Finding an Investment Hot Spot

Thinking about getting back into the property market?  You are not alone.

Our Property Styling business here in Melbourne acts as a kind of barometer for market sentiment.  It’s not as exact as whatever the RBA and their lot use but it certainly is reliable, perhaps more so.  Canary anyone?

The last year has been our toughest in business.  With approximately 30% fewer properties on the market due to the retraction of both investors and residents (who have been understandably scared to sell their own property in a downturn) it has been a quieter year than the past three.  However, due mostly to the RBA interest rate decision, the APRA loosening of lending criteria and an unchanged negative gearing environment (on top of the election result), we are seeing Spring arrive a bit early.

It’s made me think about personally getting back into the property market.  We have done really well out of a small investment property in Frankston (Melbourne, Victoria) and I would love to replicate that result.  Mostly this is because – somewhat peversely – I have never staged one of my own investment properties and I would really love that opportunity.

Consequently, I have started the process of having a look at investment property hot spots.

The Hotspotting Price Predictor Index uses two measures to identify a hot spot, sales volumnes (instead of median prices) and a sustained rise in sales volumnes to be followed by a rise in prices.  You can also use other markers like the NAB Residential Property Index.

So here is where they are suggesting we look for our next property hot spot!

BENDIGO

Apparently this gold rush town is having its own second coming, with rising demand taking over from areas like Geelong and Ballarat.  Both home buyers going for a tree change due most likely to unrealistic affordability (even in a downturn) and investors who want a better rental return (my motivator).

MELBOURNE’s OUTER FRINGE

So Melbourne’s Outer Fringe areas is likely to have the best growth.  Werribee has gone nuts and Officer in the SE has also performed really strongly despite the downturn.   I have to admit that I still more sentimentality than is appropriate when making investment decisions so I will likely continue my property hunt into Melbourne’s South East due to its proximity to where I live and have my Property Styling business here in Moorabbin.

I don’t consider them outerfringe but areas like Chelsea, Mentone, Cheltenham , Frankston and the like all have stocks of older property on larger blocks in both the unit and stand alone home market that I will start looking at again.  I am also keen to look further afield at areas that the Freeway links have made more accessible like Mornington through to Rosebud, Dromana and the like.

CoreLogic’s Mapping the Market report found that, in Melbourne, 41.7 per cent of suburbs had a median house value of less than $500,000 compared to 6.9 per cent as at 30 June 2019, declining 34.8 percentage points.

Property to Avoid

What I will however be avoiding is off the plan apartment and townhouse or unit developments as the market is still a tad unpredictable.  I love land anyway as a longer term investment as you can’t make anymore of it.  I have seen quite a few property styling clients selling apartments in particular in developments where they have been burned and are hoping just to get as much out as they bought it for anything from one to three years ago.  (Ouch)

(Sorry, Shameless Plug warning).

So, if you are returning to the market and are looking to capitalise on the upswing in the market contact us for advice and assistance with your Property Styling click here.