more advice on how to make your first purchase, listen to The Smart Property Investment Show.
About the author
About the author
Property
Why it now costs 130% more to service a mortgage than 3 decades ago
The lifetime cost of owning a home has increased by over 130 per cent in just three decades, new research has revealed. ...Read more
Property
Using the 30/30/3 rule for home buying during uncertain times
Thinking of buying a home? Uncertain economic times may have you double guessing your purchase, but the 30/30/3 rule can help you make this a reality. ...Read more
Property
Rental yields reach decade high, but not all markets move at the same pace
Changing consumer preferences towards lifestyle destinations and a lack of supply have led to record national price growth, albeit price fluctuations vary region-to-region, fresh figures show. ...Read more
Property
What younger Australians are getting wrong about home loans
As young Australians look to fight the odds and take their first step onto the property ladder, more and more are making easy mistakes. ...Read more
Property
More than 1 in 3 Aussie properties are cheaper to buy than rent
Having a mortgage is even more likely to be cheaper than renting than it was pre-pandemic, new research has revealed. ...Read more
Property
How will the moratorium on evictions impact landlords and tenants?
The NSW government has announced a 60-day moratorium on evictions, with landlords gifted incentives to reduce the burden on COVID-19-affected tenants. ...Read more
Property
Young renters cry out against ‘lack of respect’ in rental market
Young Australians have expressed dismay over the perceived discrimination within the rental market as the wealth divide forces them into long-term renting. ...Read more
Property
Note investing: A way into the property market for younger Australians?
As the traditional route into the housing market becomes more difficult, could unorthodox alternatives like note investing bridge the gap? ...Read more
Do lockdowns boost property prices? Are short-sellers levelling the playing field? Did you lodge your tax returns early?
Listen now
Will lockdowns halt the housing boom? Is the metaverse taking over? And the cons of lodging your tax returns early
Listen now
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Are property prices set to crash? Should you jump on board the fintok craze? And how to prepare for this tax time
Listen now
Property
Why it now costs 130% more to service a mortgage than 3 decades ago
The lifetime cost of owning a home has increased by over 130 per cent in just three decades, new research has revealed. ...Read more
Property
Using the 30/30/3 rule for home buying during uncertain times
Thinking of buying a home? Uncertain economic times may have you double guessing your purchase, but the 30/30/3 rule can help you make this a reality. ...Read more
Property
Rental yields reach decade high, but not all markets move at the same pace
Changing consumer preferences towards lifestyle destinations and a lack of supply have led to record national price growth, albeit price fluctuations vary region-to-region, fresh figures show. ...Read more
Property
What younger Australians are getting wrong about home loans
As young Australians look to fight the odds and take their first step onto the property ladder, more and more are making easy mistakes. ...Read more
Property
More than 1 in 3 Aussie properties are cheaper to buy than rent
Having a mortgage is even more likely to be cheaper than renting than it was pre-pandemic, new research has revealed. ...Read more
Property
How will the moratorium on evictions impact landlords and tenants?
The NSW government has announced a 60-day moratorium on evictions, with landlords gifted incentives to reduce the burden on COVID-19-affected tenants. ...Read more
Property
Young renters cry out against ‘lack of respect’ in rental market
Young Australians have expressed dismay over the perceived discrimination within the rental market as the wealth divide forces them into long-term renting. ...Read more
Property
Note investing: A way into the property market for younger Australians?
As the traditional route into the housing market becomes more difficult, could unorthodox alternatives like note investing bridge the gap? ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
