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Invest Quest Perth

 

:: INVEST in the BEST :: 

Choosing to invest in property can be a minefield of potential pitfalls that really need professional advice &
assistance.

An “Advocate in Investment” would approach property investment in Perth with a step by step proven method.

Step 1 ::~ What are your requirements

Step 2 ::~ Determine your wealth creation strategy

Step 3 ::~ Property Search

Step 4 ::~ Property Inspection

Step 5 ::~ Due Diligence

Step 6 ::~ Accurate Pricing

Step 7 ::~ Acquisition Strategy

As a certified “Buying Agent & Investor Advocate”
Dean Mitchell can assist is putting together a Property Investment Plan of Action that will provide a purchasing outcome to position any investor with short term & long term positive returns.

Getting Stated, seeing & hearing more about the 7 success steps to being a property investor simply contact Dean directly for a chat.
Get the wheels in motion this year is the first thing, because there is never a perfect time to invest within the real estate cycle. You could be waiting years & missing many really good opportunities.
When you have someone assisting your search, advising on selection, plus negotiating to acquire the right property for the right price. This assures your process to invest well & buy better.

:: DIAL DEAN ~ 0413122633 

deanmitchell.com.au  

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:: INVESTOR NEWS

The historic low interest rate climate that we are now experiencing is a unique moment in time as RBA interest rates haven’t swilled around at 2.25% since the 1950s. Our research team has noticed that this is already having ramifications across both commercial and residential sectors.

Add to this the low currency exchange and low inflation and we have a perfect storm which is generating unique and unprecedented pressure on the Australian property market, creating a benign micro-climate for owner-occupiers and investors.

The Australian dollar is now sitting just under 0.80 to the mighty greenback, which effectively translates as a 20% discount off property prices. This weak Australian dollar means that greater volumes of investors continue to underpin the market.

It has also encouraged the global community to turned their focus to Australia as we are now very attractive compared to other international destinations and are placed in the top four countries as preferred investor locations.

Investors are returning with a vengeance, as these low interest rates will reinvigorate both the commercial and residential market.

There is a lot of pent up demand, it’s just that the expectation that the exchange rate is going to keep falling and interest rates may go lower. All it takes is a slight change in sentiment and buyers will be moving in – in even greater numbers to take advantage of relatively cheaper prices and better investment returns.

Damon Krongold, director of Beller Project Marketing, noted that that the RBA interest rates are even lower than immediately post GFC.

He believes the combined effect of low interest rates and low inflation have made a great environment for off the plan purchasers to benefit. Whether they be owner occupiers or investors. For owner occupiers, with the RBA interest rate of 2.25% which contributes to an incredibly low borrowing rate of 4.75% and inflation at an incredibly low 1.7%, makes the case stronger than ever for first home buyers to redeploy
their rent into a mortgage.

These unique conditions are ripe for savvy owner occupiers and investors to be ahead of the curve.

We are now firmly part of the global economy and just need to jump into the market as money in the bank is just not working any more, the interest climate is so low. Australian property is a very attractive proposition as we can still achieve good yields.

The numbers also add up for commercial property investment.

Buying a property in your local shopping neighbourhood can provide both financial and emotional security. As consumers we need to feel comfortable with the business paying our rent and financially the numbers today are cash flow positive for the first time in many years.

Interest rates for commercial property and residential property are almost identical, with the variance only 0.35%pa So, when doing the numbers, don’t forget that commercial property is more affordable than you think.

The big push will come from private super funds and individuals with cash in the bank and who are frustrated with their investment returns. Commercial property investment will then be seen as a logical choice.

Andrew Fawell is director of Beller Property Group.

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:: MORE INVESTOR NEWS

Throughout 2014, the economies and property markets of much of the eastern states have come roaring back, leaving WA licking its wounds. But are things as bad as they seem, or is the WA market actually one for the astute investor?

If there’s one thing that’s certain in the wonderful world of economics, it’s that things can change fast.

Less than six months ago, WA boasted the nation’s best-performing economy and a AAA credit rating to boot.  These days, however, it’s NSW that is the nation’s leading economy, and WA now shares the same credit rating as Tasmania, according to Moody’s Investors Service.

Moreover, the so-so economy has translated to so-so growth in dwelling prices.

“Subdued price growth in Perth [in the September 2014 quarter] was no real surprise as that market has consistently reported waning buyer activity over the past year,” says Andrew Wilson, chief economist at Australian Property Monitors (APM).

According to the RP Data CoreLogic Home Value Index results, Perth dwelling prices have only grown by 3.2% in the past 12 months. This is the weakest level of growth out of all the capital cities other than Canberra, and is dwarfed by that of the eastern powerhouses of Sydney (14.3%) and Melbourne (8.1%).

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:: Current state of the market

The massive levels of investment of the resources boom have now come and gone, and what subsequently happened is housing temporarily took its place, says Harley Dale, chief economist at the Housing Industry Association (HIA).

“So there has been a very strong new-home building recovery in WA, the strongest in the country.

In 2014, WA will build its largest number of new homes on record, so there has been a lot of supply come on in the space of about a couple of years,” Dale says.

