Where Is The Smart Money Moving To In Proprety Investment

August 18, 2015
Yew Kong Lye

 Best Advice Ever


A wise man once said "Buy the worst house in the best street" That is gold and how true is that? Assuming that your strategy is to buy hold, the investment would be an utter failure if there's no capital growth over the investment period. The reverse is true if capital growth is maximised.


So, where is the smart money moving to


There are principles that dictate how property appreciates and a lot of it has to do with where it is located At the moment, the smart money is moving to the city in the image. Do you recognise the city? For those who know, give yourselves a pat on the back and a million points. Yes, the city is Brisbane.


Why Brisbane?


  • Strong Forecasted Population Growth-Brisbane population is expected to grow by 788,000 people for period 2013 to 2028, a nearly 35% increase on 2013 figure, only next to Perth in terms of growth (Source:ANZ)
  • Stronger Per Capita Infrastructure Spending Over The Next 7 Years-more than 70% per capita compared to NSW and 200% for VIC (Source: 2014/15 Commonwealth of Australia budget)
  • Better Value for Owner Occupiers-Brisbane median property price is 6x multiples of median average household incomes while Sydney is running at 10 and Melbourne at 9.
  • Shorter Period of Time to Save for a Deposit
  • Better Cash Flow Returns for Investors- rental returns in excess of 5% for houses and units is possible in Brisbane
  • Positive Price Growth After a Period of Sideways Movement-Brisbane property prices have moved sideways from 2008 to 2013 with increasing yields, a classic sign of price moving upwards. There are little signs that there is a price break out in 2014


The Current Lending Landscape For Property Investment


To curb fast incresing property prices which makes it a challenge for first home buyers, APRA has been applying pressure on the banks to rein in on their investment lending. As a result, we have seen banks take various actions, namely:

  • Stop discounting on investment property loans
  • Reduce LVR on investment properties
  • Increase rates on such products
  • Some have abandoned this market segment


Time Is Running Out


Property investment is a function of time, the longer you're in the market the greater will be your growth. Before the banks make it tougher to borrow money to invest in real estate, you should do your home work or speak with your financial planner while opportunities are still there. 

Call 0399430189 or 0413 871 888 to find out how to you go to where the smart money goes.



Posted in: Property investment

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