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The Chinese sharemarket collapse in which $3.7 trillion has been wiped off the value of stocks in three weeks - Onside Property Property News Update

The Chinese sharemarket collapse in which $3.7 trillion has been wiped off the value of stocks in three weeks could see a flight to the relative safety of Australian property, experts believe.

And top prestige sales agents say the plunging Australian dollar has created a "perfect storm", making Sydney's prestige property more attractive than ever to wealthy Chinese.

With panic setting in as the Shanghai Composite has dropped 30 per cent since the middle of June - the biggest three-week fall in 20 years - Chinese investors could soon be beating down the doors of off-the-plan penthouse marketers, and even owners of established property.

"I think the fact it has fallen so sharply will make investors in China think about alternatives and one of those alternatives will be Australian property," St George Bank chief economist Hans Kunnen said.

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HSBC chief economist Paul Bloxham concurs. "Australia is seen as a safe place to invest that has strong growth opportunities," he said.

"There are opportunities for Chinese investors to diversify and if they are looking for foreign investment opportunities we will see more interest."

The principal of Sydney Sotheby's International Realty, Michael Pallier, said the collapsing Shanghai sharemarket was already having an impact.

"A lot had already taken money out of the stock market because it was getting just too hot," Mr Pallier said.

"And with the dollar being so low it's created a perfect storm - they're taking money out of something volatile into something that's safe."

Mr Pallier said he'd sold new apartments in the city to Chinese buyers last week "for that very reason" and he was showing mainland Chinese buyers through a $13.8 million house in Sydney's exclusive suburb of Double Bay that he'd just listed. "He's already just bought a double-digit property and wants another one for his sister, who is coming out here to live," Mr Pallier said.

The managing director of off-the-plan apartment marketers CBRE, David Milton, who already sells a large amount of property to overseas Chinese investors is seeing only blue skies ahead.

"Those who had been investing more in equities will see there are real risks and Australian property is much safer," he said.

"If they are making more money in China, they tend to invest money there, but now that's not the case they will move to a safe environment like Australian property."

He could see implications for businesses such as his, but also Australian property generally.

"A lot of the Chinese that are buying have Australian residency, but their money comes from China," Mr Milton said.

The president of the Real Estate Institute of NSW, Malcolm Gunning, says whereas most Chinese money would flow into new property, some investors would work with family in Australia to buy existing property. "Because of their strong family networks and syndicates," Mr Gunning said.

"They buy as a collective all the time on some of the larger properties.

"If it comes in quickly it will come in through existing citizens."

He said the collapse could also see more Chinese applying for the $5 million Signficant Investment Visa, which grants them a quick path to Australian residency. The investments need to be in government-approved shares but they also end up buying exclusive properties in suburbs such as Point Piper or Toorak.

Domain Group senior economist Dr Andrew Wilson said China's sharemarket issues will have some positive implications for those selling Australian property.

"The Chinese are learning some lessons in capitalism so they're no doubt looking for an environment that has a friendly circumstance about them," Dr Wilson said.

"It can only exacerbate their interest, particularly in Sydney," he said.

Abergeldie Estate - Sought after and a buyers dream - Dulwich Hill Real Estate - Onside Property

Dulwich Hill developed as a desirable residential district with a small village shopping centre and isolated industrial hub. 

It is a suburb shaped by twentieth-century subdivisions. Dulwich Hill has retained a village atmosphere, even with the late twentieth and early twenty-first century developments where former factory sites have been redeveloped for large apartment complexes. 

These complexes are themselves small villages within the suburb of Dulwich Hill. And thus now as you travel along Liverpool road it is more evident. 

Demand from buyers who want Dulwich Hill homes in the Abergeldie Estate is on the rise and buyers are ready to pay premiums for this ideal lnner West location, since there have only been a few sales within this Estate these areas would be IDEAL FOR SALE BY AUCTION THIS SPRING!

CALL THE NUMBER ONE SELLING AGENCY TODAY AND PREPARE YOUR HOME WITHIN THE ABERGELDIE ESTATE FOR THIS SPRING 2015!! 

What do you think your property is worth? 

Well add another 10-25% ! Because that's what you will get! 

Hurry this sellers market only comes around every 7-14 years! Its your time to make $$ on your property investment. Don't miss the boat!

We will provide a 100% sale record and hit rate for this area.