“WA has had a couple of pretty strong price booms over the past decade, but price gains are relatively modest at the moment,” he adds.

According to QBE’s Australian Housing Outlook 2014 2017, property price growth in 2012/13 was underpinned by record net overseas and interstate migration inflows, leading to tight vacancy rates and substantial growth in rents. However, in 2013/14 population growth began to stall as vacancy rates and the economy started slowing down.

Meanwhile, in CommSec’s most recent State of the States report, WA lost its spot as the nation’s best- performing economy to NSW. It lost ground on retail trade, equipment investment and population growth, which had a lot to do with the fading of the mining boom.

However, WA is still the leading state in terms of housing finance, which is one of its new key economic drivers, overtaking mining. The number of commitments is now 8.5% above the long-term average.

This is an accurate indicator of strong real estate activity, housing construction, and overall activity in the financial sector. “And again home purchase and construction are vital ingredients in sustaining the economy, together with commercial building,” says the report.

WA is also the outright winner in respect of population growth, with an annual growth rate of 2.53%. This may sound impressive, yet it’s still its slowest rate of growth in almost four years and 3.5% below decade-average levels.

At 4.9%, WA’s unemployment is relatively low compared to the other states; however, it is still 18% above the decade average.

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:: Outlook : What’s ahead

Times are tough in WA, says Dale. This is mainly due to the fact that so much investment has been “sucked out of the economy”.

“Labour market performance, which historically is much better than the eastern seaboard, is going to be deteriorating within WA. And economic growth will have a couple of years not doing what it was,” he says.

“We have the new-home building peaking this year, so there will be fewer homes built in 2015 than in 2014.”

:: Is the boom over?

It will be a long time before we see another investment boom the likes of which we have just been through, says Dale.

“Many would say that was not just a ‘once in a generation’ boom but the largest one Australia has ever seen. So that is not going to come around again in a hurry,” he says.

But investment is a long way from stopping completely, Dale argues. There are still huge gas reserves that will generate further revenue.

“You are not going to see the elevated investment in there for economic growth, and therefore household income growth, over the next five or 10 years that we have been accustomed to over the last five or 10 years. But it is still a reasonable outlook for WA,” says Dale. “I wouldn’t be looking for acceleration in property price growth. I wouldn’t be thinking there’s much short-term gain to be had.”

Dale says this applies especially to areas of WA that were fully leveraged through mining investment; they are all already seeing quite sharp falls in property prices and sharp rises in vacancy rates.

We have seen mining investment start to decline, but it hasn’t totally stopped, says Zigomanis.

“There are still projects working their way through.  Two to three years out from now it will start to drop off really rapidly. There is more downside beyond the next 12 months rather than in the next 12 months,” he says.

:: Is there much worth in Perth?

The easing of rental market conditions in Perth is likely to continue over the next couple of years, says Dale.

Moreover, the QBE Housing Outlook says low interest rates should support Perth’s prices at around current levels over 2014/15 and possibly 2015/16. However, the slowing economy coupled with the predicted higher interest rates is likely to cause price declines by 2016/17.

Consequently, over the three years to June 2017, Perth’s median house price is forecast to be $525,000, or 2% below  the June quarter 2014 median. This would represent a 10% decline, in real terms.

The report also predicts weaker underlying demand on the horizon.
“With the current strong construction pipeline still working its way through to completion, any measured dwelling deficiency currently in the market is likely to be rapidly eroded,” it says.

:: Agriculture and tourism

At the end of the day, even if the price of resources goes down, the state still has a good head of steam, says John Edwards of OnTheHouse.com.au.
“It’s close to Asia and it’s fundamentally got good assets, which should stand it in good stead for the future, ” he says.

Indeed, there are an increasing number of tourists coming to WA, with more than 776,500 arriving in the 12 months to March 2014, which is up 4.3% on the previous year.

In particular, there a large number of Chinese tourists visiting WA, which is significant because they spend on average $3,000 more than the average international visitor.  In response, the WA government has allocated more than $3.9m just for tourism marketing to China.

Meanwhile, the WA premier Colin Barnett argues that agriculture in WA could be on the way to experiencing its best fortunes in more than half a century. This is primarily due to Asian income growth and their increasing demand for Australian food.

Indeed, it is predicted that in the coming years the farming sector will grow faster than the mining sector in WA, due mainly to the rising demand for the state’s food products. The North west is gearing up to increase Australia’s capacity to supply Asia & could see agriculture be a dominant force in the future. This will be a long term process as the infrastructure to get the product from farms to the market is a huge investment in roads & transportation.

At the moment, the total value of WA’s agriculture and food products is $20bn at the retail and export levels, and two thirds of its agriculture and food products are exported.

Summary

All indications are it will be an even playing field for sellers & buyers so may the best agents win for their customers. But a wise move may well be to sell the old investment in 2015 & buy in 2016 as the market is set for a correction which will kick start another cycle.

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DIAL DEAN :: 0413122633 :: 

Complimentary Consultation by Appointment.
dean
Dean Mitchell
Perth’s Property Promoter & Broker

deanmitchell.com.au  

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