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New data indicating unsuspecting property stars

By Simon Pressley

Promoted by Propertyology

Analysis of recent economic data suggests that the property market of several lower profile Australian cities have more to look forward to than our most populous cities.

Of all capital cities, recent economic data adds to a building list of positive indicators suggesting that the outlook for Hobart remains superior to all other capital cities. Meanwhile, there’s a healthy list of regional cities with economic trends which also catch the eye of our analysis.

According to official data published by Australian Bureau of Statistics, the increase in jobs in Hobart over the last 12 months is four times higher than the national average and more than double every other capital city.

Employment trends are often a precursor to property market trends; this chart helps illustrate our point. Sydney (home to 21.2 per cent of Australia’s population) and Melbourne (18.7 per cent) have arguably been the only two locations in Australia where property markets have performed strongly over the last four years and it’s no coincidence at all that these two cities produced 57 per cent of Australia’s total job creation over the same period.

The relationship between percentage of national job creation and percentage of total Australian population for all capital cities is remarkably consistent with how respective property markets have performed over the last four years.

ABS data confirms that Australia continues to produce steady employment growth with a 2.1 per cent increase over the 12 months ending May 2017.

There can often be a lag of 12-18 months before what’s occurring on the jobs front is materially reflected in real property data. At a base level, property is shelter. Wherever there is demand for more jobs in the future there will be demand for more shelter! This core philosophy is something which is engrained in Propertyology’s psyche (we place more emphasis on economic trends than property-specific data).

There was an 8.4 per cent increase in jobs in Hobart over the last 12 months. Recently released data by both Core Logic and Domain confirm that Hobart had the biggest increase in median property values of all capital cities over the last 6 months.

It was a classic case of ‘daylight second’ in the ABS jobs race with Melbourne producing a 3.5 per cent increase, followed by Adelaide (2.2 per cent). Growth in Sydney and Canberra was equal to the 2.1 per cent national average.

The correlation between employment growth and property market performance was again evident in Brisbane (1.3 per cent ) and PerthPerth, TAS Perth, WA (0.6 per cent), both below the national average employment growth rate, while Darwin saw a 0.8 per cent retraction in jobs.

The anticipated continued improvement in Tasmania’s economy influences Propertyology’s forecast for Australia’s most affordable capital city to continue to be the nation’s best performer for quite some time yet.

Changes in job volumes at an individual city level ~ as opposed to just looking at an unemployment rate in isolation ~ provides more insight in to future performance of property markets.

Propertyology’s analysis of every local government jurisdictions across Australia uncovered some encouraging signs for parts of regional Australia where 8 million Australians elect to live and work. There are several regional cities with extremely affordable housing and good economic outlooks that Propertyology is actively helping our clients invest in today.

The biggest increase in job volumes in Australia over the 2 years ending May 2017 was in the Victorian regional city of Geelong. 22.3 per cent growth is off the charts although we do note a retraction in jobs of 3.1 per cent over the last 12 months – a sign that perhaps the best buying times in Geelong are behind us.

The regional city of Shepparton, where a typical house only costs approximately $250,000, has sustained employment growth of 19.1 per cent over the last couple of years. Our Research Report contains more insights about Shepparton’s property market.

Bendigo (6.3 per cent) is another Victorian regional location with solid jobs data.

Infrastructure expansions such as the airport and hospital along with good growth in the retail and tourism sectors are behind the 21.6 per cent growth in Dubbo’s employment.

Newcastle, arguably the most consistent property market performers in all of Australia over the last decade, produced 12.6 per cent growth in job volumes over the last 2 years. Employment growth of 9.4 per cent in Mid-North Coast (Port Macquarie) last year was also significant. Meanwhile, Coffs Harbour (10.2 per cent) and Shoalhaven (25.1 per cent) both saw a significant retraction in jobs over the last 12 months.

Green shoots are appearing in a few Queensland regional cities, too. As detailed in Propertyology’s Townsville Market Report, there’s a big bunch of reasons for optimism in Australia’s thirteenth largest city. The 12.7 per cent increase in jobs over the last 12 months is the start of what shapes as a significant revival.

A very solid 12 months has also unfolded in Mackay (7.6 per cent growth), Beaudesert / Logan (10.2 per cent), and Toowoomba (12.8 per cent). The 6.3 per cent employment growth for the year ending May 2017 in Cairns, Australia’s gateway to Asia, is likely to further accelerate in coming years.

In addition to economic development (jobs), the factors which have the biggest influence on property prices are affordability, sentiment, and supply.

It’s never ONE thing which we base our investment decision on – it’s the sum of all of these things which determines whether or not a location gets our green light!

 

Propertyology is a national property market researcher and buyer’s agency who buys properties exclusively for investors in strategically-chosen locations all over Australia. The multi-award-winning firm’s success includes being a finalist in the 2017 Telstra Business Awards and 2016 winner of Small Residential Agency of the Year in REIQ Awards For Excellence. Managing Director Simon Pressley is a REIA Hall Of Fame Inductee and a three-time winner of the REIA and REIQ Buyers Agent of the Year award.

