Real estate investors set for festive season buying binge

Media release - 26th November, 2012

Conditions ripe for investor assault on capital city property markets in 2013

  • Melbourne suburbs Ascot Vale, Brunswick and Footscray are set to be investor hotspots in early 2013
  • One and two bedroom units in Sydney’s Bondi Junction will be hot property for investors
  • Two bedroom semis and terraces in Sydney’s Inner West highly sought after by mum-and-dad investors
  • Brisbane’s inner city suburbs returning strong 7% yields
  • The ‘forgotten suburbs’ of Embelton and Ashfield in Perth poised for growth in 2013

As most Aussies take a well-earned break this festive season, leading real estate firm Raine & Horne says astute investors around Australia will step up their search for the right investment property. 

“With interest rates sitting near record lows and rental yields consistently rising in our capital cities, conditions are ripe for a fully-fledged investor assault on Australia’s property markets in the new year,” says Angus Raine, CEO of Raine & Horne.

In Melbourne, Michael Baliviera, State Franchise Manager, Raine & Horne Victoria, says real estate markets within 15 kilometres of the CBD are set to benefit from a surge in shrewd investor buying after Christmas.

“Investors typically circle those properties that hit the market a little late in the Spring market cycle,” says Mr Baliviera.

“As a consequence, as activity slows in the run into Christmas, owners start to realise that they need to adjust price expectations to secure a home sale.”

According to Mr Baliviera, suburbs in Melbourne’s north west such as North Melbourne, Ascot Vale, Brunswick and Footscray will be in the sights of investors in the first weeks of 2013, with homes valued between $600,000 and $650,000 sure to attract plenty of attention.

“In Ascot Vale, a popular tenant market, located within minutes of the CBD, it’s possible to secure a three bedroom home on a 320 sqm block within the $600,000 to $650,000 price range,” says Mr Baliviera, who says investors are currently enjoying rental yields of 5% in Melbourne’s north west.

In Sydney’s east, Tony Laing, Co-Principal of Raine & Horne Bondi Junction, says January is a popular month for investor activity.

“Whether it’s to purchase their first investment property or to increase their portfolio, we generally see more investors in the Bondi Junction market than any other type of buyer in January,” says Mr Laing, who is tipping that well-located one and two bedroom units close to amenities such as the Bondi Junction railway station and the Westfield shopping centre, will be a major focus for investors after Christmas.

“One bedroom apartments in Bondi Junction begin from $450,000 and generate net yields between 5% to 6%, while two bedroom units are on the market from $600,000,” he adds.

In Sydney’s Inner West, Duncan Gordon, Senior Sales Consultant for Raine & Horne Newtown, says investors are expected to snap up any outstanding semis and terraces in early 2013. 

“Early in a new year we generally see a lot of old stock move quickly, especially those close to Sydney University & UTS, to mum-and-dad investors looking for properties to lease to their children before the first semester of university starts,” says Mr Gordon.

“Apart from a weekly rent, a parent/investor can also capitalise on the long term growth,” says Mr Gordon.

According to Australian Property Monitors, capital values in Newtown are growing at an annual average of 4.3%.  

In Brisbane, Lee Paul, Principal of Raine & Horne New Farm, says investors are cashing in on the ideal purchasing conditions and premium rental returns in the Brisbane inner city riverside suburb.

New Farm is awash with investors at the moment and many of them are poised to pick up a high-yielding property when stock levels begin to rise early in the New Year,” says Ms Paul.

With the median sale price around $470,000 for apartments in New Farm, Ms Paul says approximately 50% of the buyers in this price range are investors, while around half of all the dwellings in New Farm are occupied by tenants.

“New Farm is a strong investor market that has some properties achieving yields as high as 7%,” says Ms Paul.

The RBA’s next decision on interest rates in early December is expected to drive the smart investor money in Perth.

“Investors normally pounce in the immediate post-Christmas period, but they may enter the market earlier if another rate drop occurs in December,” says Larry Gallagher, Principal of Raine & Horne North Perth.

“When compared to the current uncertainty in the share market and the yields from long-term banking products, the returns from a Perth property investment are still the most reliable.”

Mr Gallagher says cashed up investors would be wise to focus on the ‘forgotten suburbs’ of Perth such as Embleton and Ashfield, which are close to Perth’s CBD, as the festive season kicks in.

“They are the quiet achievers that generally offer more affordable housing than the suburbs surrounding them,” says Mr Gallagher.

For further media information contact:

Angus Raine, CEO Raine & Horne on 02 9258 5422 or 0409 920 697

Andrew Harrington, National Marketing & Communications Co-ordinator on 02 9258 5400