Invest
Property investors ‘shouldn't assume’ high returns will continue
Home owners and investors have experienced a slight softening in their housing returns and should expect a “further moderating” of returns over the next few months.
Property investors ‘shouldn't assume’ high returns will continue
Home owners and investors have experienced a slight softening in their housing returns and should expect a “further moderating” of returns over the next few months.
Statistics from CoreLogic reveal that in the 12 months to August 2017, the total returns from housing were 13.2 per cent. That’s down from 14.2 per cent in the 12 months to July 2017.
Breaking it down, the returns for the housing asset class across the country were recorded at 13.5 per cent, and the return on units was 12.0 per cent. CoreLogic noted that as the return is calibrated to consider both value change and gross rental yield, houses tend to have “superior value growth performance” and units “superior rental returns”.
However, those returns, while softer, are still well above the 10-year average to August 2017. Over that period, the total returns for housing were 8.8 per cent with houses recording 8.9 per cent and units 8.5 per cent.
Head of research at CoreLogic, Cameron Kusher said: “The total returns data, particularly for the past decade, shows why housing investment has been so popular and hit record highs. Returns have been fairly consistent and less volatile than equities however; the ongoing strength and the evidence of a recent slowdown should give investors pause for thought.
“With mortgage rates starting to increase for investors, record-high levels of new housing supply and value growth slowing, housing investors shouldn’t assume that the types of returns seen over recent years will continue to be replicated going forward.”
The CoreLogic note added that the housing returns in capital cities have "generally been superior" to regional markets, with total returns over the past decade calculated to be 9.3 per cent. In the year to August, that figure was split between 14.0 per cent for houses and 12.3 per cent for units.
Mr Kusher said capital growth is "now appearing to have peaked" with rental yields at record lows.
"It is reasonable to expect a further moderating of total returns over the coming months. The other important thing to consider when looking at total returns is the calculation of the rental income.
"Although rents are increasing in many areas, the assumption in a gross rental yield calculation is that the property is occupied for 52 weeks of the year. In some parts of the country this is increasingly difficult to achieve and it can eat into the investment returns."
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
Property
Real estate investment: Spotting high-growth potentials
Investing in real estate has long been a favoured approach for Australians looking to grow their wealth. Read more
Property
Granny flats become Aussie families' cost-effective solution to soaring living costs
As the cost of living skyrockets, a forward-thinking trend is sweeping across Australia – granny flats are becoming a favoured living arrangement for older Aussies seeking comfort and proximity to ...Read more
Property
Homebuyers grapple with extended savings period amid affordability crisis
Gone are the days when an Australian dream home seemed just within reach. The path to homeownership in Australia has extended by at least two arduous years, as revealed by the latest insights from ...Read more
Property
Hybrid development unlocks new potential for NDIS housing in metro hotspots
In a ground-breaking strategy aimed at addressing the stark imbalance between the location of Specialist Disability Accommodation (SDA) developments and the actual areas of demand, Aligned Disability ...Read more
Property
Property prices boosted by housing policies: RBA
The central bank has outlined the “pervasive” impact that policy has on property. Read more
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
Property
Real estate investment: Spotting high-growth potentials
Investing in real estate has long been a favoured approach for Australians looking to grow their wealth. Read more
Property
Granny flats become Aussie families' cost-effective solution to soaring living costs
As the cost of living skyrockets, a forward-thinking trend is sweeping across Australia – granny flats are becoming a favoured living arrangement for older Aussies seeking comfort and proximity to ...Read more
Property
Homebuyers grapple with extended savings period amid affordability crisis
Gone are the days when an Australian dream home seemed just within reach. The path to homeownership in Australia has extended by at least two arduous years, as revealed by the latest insights from ...Read more
Property
Hybrid development unlocks new potential for NDIS housing in metro hotspots
In a ground-breaking strategy aimed at addressing the stark imbalance between the location of Specialist Disability Accommodation (SDA) developments and the actual areas of demand, Aligned Disability ...Read more
Property
Property prices boosted by housing policies: RBA
The central bank has outlined the “pervasive” impact that policy has on property. Read more