 

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  ["title"]=>
  string(51) "Boost for investors as app sets up off-site bidding"
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  ["introtext"]=>
  string(144) "

Property investors are now able to identify and bid on auctions remotely using a new live-streaming functionality launched by Gavl.

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Called “Request an Auction”, the new functionality enables users to watch and bid on any Sydney or Melbourne auction remotely.

Through Gavl, prospective buyers are now able to register to bid on their preferred auction. The platform will obtain permission from the listing agent and confirm within 48 hours.

Vendors can also request to have their auctions broadcast to a larger buyer audience.

Co-founder Joel Smith said that auctions streamed on Gavl attract 47 per cent more viewers than traditional ones.

He said that Request an Auction will be valuable for remote buyers.

“Buyers are able to have Gavl attend any auction they nominate, so they will never have to miss out on an opportunity due to logistical complications in physically attending the auction.

“Vendors, too, have the opportunity to directly book an auction with us, so they can open up their event to buyers all around the world. With more potential buyers, they’re giving their property the chance to receive more bids and maximise their sales result.”

Mr Smith said that prior to the Request an Auction app, buyers were limited to what they could achieve through the Gavl technology.

Gavl is a live-streaming and bidding platform for real estate auctions.

Mr Smith said that it has streamed more than 6,000 auctions, which have achieved 3.5 million views from 50 countries.

Gavl’s Request an Auction function is currently being offered in Melbourne and Sydney only.

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Boost for investors as app sets up off-site bidding
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  ["title"]=>
  string(68) "How a move to Hong Kong impacted Julia’s Australian property goals"
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Having to split her time between Hong Kong and her original base of Sydney has not slowed Julia Tita’s goal of building a high-performance Australian property portfolio. Instead the resulting alterations to her strategy have positively impacted her investing success.

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Having recently purchased her 6th property, Julia joins host Tim Neary to discuss her journey, share her ups and downs over the years, and reveal her thoughts on why some properties are better than others.

Julia also explains why she no longer makes a move without the help of a buyer’s agent, why working with a strong team of specialists is extremely important and discloses her long-term property ambitions.

If you like this episode, show your support by rating us or leaving a review on iTunes (The Smart Property Investment Show) and by following Smart Property Investment on social media: FacebookTwitter and LinkedIn.

If you have any questions about what you heard today, any topics of interest you have in mind, or if you’d like to lend your voice to the show, email [email protected] for more insights!

RELATED AREAS OF INTEREST:

Why is Australian property so unaffordable?
Brisbane infrastructure attracts international interest
Going global
Australia desirable to foreign investors

AREAS MENTIONED:

Eagleby
Charters Towers
Townsville
Brisbane
Paddington
Sydney
Orange
Melbourne 
Glen Iris
Bondi

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How a move to Hong Kong impacted Julia’s Australian property goals
object(stdClass)#1195 (52) {
  ["id"]=>
  string(5) "18159"
  ["title"]=>
  string(88) "‘Common’ referrer practice of being paid on both sides of the fence coming to an end"
  ["alias"]=>
  string(82) "common-referrer-practice-of-being-paid-on-both-sides-of-the-fence-coming-to-an-end"
  ["introtext"]=>
  string(246) "

The practice of property investment firms sharing undisclosed kickbacks among the supply chain involved in development sales will be outlawed in NSW on 1 July this year under the Real Estate Reform being handed down by regulators in NSW.

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Property commentator and valuer, Suburbanite’s Anna Porter, said the reform will address conflicts of interest.

She said they arise when a mortgage broker, accountant or financial planner receives part of the commission from the property firm, who receive their fees from the developer or seller.

“This puts the broker into a position by which they are being paid on both sides of the fence,” she said.

“Until now this has been a grey area and there was nothing stopping this practice.” 

Ms Porter said this has been a common practice in the industry.

"Some well-known mortgage broking firms openly admit to receiving $5,000–$10,000 per referral in their pocket.”

She also said this process has been going on for decades.

"Property investment firms commonly pass some of their commission on to the mortgage broker, accountant or financial planner as a reward to them for passing on the referral. This means that many brokers or financial service providers are making significant amounts of money just to refer on to a property firm, often totalling hundreds of thousands of dollars a year," Anna Porter said.

Ms Porter said the Property, Stock and Business Agents Amendment (Property Industry Reform) Bill 2017 will be in force from July this year, and will prohibit this practice unless the broker or referring partner also holds a real estate industry license.

"Under the new laws, if the broker takes a referral fee from the property firm, they will have to be a licensed real estate agent and also hold a corporation’s license,” she said. 

“Subsequently, every transaction that they receive a referral fee from, they will be putting their license up against the transaction and taking full liability for the conduct, practices and outcome of that transaction, even if they have little to do with the transaction; they are a party to it financially and therefore take as much risk as everyone else in the transaction.”

Mr Porter said where a referrer holds a real estate license, and receives a part of the sale commission, they may find themselves in breach of the ethical requirements under the act.

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‘Common’ referrer practice of being paid on both sides of the fence coming to an end

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