It’s scary, really, how little people know as they consider spending hundreds of thousands of dollars: Terry Ryder
Terry RyderDecember 7, 2020
No one has ever succeeded in property investment without knowledge gathered from thorough research. But, for many wannabe investors, research consists of skimming headlines.
I’ve done five seminar presentations in three states in the past couple of weeks and 90% of the questions I’ve received have been based on skinny knowledge, vague impressions and misinformation.
“I’ve just bought a new house-and-land package in Gladstone – how come I can’t find a tenant?”
“I read that the resources boom is over. Do you think I should sell all my properties?”
“I was planning to buy in Brisbane but I saw a report that said there had been no price growth in Brisbane – what should I do?”
It’s scary, really, how little people know as they consider spending hundreds of thousands of dollars.
You have to dig a little deeper.
The major research sources publish generalised data about the major cities. They generally ignore the regions and they publish a single price figure for a city of many millions. It may be interesting but it doesn’t help anyone make an intelligent investment decision.
The latest report from the Real Estate Institute of Australia records a 2.3% decline in Brisbane’s median house price in the March quarter and annual growth of just 0.7%.
Does that mean there’s no growth in Brisbane? No, it doesn’t mean that, not if you look behind the generalised figures. The report fine print shows that median price for the outer ring suburbs rose 2% in the March quarter and is up 4.4% on a year ago. Similarly, the median for the inner-city suburbs rose 1.5% in the quarter and is up 6.5% on a year earlier.
The generalised median unit price for Brisbane dropped marginally in the March quarter and is up only 1.1% in annual terms, but hidden behind that data is a 15.7% annual rise in the median unit price for the outer ring suburbs of the Queensland capital.
Adelaide appears to have delivered nothing much in the way of rental growth in the past year but big a little deeper and you find the median rent for three-bedroom houses in the inner ring suburbs rose 5%. Rent for one-bedroom units are up 6.1% in the inner city and 6.8% in the middle ring suburbs.
Sydney overall recorded a 1.6% decrease in the median unit price in the March quarter and only 1.7% growth over 12 months, but the median unit price for the outer ring suburbs is up 5.7% in annual terms.
The median unit price for Melbourne apartments has dropped in the inner-city areas – not surprisingly, given the vast over-supply – but median price for the middle-ring suburbs is up 3.5%.
There’s never a single market situation in any of our cities. There are different scenarios playing out in different price ranges, product types and geographical areas.
To succeed, you have to go deeper, look behind that shallow analysis of economists and property research firms, and understand what’s happening at a more micro level.
A little knowledge is a dangerous thing, nowhere more so than in property investment.
Terry Ryder is the founder of hotspotting.com.au
Terry Ryder
Terry Ryder is the founder of hotspotting.com.au.