Greetings from Scoutable and welcome to our June Wrap Up.
I can’t believe how fast this year is flying! I hope you are staying warm and cosy as winter heads into full gear.
June saw 3,211 properties scheduled for auction across Sydney, with an average clearance rate of 55.4%. Melbourne saw 4,084 properties scheduled, also with an average clearance rate of 59.8%. Brisbane saw 557 properties scheduled for auction with an average clearance rate of 44.8%. In comparison, June last year saw an average clearance rate of 72.3% (4,066 properties), 73.8% (4,044 properties), & 42% (1,156 properties) respectively.
The above data is showing a drop in clearance rates of 16.9% in Sydney and 14% in Melbourne, and an increase of 2.8% in Brisbane, for the June year on year comparison. Across the three cities, there has been an overall drop in the number of properties scheduled for auction.
Property is generally purchased for two main reasons. Either as your home or as an investment. Recently, our good friends at Fox & Hare (if you need a financial check up then they're the doctors to see) asked us if we have an example of a good versus bad investment property.
A big draw card to property investing is that it is a tangible asset - we can see it, touch it and understand it. A mistake property investors often make is purchasing a property that appeals to their taste, instead of focusing on what will appeal to the widest pool of tenants and what suburbs have the best potential for capital growth.Have a look at the two properties below:
Good Capital Growth Investment
5a Walker Street Redfern
Last sold – October 2017 $1,270,000
Previous sale – December 2009 $650,000
Gain - $620,000 over seven years and ten months
https://www.realestate.com.au/sold/property-house-nsw-redfern-126499654
Not as good Capital Growth Investment
59/30 Gadigal Avenue Zetland
Last sold – June 2018 $980,000
Previous sale – March 2011 $650,000
Gain - $330,000 over seven years and three months
https://www.realestate.com.au/sold/property-apartment-nsw-zetland-128320922
Both properties were purchased for $650,000, were held for approximately seven years and are in similar gentrifying inner city locations (Redfern & Waterloo are neighbouring suburbs). However, one of the properties had almost double the capital growth. This is a good comparison between new and established properties. Whilst you can still make profit out of new build apartments, there is more potential for growth in properties which are of limited supply.
The Zetland apartment is located in an area where industrial land is being redeveloped into a residential area. The over supply of similar stock has reduced the capital growth. Whereas, Walker Street (purchased for an investor client of mine) has a lesser number of properties available or likely to be available for development due to planning / zoning and heritage restrictions (particularly terrace housing).
In short, there is more stock of apartments available in Zetland compared to terrace housing in Redfern - limited supply and high demand drive capital growth. It seems unlikely this availability will change in the immediate future.
Please note, I am not suggesting apartments are poor investments, rather, it is a matter of selecting the right style, size and location.
If you're thinking of buying or investing in Australian property, get in touch to learn about Scoutable services and how we can assist with your property search.
Till next month,
Kellie Landrey | Principal Buyers Agent
IN THE NEWS
HOUSE PRICES TO REMAIN FLAT
https://www.domain.com.au/news/australias-house-prices-to-remain-flat-over-201819-financial-year-bis-oxford-economics-report-tips-20180625-h11q27-441379/
AUSTRALIA'S MOST CLICKED HOMES
https://www.news.com.au/finance/real-estate/perth-wa/10-most-popular-homes-in-australia-ion-the-market/news-story/24af872038bc8b43dd4e8c8fd78d2813
THE ORIGINAL STREETS OF MELBOURNE
https://www.realestate.com.au/news/the-story-of-melbournes-first-streets/
PROPERTY OF THE MONTH
59 BARINGA ROAD NORTHBRIDGE
Northbridge is located on Sydney's Lower North Shore approximately seven kilometres from the CBD. It took its name from its location, north of a beautiful sandstone suspension bridge, now known as the Long Gully Bridge. The leafy suburb forms a peninsula on Middle Harbour surrounded by Long Bay and Sailors Bay.
Set on generous 698sqm of land, 59 Baringa Road offers a clever fusion of old and new. The 1920s home features all the charms of its period including high ornate ceilings, formal and informal living areas and polished timber floors. The original fireplace had been converted to gas, the light filled rooms maintain their moody character. The garden is landscaped just enough for it not to feel fussed over though everything seems just right. There's a herb garden and fruit trees, and picturesque green lawns complemented by all day northern sun.
There's an abundance of rooms, providing versatility and makes this home suitable for a variety of buyers.
The buyers guide is $3,300,000.
If you'd like to know more about this property or any others, please get in touch.
