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The Tipping Point

Posted by Paul Wilson

There is no shortage of industry opinion advocating that we are about to recognise a tipping point in the property market. While the majority of investors are sitting on their hands waiting for the herd to start moving, there is another group of Investors who will be enjoying the success of the decisions they are making to acquire more properties while the buying is exceptionally good.

Here is an example of some of the buys from November that will be putting a gold lining into our clients portfolios and increasing their financial choices as they take advantage of the negative market sentiment.

Duplex Pair in Queensland driving distance to Brisbane Purchase Price $350,800 combined rent $440 giving a 6.5% return strong rental growth potential combined with a strong capital growth location and a potential gross equity gain of approx $120K. This property was also built after 1987 giving the added benefit of further deductions in building depreciation.

Brick 8 year old 3 bed home driving distance to Brisbane Purchase Price $245,000 current rent $270 per week great return, with capital growth and rental increases as well as strong depreciation and 630m2 block of land.

Duplex Pair in SA Purchase Price $212,000 combined rent $280 per week and the added benefit of being able to strata title and positioned well for further growth.

3 bedroom home only 2 ½ years old Purchase Price $295,000 rent was $450 pw but went up to $700 pw at settlement giving a return of 12.3%

Low interest rates, lower house prices and incentives for first home owners is going to create a tipping point that will drive up the demand for homes in the typical investor markets and also increase their prices in a very short period of time. In very basic terms A buyers market turns into a seller’s market when the demand of people entering the market increases. There are already signs that this is starting to happen as experts start to identify that we are at the bottom of the cycle.

While the market conditions are in the buyers favour use this Christmas period to make sure you are positioned and market ready, spend some time speaking with your We Find Houses Personal Property Consultant to make sure you are in the loop to take action when the next great property opportunity comes along.

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