September 27, 2016
by Michalina Lisik

IA’s Infrastructure Priority List updated following positive assessment of four business cases – Urbanalyst

IA's Infrastructure Priority List updated following positive assessment of four business cases

Infrastructure Australia, the nation’s independent infrastructure advisor, last week announced it has updated its Infrastructure Priority List following the positive assessment of four business cases. 

The Infrastructure Priority List identifies nationally significant projects and initiatives in every state and territory. The List is continually updated as the Infrastructure Australia Board receives and assesses new business cases from project proponents. 

Infrastructure Australia Chief Executive, Philip Davies, said the Board had positively assessed business cases for:

- Bruce Highway Upgrade (Caloundra Road to Sunshine Motorway) – QLD;

- M1 Pacific Motorway – Gateway Motorway Merge Upgrade (southbound lanes) – QLD;

- Eyre Infrastructure Project (Iron Road) – SA; and

- North-South Corridor (Darlington Upgrade Project) – SA.

“Infrastructure Australia is currently assessing a record number of business cases as Australian governments and industry embrace the need to better align project proposals with an identified infrastructure need,” Mr Davies said. 

“Assessing a project for inclusion on the Infrastructure Priority List follows a rigorous process. This enables us to give decision makers the information they need to invest in the best infrastructure projects for our growing communities. 

“Our assessment process involves interrogating the individual costs and benefits of a proposed project to determine whether it has the potential to meet an identified infrastructure need. We also assess the project’s strategic fit, deliverability and economic, social and environmental impacts.

“Adding these projects to our Infrastructure Priority List as Priority Projects demonstrates that each of the projects are sound investments that address an issue of national significance. 

“Upgrading the Caloundra Road to Sunshine Motorway section of the Bruce Highway that is vital in connecting regional centres and enabling significant freight movement within and between regions. 

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September 27, 2016
by Michalina Lisik

Major Bank Lending Changes to Benefit Borrowers – Your Investment Property

Major Bank Lending Changes to Benefit Borrowers

The relaxation of the lending policies at Westpac, CBA and St George are expected to jumpstart property purchases by small and medium-sized enterprise (SME) owners. 

All three banks lowered the requirement for SME borrowers to present two years’ worth of financial records as income verification, reducing this down to one year’s worth. Moreover, borrowers no longer need to present their tax returns. 

Westpac and CBA also increased the lending capacity percentage for SME buyers to 90% (from the previous 80%) of the purchased property’s value. 

Such initiatives are important because “in the past, banks have viewed the SME demographic as risky, despite many owners coming from strong corporate or trades backgrounds with a long successful working history in addition to strong equity in various investment classes,” said Joel Wyld, member of the Mortgage and Finance Association of Australia.

“Many SME owners have had to settle for low doc loans for a two year period which has deterred them from purchasing property.”

Wyld has also observed a trend in which property is utilised as a vehicle through which property trusts and partnerships are cemented.

“Both of these structures have a place in the market but care must be taken when assessing income of a business if multiple owners are involved. Legal advice is also advised to minimize issues in future years,” he advised.

With the simplification of the loan application process, all that’s left for self-employed borrowers to do is to adhere properly to the existing guidelines. 

Wyld’s top tip is to ensure that one’s financial records are updated and accurate, because a mistake could make or break the application. 

“The time is now ripe for SME owners to capitalise on the new lending rules to secure either a dream home or business premise,” he said. 

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September 27, 2016
by Michalina Lisik

Construction Approvals For Capital City Dwellings Bounce Back in July – Your Investment Property

Construction Approvals For Capital City Dwellings Bounce Back in July

The latest data from CoreLogic revealed 17,380 capital city dwelling approvals for July 2016 – the highest number of approvals since October 2015 and the third highest on record. A potential apartment oversupply and increased risk for off-the-plan settlements were not enough to deter this substantial rebound. 

More than 6,000 houses and 10,000 units were approved for construction across the combined capital cities. Melbourne posted the highest number of approved dwellings over the year to July 2016 at 57,428. However, this was lower than -0.2% over the year. This was followed by Sydney with 54,667 and Brisbane with 30,901 total dwelling approvals. 

According to CoreLogic research analyst Cameron Kusher, the approvals in capital cities remain unquestionably strong.

“It will be interesting to see just how many of these approvals immediately progress to commencement and ultimately through to a completion given tighter lending conditions imposed on both developers and purchasers for off-the-plan units,” said Kusher.

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September 27, 2016
by Michalina Lisik

The “Aldi Effect” Transforms Property Market – Your Investment Property

The Aldi Effect Transforms Property Market

Australian property owners who have homes or investments near German budget supermarket Aldi could have very valuable homes on their hands. 

