A breakdown of residential property price indexes for the past year shows why average figures tell only part of the story – and why it is critical to have a working knowledge of local price variations.
Australian Bureau of Statistics residential property price figures for the June quarter showed a 10.1 per cent average annual price rise across Australia’s eight capital cities. Figures for each of the capitals though showed most of the gains were in Sydney (15.6 per cent), Melbourne (9.3 per cent) and Brisbane (6.8 per cent).
Similarly, Portfolio Management Services’ acquisition team is finding large variations from suburb to suburb in the key markets for investment property buyers. So if you’re thinking of using a buyers advocate to purchase an investment property make sure they have the long-term experience and expertise to tell you the whole story.
Discussing the Brisbane market, Property Acquisitions Advisor David Powell said it was still a good time to buy. Buyers though needed to be “very picky” about where they were buying, with some suburbs and even pockets within suburbs outperforming those around them.
“We’re paid to do that research for our clients, to pick out those properties that are going to perform for them over the long term,” he said.
Mr Powell said the focus remained on buying established houses rather than the growing number of new apartments and off-the-plan options hitting the Brisbane market.
It is consistent with Portfolio Management Services’ successful strategy for buying investment property. The company has a long-standing track record as an investment property buyer, buying established houses that meet its property investment criteria on behalf of clients.
These include that the property must be priced at or below market value, offer above-average capital growth prospects, demonstrate above-average rental returns and require minimal refurbishment and maintenance.
This approach has seen the company average total returns of 11.7 per cent per year for the past 41 years as an investment property buyer, according to independent financial markets analyst and research company Atchison Consultants.
While different from the role generally associated with an investment buyer’s advocate, Portfolio Management Services’ work involves acting for clients at each stage of the investment property buying process. Typically this involves finding the best assets from the perspective of an investment property buyer, assisting clients with finance, acquiring the property and providing ongoing support with leasing and property management.
Portfolio Management Services Managing Director Jock Bing said the company would continue to use its knowledge of key property markets to find assets that fit its criteria for successful property investment.
“You can always find something,” he said. “At the moment in Brisbane we might look at five properties and buy one. In Sydney we might look at 15, in Melbourne it is more like 20-40.”
“If you want to make money you need to look suburb by suburb for places that will go somewhere over time. Everything will go up over 10 years, the trick is to find property that will double in seven,” he said.