Does affordable property investment still exist?

affordable property

If you believed everything you read about property market conditions around the nation, then you would think that prices are higher than they’ve ever been – everywhere.

This is simply not the case.

Yes, property prices have been growing strongly since the almost enforced softening in the middle of the pandemic, but some locations still have median prices well below their most recent peak.

Indeed, according to new research from CoreLogic, comparing current capital city values with previous peaks adds some perspective to the current upswing – particularly in Perth and Darwin, where values remain substantially below their record highs from 2014.

It also highlights the very different dynamics across capital cities – such as in the ACT, where dwelling values have hit a new record high every month for 19 months, according to the research.


Affordability still exists

However, there is no question that sale prices are booming in many locations, partly driven by the continued low interest rate environment as well as excess demand over supply.

Sydney’s median house value is now an astonishing $1.1 million, and its median unit value is $755,000.

Unless you have invested in Sydney, or are an expat returning home from a more expensive overseas location, it could be difficult to buy anywhere close to the centre of the Harbour City with these sorts of prices.

That’s not to say that there aren’t affordable options for homebuyers and investors in Greater Sydney, but buyers need to consider outer-ring locations where prices are lower.

Over the years, we have always been strong proponents of investing interstate.

Long before the pandemic arrived on our shores, we understood the potential of making the most of different market cycles as well as more affordable property prices across the nation.

This point of view is even more pronounced now, given Sydney property prices have soared higher still, pushing the limits of affordability to new levels.

Let’s compare Brisbane as an example, which is experiencing its own market upswing at present.

Dwelling values are rising there, too, but the buy-in prices were much lower to start off with, which means they remain affordable to the many rather than the few like in Sydney.

According to CoreLogic, the median house value in Brisbane in February was about $608,000 and the median unit value was about $401,000 – almost half the value of Sydney.

The rental market in Brisbane is also stronger given it was never reliant on international migrants in the first place.

In fact, the Brisbane vacancy rate is currently just 1.5 per cent, compared to 3.4 per cent in Sydney, according to SQM Research.

The vacancy rate in Sydney actually increased over the month of March and the city has also recorded reducing rents for houses and units over the month and the year.

Conversely, rents in Brisbane have increased 5.8 per cent for houses and 2.5 per cent for units over the past 12 months.

Capital growth and yield

With lower property prices as well as stronger rents, then it’s no surprise that yields in more affordable capital cities like Brisbane are superior.

For example, the gross yield for houses in Brisbane is 4.1 per cent and for units it is 5.2 per cent, but in Sydney it’s 2.5 per cent and 3.3 per cent respectively.

Yields are also a measure of affordability for investors because they provide an indication of the cash flow that is likely to be earned from the investment.

While savvy investors always look for future capital growth, they also need cash flow to ensure they can hold the property over the long-term.

Real estate utopia is generally those locations where there is a mix of affordable property prices as well as superior yields and rising market conditions, which locations such as Brisbane have in spades at present.

High-Performance Property Investment in
5 Simple Steps

In this free guide, you will learn how to Implement the same strategies that led me to build a $3.5 million dollar portfolio in less than six years. – Daniel Walsh

Related Post

PRIVACY POLICY

Respecting your Privacy

Your Property Your Wealth Pty Ltd (YPYW) is committed to supporting the Australian Privacy Principles for all fair handling of Personal Information which set clear standards for the collection, use, disclosure, storage of and access to Personal Information collected during the course of business operations and compliance with the Privacy Act 1988 (Commonwealth) and its amendments (the Act), and the Australian Privacy Principles (APPs) set out in that Act. You can see the full text of the APPs online at the Office of the Australian Information Commissioner’s website at:

http://www.oaic.gov.au/privacy/privacy-act/the-privacy-act

Personal Information means your name, mailing or residential address, telephone number, email address and other transaction and registration details including the company you work for and your role and financial information, including credit card information and information collected from credit reporting agencies.

Our respect for your rights to the privacy of your personal information is paramount.  We have policies and procedures in place to ensure that all personal information, no matter how or where it is obtained, is handled sensitively, securely and in accordance with the APPs.

This Privacy Policy sets out:

  • What sort of personal information is collected and stored;
  • How information is collected and used;
  • What happens if you choose not to provide the required information; and
  • How you can request access to the personal information we hold about you.

From time to time it may be necessary for YPYW to review and revise this Privacy Policy. We reserve the right to change our policy at any time. Amendments or replacements of the Privacy Policy will be posted on our website.

Collection of Your Personal Information

We only collect personal information relevant to our business relationship with you so that we can provide our services and products. We may collect your personal information:

  • directly from you including via telephone, email or facsimile;
  • when your register on our website;
  • when you place an order or service request with us;
  • where you access and interact with our website;
  • from other sources including a third party such as credit reporting; and
  • any correspondence we receive from you.

Is your personal information secure

Where you submit personal information, we manage it by using up-to-date techniques and processes that meet current industry standards to ensure that your personal information is kept secure and confidential. We also take measures to destroy or permanently de-identify personal information if it is no longer required.

Use and Disclosure of Personal Information

You acknowledge and consent that by providing your personal information to us that we may use and disclose your personal information for the purpose for which it was collected or for a related or ancillary purpose such as:

  • supply of our services and products to you in accordance with our Terms and Conditions and any agreement entered into with you, to facilitate, process, carry out and respond to your request;
  • to our third party service providers to assist us in providing and improving our services and products to you and developing, improving and marketing our services and products to you;
  • for regulatory reporting and compliance with our legal obligations, to various regulatory bodies and law enforcement officials and agencies to protect against fraud and for related security purposes;
  • to the seller or supplier of any products to you for the purpose of ascertaining and obtaining any information required to perform our services for you;
  • to identify you and conduct appropriate checks, including credit checks;
  • set up, administer and manage our services and products and systems, including the management and administration of an account;
  • to train and develop our staff to better provide services to you;
  • to contact you; and
  • to our successors and/or assigns

What happens if you do not want to disclose personal information?

You have no obligation to provide any personal information requested by us, but if you choose to withhold personal information, we may not be able to provide you with the products and services that depend on the collection of that information.

Removing your personal information

You may contact us at any time in writing and request that we remove and delete your stored personal information.

Providing Personal Information About Another Person

You represent to us that where you provide personal information to us about another person, you are authorised to provide that information to us, and that you will inform that person who we are, how we use and disclose their information, and that they can gain access to that information.

Linked Sites

YPYW’s website may contain links to websites which are owned or operated by other parties. You should make enquiries as to the privacy policies of these parties. We are not responsible for information, or the privacy practices of such websites.

How can you access your personal information?

You may in writing request access to personal information that we hold about you. We will provide you with access to personal information in accordance with the Act and APPs and we may not grant you access to the personal information that we hold where the APPs allow us to do so. If you are refused access to information, we will provide you with reasons for the refusal in writing.

How to contact us

If you have any questions in relation to privacy, please contact us on 0490 912 045 or email Daniel Walsh – admin@ypyw.com.au. For more information about privacy law please visit http://www.oaic.gov.au/privacy.

High-Performance Property Investment in 5 Simple Steps

In this free guide, you will learn how to Implement the same strategies that led me to build a $3.5 million dollar portfolio in less than six years. – Daniel Walsh

Download eBook