Canberra investors lead in loans, where should they buy? John McGrath
The latest figures from the Australian Bureau of Statistics show the value of new loans to investors (excluding refinancing) across Australia jumped by 4.7% in July – the highest monthly gain since September 2016.
On the east side of the country, Canberra led the way with a 22% spike in the value of loans from June to July, followed by Queensland at 8.1%, Victoria at 5.7% and NSW at 2.0%.
John McGrath told Switzer readers, "my best piece of advice for property investors is to buy quality and focus on location and aspect."
"Go for a quality property in a great street, in a desirable neighbourhood, with plenty of amenities such as cafes, shops and public transport. These properties might cost a bit more, but you’ll get better capital gains."
"I also recommend drive-by investing – purchasing in a suburb close enough to home or work so you can get to your property easily."
"In terms of locations, I think a good strategy is buying close to new infrastructure. There is so much building going on and this is creating opportunities for investors to capitalise, especially in areas where prices have fallen during the downturn," he added.
As an example of buying close to new infrastructure he analysed the impact of the Canberra Metro light rail.
Impact: The 13-station light rail line connects the city with the inner north and outer north Gungahlin region. Services run every 6 minutes in peak hour. The suburbs with stations include Braddon, Turner, Dickson, Lyneham, Downer, Watson, Harrison, Franklin and Gungahlin.
Opportunity: Great time to buy along the line, targeting properties within a 10-minute walk of stations. Median prices in Franklin, which has three stations, peaked in 2017 at $748,500 for houses and in 2015 at $409,500 for apartments, according to Hometrack Australia data. The medians today are $683,500 and $367,250 respectively, according to CoreLogic.
Closer to the city in Lyneham, the median price has dipped from $860,000 in 2017 to $756,000 today for houses and from $456,500 in 2015 to $395,000 today for apartments.
Prediction: CoreLogic-Moody’s Analytics predicts 9.2% growth for houses and 8.2% for apartments across Canberra over CY20 and CY21.
He also looked at the latest Melbourne, Brisbane and Sydney infrastructure developments and the impact they have had and will continue to have.
JOHN MCGRATH is the Founder & Executive Director of McGrath