According to a study conducted by mover and conveyance service My Home Move, the opening of a new Aldi branch has almost always sparked an incredible surge in the prices of nearby properties in the UK. 

In fact, the value of Chipping Norton, the previous home of ex-British Prime Minister David Cameron, soared by 133% after Aldi set up shop. 

“Our own research has shown that a third of home movers chose their new property based on its proximity to shops and local amenities – and as such we are not surprised that the recent popularity of Aldi, with its cheaper lines and award-winning products, has had a positive effect on the value of local homes,” said Doug Crawford, chief executive of My Home Move. 

The findings of this study confirm that dwellings near amenities and infrastructures are generally in high demand because of their convenience they provide, adding to their worth. Thus, investors would do well to aim for such properties to maximise value for money. 

However, Crawford does note that an over saturation of Aldi branches in an area could have the opposite effect on the property market. 

“The only exception in our research was Reading, where prices have dropped – but with three stores within a two mile radius of the city centre it may be that consumer demand has now been met,” he said. 

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September 26, 2016
by Michalina Lisik

Housing report points to a lift in local market – The Queensland Times

Housing report points to a lift in local market

The ripple effect of south-east Queensland’s relentless growth and urban sprawl has Brisbane’s outer western corridor shaping up as the region’s “final frontier” for affordable and well-connected housing. 

A new Urbis report, The Future of South East Queensland Housing, forecasts the Ipswich Local Government Area will reap the lion’s share of population, job and housing growth as jobs decentralise from the Brisbane CBD and housing demand shifts to more affordable locations. 

Author Angus McLean said inner Brisbane’s physical constraints and lack of affordable housing were already driving investment and people to infrastructure and amenity-rich satellite cities such as Greater Springfield and North Lakes, which would soon funnel into the dynamic Ipswich region. 

“South-east Queensland is already seeing the beginning of this shift- a desire for housing that maximises quality of life and minimises the cost of living, offering competitively priced housing opportunities in well-located destinations with proximity to amenity and infrastructure,” he said. 

Mr McLean said Ipswich was shaping as such a destination with its population set to more than double to 670,000 over the next 20 years, the biggest population growth in the south-east corner. 

“Increasing by more than 130 per cent over the next 20 years, the Ipswich LGA will play a vital role in satisfying the future population growth of south-east Queensland” he said.

This surge of new residents to Ipswich and its surrounds will generate south-east Queensland’s highest level of housing demand with 6600 new homes needed each year, while jobs growth is expected to more than double to 2.6% per annum, far outstripping any other LGA in the region. 

Mr McLean said while the median house price in the outer wester corridor had grown a solid 2.8% to $325,000 in the past year, it was still the most affordable housing stock in south-east Queensland and compared very favourably with Brisbane LGA’s median of $620,000.

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September 26, 2016
by Michalina Lisik

Vacant Land Prices In Capital Cities Climb – Your Investment Property

Vacant Land Prices in Capital Cities Climb

Combined capital city selling prices increased by 8.1% over the past 12 months, with the median vacant land selling price recorded at $270,350 across the combined Australian capital cities. 

However, it was the other way around for regional areas as vacant land prices fell by -1.9% over the year. 

The median selling price now sits at $164,250 – 65% lower than the median price in capital cities. This is the largest differential since September 2003.

According to CoreLogic, the rate per square metre for vacant land increased by 4.3% across capital cities, while it fell -17% across regional areas. This means that capital city vacant land is now 231% more expensive than vacant land in regional areas – the largest differential on record. 

“While it’s no surprise that the cost of vacant land in Sydney is significantly higher than in all other capital cities, of note is just how strong the increases in land prices have been in Sydney and Melbourne over the past year, with rises in excess of those for home values,” said Cameron Kusher, CoreLogic head of research. 

“An increase in the amount of land available for development, as well as lower fees and charges applied to land development, and more competition amongst developers would likely reduce land costs. Potentially, this would slow the escalation in housing costs, particularly in Sydney and Melbourne. 

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September 26, 2016
by Michalina Lisik

Chinese Buyers Could Spark “An Economic Catastrophe” – Your Investment Property

Chinese Buyers Could Spark "An Economic Catastrophe"

Fears of a looming apartment fall may be compounded by the mass failure of Chinese apartment buyers to settle their apartment contracts. 

Robert Gottliebsen, business columnist at The Australian, said recent bank-led changes to loan criteria for foreign buyers could leave many overseas property investors from China exposed. 

“If the Chinese fail to settle [their property purchases], then there will be a deep problem,” said Gottliebsen. 

He even added that the problem could “develop into an economic catastrophe.”

