As we all know, Daniel Andrews was re-elected as Victoria’s Premier last weekend, very convincingly. What does that mean for the state’s property market? We hope a resounding vote will at least provide confidence to buyers and sellers, and while we’ll only see the results in time, here is what we know so far…
The Premier has promised to build on recent changes to tenancy laws by offering tenants access to solar power savings. This would come in the form of subsidies for solar on 50,000 rental properties, aligning with the state’s renewable energy target of 50% by 2030. Taxpayers will foot the bill for half the cost of installation, while renters and landlords will pay one quarter each. Tenants will get savings on their electricity bills, but have to pay some of those savings back to the government over a four-year period, and implementing it may be tricky in ensuring tenants stay for four years. Landlords will benefit by having solar power on their property, which will attract tenants and could increase the value. It’s being marketed as a “win-win for all” policy.
Andrews has also promised to deliver on infrastructure promises by delivering more road and rail - including a rail line to Melbourne Airport and the North East Link – as well as schools and hospitals. How this will be paid for is questionable, but if action is taken – and the work is managed well - it could boost property values, especially in those areas directly impacted, as well as improving Melbourne’s liveability.
In other news I wanted to share with you all that I have joined a new association for property investors called PICA (Property Investors Council of Australia). As its website says, PICA is a not-for-profit organisation committed to advocating and lobbying on behalf of property investors and educating its members on the benefits and risks of property investing in Australia.
With all the negative press and changes going on in property, including tenancy laws, lending and potentially negative gearing and capital gain tax exemptions, this new association is giving property investors a voice to ensure our side of the story is told and our investments are protected. It’s only $5 to join, and the more members we get, the greater our voice and ultimately the more positive impact we can make. They need our help, and we really need theirs.
If you want help finding an investment-grade property in Melbourne or elsewhere in Victoria in the current market, contact us for some advice today.
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Right now the most notable rising markets in Australia are in Victoria. As markets Melbourne move into an orderly wind-down phase after several years to strong growth, locations in Regional Victoria have taken over the mantle as growth leaders. Regional cities and towns close to the state capital are thriving, with busy activity from buyers - and prices are starting to rise. We have already seen 20% annual increases in some markets. Join me and Hotspotting founder Terry Ryder in this special webinar to discuss where the best opportunities exist. REGISTER HERE
What has happened in Victoria’s property market over 2018?
2018 has been a roller coaster of a year! The APRA effect in conjunction with the Banking Royal Commission has seen fewer investors qualifying for money and those who do often end up with substantially less that what they would have been able to borrow 12 months ago (If you want to read more about this, we have covered this topic at length in previous Inner Circles.
Official price growth data, which, according to CoreLogic shows Melbourne’s dwelling value has fallen over the past year, doesn’t accurately reflect the dynamics of the market. It has actually been a two-speed market for a few months now, with affordability a key factor in buying and selling. We have seen the clearance rates for metro suburbs slow down in the $1.5m-plus market, while markets offering good value for $500,000 or under, such as Ballarat and Geelong, are booming!
With investors taking a backseat, first homebuyers have come to the fore, with competition strong under the $750,000 mark in Melbourne, however they are starting to slow down a little too as we approach the end of the year.
Stock levels have increased somewhat in Melbourne and with clearance rates dropping to 47% it is well and truly a buyers’ market. Anyone who is cashed up and ready to go could in fact do quite well and secure a good discount for property, and many properties are selling in post-auction sales with vendors realising they must meet the market. Of course, buyers still need to purchase a quality investment-grade property to maximise this opportunity. As is often said, you make money when you buy, and if you hold for the long run you’ll make even stronger gains, with prices in Melbourne increasing by more than 40% over the past five years and nearly 80% over the past decade.
Next month will we give you an overview of where we see the market heading in 2019. Stay tuned!
For expert advice on where and what you should buy in the current market, contact us today for an obligation-free discussion.
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Not only did we deliver on this requirement, but we identified and purchased a very successful asset for them, meeting their goal of achieving strong capital growth – and then some – with the property experiencing significantly higher growth than the overall Melbourne market. In just four years it has risen in value by 45.8%, compared to just 29.7% for the rest of the market over the same period.
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Peter and Wilma are now proud Melbourne property owners, with confidence their property will continue to perform for many years to come, helping them to continue building wealth for their retirement.
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