Many commentators are heralding 2010 as “The Year of the Investor” with established borrowers re-entering a bullish market encouraged by a decrease in competition. According to the recently released BIS Shrapnell Long Term Forecast, investors have every right to be confident with dwelling investment being one of two key factors that are set to drive the recovery of the economy in the near term.

Another positive for investors was the phasing out of the Government’s First Home Buyers Boost late last year which has prompted many potential first time property owners to stay in the rental market – further driving up demand. Short supply means rising rents, according to Australian Property Monitors Economist Matthew Bell, “On the supply side of things, there simply aren’t enough new properties being built for investment purposes to meet this increased demand. Increased costs for landlords in the form of rising interest rates and rising land taxes due to increasing land values, should mean that asking rents will start to increase steadily throughout 2010.”

What it means for the Perth market

According to APM’s Rental Market Report, Perth property investors could be in for a win with median house rents tipped to rise from $360 to $400 per week – an increase of 11%. “An improving employment outlook means, overall, renters will be more willing and able to afford rental increases,” Economist Matthew Bell said. “Both Brisbane and Perth are poised to outperform the rest of the country as their property markets play catch up to Sydney and Melbourne.”

The Perth market in particular is set to go from strength to strength this year on the back of the current mining and energy boom. We’ve seen in the past that a strong resources sector tends to be positive for the state’s property market and with over $270 billion worth of projects earmarked to begin in 2010 real estate in the metro area is proving to be an attractive investment prospect for local and international investors.

What are your thoughts? Will 2010 be “The Year of the Investor”?

Perth is in the midst of a resources boom led by “…China’s stockpiling of commodities and…the Gorgon LNG project” the report claimed. And although Perth’s rental vacancy factor is higher than other capital cities there are signs that it is “tightening”. That’s good news for investors.

Driven by buoyant job prospects the population in WA is expected to surge. As it does, demand for accommodation will put upward pressure on rents making investment in the West more attractive.

The report went on to recommend that the best property types to buy in Perth was “middle-ring beachside suburbs, and the inner south and west adjacent to the CBD.” Just why Wakelin’s chose these property types was not made clear.

Here are a few tips that will make the process of buying your first home smoother.

Research!

The key to making wise real estate decisions is research. Arming yourself with knowledge can ease the process and prevent you from making a costly mistake.

• Learn as much as you can about the real estate market
• Research the suburbs you’re interested in and keep track of what other properties have sold for
• Keep an eye on interest rate information
• Get clued up on the government’s first homebuyer grant
• Find out about other relevant government incentives

Get your finances sorted

Your finances need to be in order before you even think about purchasing a property. Having a clear idea of how much you can spend will dictate your monthly repayments and the deposit you’ll need. Remember – the more deposit you have, the less you’ll need to borrow which means you’ll be paying off your first home sooner.

It’s also a great idea to talk with a mortgage broker or your bank manager to get some professional advice – an objective outsider can suggest things you may not have thought about.

Once you’ve established a budget, getting a home loan pre-approved will ensure the home buying process moves along quickly and easily. It also takes away the possibility of spending more than you can afford.

Finding a home

Once your finances are sorted you can begin the search for your new home. Some important things to consider are:

• Price – make sure you stick to your budget
• Location, location, location
• Proximity to amenities, schools and public transport
• The type of property (an apartment, house or villa for example)
• Condition – are you looking for a “fixer upper” or something new?
• The surrounding neighbourhood

Finding the right first home may take time so don’t expect to find something straight away. Buying a home is the biggest financial decision you’re likely to make. Don’t feel pressured to buy the first property you look at.

Don’t forgo the inspections

A costly, yet easily avoided mistake is not getting a building report or pest inspection done prior to making an offer on a property. While you’ll need to spend some of your budget to get these inspections carried out it’s well worth knowing about any potential problems up-front.

Beware of extra and hidden costs

Hidden costs, or ones that aren’t fully known until later in the buying process, can catch some first homebuyers off guard. Make sure to set aside some money for costs such as -

• Government fees
• Stamp duty
• Legal and conveyancing fees
• Property valuation fees
• Insurance
• Moving costs
• Connection of utilities
• Council rates

What tips can you share from your first home buying experiences so far?

Photo credit: http://www.flickr.com/photos/brighton/ / CC BY 2.0

But how times have changed. Less than 18 months later the market has once again surged.

It’s back in the black with plenty predicting more good news to come.

Compared to the rest of Australia – and despite a massive resources boom – WA is an under-performer. That’s if you can call an annual growth of 14.3% under-performing. Some expect the combination of higher interest rates and lower first home buyer grants to slow the market.

But others are more upbeat pointing to strong population growth and improving employment prospects as potential market drivers.

What are are your thoughts? Which way is the Western Australian property market heading in 2010?

REIWA’s preliminary data for the December quarter shows median house prices up 14.3 per cent from December 08 to $480,000.

Mr Bourke attributed strong property growth to a change in the market from first-home buyers to trade-up buyers.

“2009, as a result of the First Home Owner Boost, saw 42 per cent of all sales being first-home buyers and of course they buy in the under $500,000 market so the median price moved down.

“As they’ve slowly left the market and the next wave of buyers, the trade up buyers, have moved in, buying in the segment between $600,000 and $1 million, the median price has moved up to reflect that they are now the most predominant buyer in the market.

“2010 is going to be the year of the trade-up buyer.”

Mr Bourke claimed that one of the key drivers of price growth has been the ongoing shortage of land, which increases demand for existing accommodation.

Real Estate Institute of WA president Alan Bourke said the RBA might have to increase rates by up to 0.5 of a percentage point in the next six months if the economy continued to grow strongly.

“This… would seem likely, so home owners should understand that this pause in rate rises may not last, and those people with mortgages should take steps to budget for any further increases and keep an eye on their spending,” he said.

And whilst President of the national body of agents, REIA believes that the RBA decision is good news a number of other commentators are pointing to the risks of a imminent housing bubble.

What effect do you think the RBA’s decision will have on the market? When do you expect rates to rise again?

Have they done the right thing? What are your thoughts?

Posted via web from Peter Fletcher

Posted via web from Residential Settlements