Gottliebsen explained that most apartment developers use their collected Chinese off-the-plan deposits to gain security for a bank loan. The bank loans can make up 40% to 60% of the total cost of the apartment complex. 

“This is an area of finance which we know very little about because it is hidden from public view. The banks feel they are safe in the loans to developers because there is a big difference between their loans and cost of the buildings,” he wrote. 

“But the banks are often funding other players in the apartment development. Apart from the developer, the people at risk include unsecured suppliers and the enterprises that are providing the second mortgage funding.” 

Gottliebsen said that if the apartment disaster takes place, Australia might face settlement failures of at least $1 billion a month for 12 months. 

“Just as the collapse of the mining investment boom ravaged the economy, we must gird ourselves for another potential disaster,” he warned. 

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September 26, 2016
by Michalina Lisik

First Homebuyers Rely on Parents to Secure Loans – Your Investment Property

First Homebuyers Rely on Parents to Secure Loans

As dwelling prices continue to rise across the country, more first homebuyers are looking to their parents and immediate family members to act as guarantors on their home loans. 

The results of the annual First Home Buyer Survey conducted by Mortgage Choice revealed that in 2016, the percentage of buyers who had family acting as guarantors was 4.9%, representing an increase of a full 1% since 2015. 

Given current conditions, John Flavell, CEO of Mortgage Choice, said this increase was to be expected.

“This slight jump in demand for home loan guarantors is unsurprising when you consider that property prices have risen fairly substantially across most property markets over the past few years. Many first home buyers are finding it difficult to put a foot on the property ladder without some form of financial support,” Flavell said. 

These figures represent one in 20 buyers using a guarantor, wherein a lender is granted permission to take out a mortgage over a property owned by the guarantor, in addition to the borrower’s own property. 

Under this arrangement a lender gets additional security loan, while the borrower gets access to a loan they might not ordinarily quality for, through the guarantor’s financial support.

Guarantors can later request to be released from their responsibility, once the buyer has generated adequate equity in their purchased property.

“By having a family member go guarantor on a home loan, first home buyers are not only able to get their foot on the property ladder sooner than later, but they can also potentially avoid paying Lenders Mortgage Insurance,” Flavell said. 

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September 26, 2016
by Michalina Lisik

Move over, Sunnybank: Rochedale is the new hot spot – Domain News

Move over, Sunnybank: Rochedale is the new hot spot

Rochedale is fast becoming the “new Sunnybank” as families local to Brisbane’s most vibrant Asian community trade up their old homes for something brand new. 

It’s the last suburb in Brisbane before you hit Logan but Rochedale, formerly a sparsely populated farming community, is now home to more million-dollar listings than Bulimba and Coorparoo. 

These properties are not on the river or close to the CBD – Rochedale is about 17 kilometres south east of the city – and most of them sit on an average block size of 450 square metres. 

What Rochedale does have, however, is proximity to Sunnybank, home to Brisbane’s biggest Asian community – and according to local agents, it’s this community, as well as foreign Chinese buyers, who are currently driving Rochedale’s property prices. 

Remax agent Cathy Cheng said it’s a perfect example of the “ripple effect”.

“Sunnybank and Eight Mile Plains have always been very popular with Asian people but a lot of the houses there are getting older. It’s also become more expensive,” she said. 

“So they are looking a little further out and really like Rochedale because they can get a beautiful new home not far from the community and facilities that they know.”

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September 26, 2016
by Michalina Lisik

Sydney’s infrastructure changes mapped from above – Australian Property Investor

Sydney's infrastructure changes mapped from above

It’s been nearly 60 yours since Sydney’s transport infrastructure last experienced a major upgrade and yet, since then, the population has more than doubled, recently surpassing the five-million milestone.

Developments like Sydney Metro Northwest, Sydney Light Rail and WestConnex have been put in place to future-proof Sydney, preparing it for the predicted population boom and working towards creating an interconnected metropolis for many generations to come. 

While these projects are critical to the future of Sydney, they’ve been at the forefront of much public debate. 

Mark McCrindle, futurist, demographer and social commentator, believes that while local communities may be inconvenienced during the development phases taking place across Sydney right now, it’s important to look at how essential these developments will be for future generations. 

“There’s no doubt that Sydney is rapidly expanding. In fact, an estimated 1.2 million homes will need to be built in order to sustain this level of growth,” he says. 

“It’s important that Sydney, as a community, thinks long-term about how these major infrastructure projects are needed to create an interconnected and sustainable city to support generations to come,” he adds. 

“Continued effective planning and communication from local councils, with the community held as the first priority, will also be critical to successfully managing the construction phases of these infrastructure projects.”

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