Welcome to another edition of Client For Life
What a whirlwind of a few months. With auction clearance rates being in the mid to high 80 percent, we have seen an amazing property surge. At Solid, we talk about the retail market, being the home owner’s market or primary place of residence market and then the investor market.
I had lunch with a leading real estate agent who operates out of Prahran yesterday and he said that the older apartments are actually not performing as well as the new apartments in the home owner’s market.
We know that this is the case in the investor market due to the lack of deductions for the depreciation schedule and often the rentals achieved are not as high due to the need for updating and renovations.
Interestingly enough, most of our price lists for our current investments were set up to 12 months ago by the developers and we know that buying is really good value at the moment. Any investor who has purchased through our program in the past 2 – 3 years has seen gains in their investments.
When I first started Solid, we were buying 1 bed, 1 bath, 1 car apartments in Prahran for about $465,000. Today these apartments are $515,000.
I met with another developer last week who has two large developments under construction in South Melbourne and he complained that he sold his apartments way too cheaply. I reminded him that they were priced to sell in a GFC market, but that didn’t seem to cheer him up too much. Great for our investors!
We are also seeing a real surge in optimism of the new investors coming into our program. We are having about an 85 percent conversion into investments, and this is a big step up from about 50 percent for this time last year. This is mostly due to either confidence or serviceability.
The real message is for those who had the confidence to invest over the past 2 – 3 years, you will be well rewarded in this current market surge.
I noted that the Sydney Market has seen an increase of 4.1 percent in the last quarter in comparison to the Melbourne market of 2.5 percent with the median house price increasing by 9 percent.
Overall we have seen a 9.1 percent growth this year here in Melbourne.
We are focusing on reviews with all our clients for the month of November and December. You will receive a call from Ellia or Sarah-Jane to book your review and consider your next addition to your property portfolio.