Call Onside Property today 1300 938 931

or info@onsideproperty.com.au

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The Abergeldie Estate Heritage Conservation Area (HCA) in Dulwich Hill is bounded on the west by Old Canterbury Road, and then proceeds to the rear of the properties facing Elizabeth Avenue, following the low lying area of a former creek bed to the east side of the properties facing Dixson Street. The boundary follows the rear of the properties on the east side of Dixson Street following the slope up the hill to meet Old Canterbury Road. 

Abergeldie history 

Sir Hugh Dixson (1841–1926), tobacco manufacturer, purchased the Abergeldie Estate in 1885. It consisted of 22.5 acres (9.1 hectares) of land and the house. Dixson developed the estate, planting fine gardens with exotic botanical species, and building a hot house, a conservatory, a small piggery, stables, a dairy and later, a garage for his luxury motor vehicle.

Sir Hugh Dixson was a staunch supporter of the scout and guide movement. The Dulwich Hill scout troop was called Mrs Emma Dixson's Own, after his wife. Dixson built a hall for the scouts in Lewisham Street, Dulwich Hill. In 1924 the opening ceremony of additions to the hall was attended by the New South Wales Governor, Sir Dudley de Chair and his wife. A large gathering attended the opening with a scout procession up Marrickville Road to Abergeldie, where the Governor's party attended displays by both scouts and guides.

Sir Hugh Dixson died on 11 May 1926 in Colombo, Ceylon (now Sri Lanka). The property and the spectacular collection of objets d'art, furniture and collectables were left to his children. They did not want to live at Abergeldie, which was about 50 years old. The Dixson Trust proposed to demolish all of the buildings on the estate, subdivide the land and auction the house contents.

There was an immediate outcry among local representatives of the community, who formed the Abergeldie Garden Campaign Committee. Support was obtained from the local councils and members of parliament. The Premier of New South Wales, JT Lang,was petitioned to resume the property as a national park.

The Abergeldie Garden Campaign Committee argued that a public garden was urgently needed due to the gradual industrialisation of the area. The well established gardens and trees that existed on the Abergeldie Estate provided a potential park that other places could not achieve in under 30 years. The campaign failed, as did a revised bid for the premises to be developed as a hospital.

The Abergeldie Estate was subdivided and the house demolished. It was the last extensive subdivision in the Marrickville local government area.

Why the economists keep misreading the real estate market? Onside Property Dulwich Hill News

Onside Property Dulwich Hill Real Estate News - Paul Salsano 

PH:1300 938 931 - info@onsideproperty.com.au

Property forecast? What are the experts really trying to say?

AMP’s chief economist Shane Oliver says “Australian property prices are over-valued” and that “rising house prices” are making Australian households vulnerable. Should we be concerned? Should we be listening at all?

I’d suggest a resounding 'No' is an appropriate response.

Oliver’s analysis is so shallow it borders on embarrassing. It relies in part on a discredited report that no one in real estate takes seriously. But above all else, the man’s track record in reading real estate issues is among the worst in the nation.

In his position with AMP, Oliver has been getting it wrong consistently for the past dozen years.

How about this offering: Australian real estate has a “classic real estate bubble” and first-home buyers are being priced out of the market, notably in Sydney.

When did Oliver say this, predicting a bursting bubble and the disappearance of first-home buyers? It was way back in 2003. Since then, over half a million first home buyers have bought homes in New South Wales, most of them in Sydney. And despite three years of extraordinary growth from 2001 through 2003, there was no collapse in prices when the boom ran out of puff.

How about this one: House prices are at least 25% over-valued and may not start to rise again for another decade. It will take 10 years for rents and wages to catch up with house prices and there will be no rise in the housing market until they do so.

This pronouncement was made in 2005. A decade has passed and in that time capital city house prices have risen in eight out of those 10 years (based on the ABS House Price Indexes).

In fact, in 2006, the year after Oliver predicted prices would not rise for another decade, they rose 8.3% - and then 12.3% the following year. How could someone in such a senior position misunderstand the situation to such a degree?

Then in June 2012 he wrote about Australia’s “chronically weak house prices” and suggested we were facing either a crash or a long-term flat trend, caused by “excessive house prices and the excessive level of household debt”.  He said: “The bad news is Australian housing is still way over-valued”.

So what happened?  The following year, in 2013, capital city house prices rose 9.3% on average and then another 6.8% in 2014 (although most of that growth was generated by Sydney’s solo boom).

How does he keep misreading the real estate market so drastically? And why does media keep publishing his views?

The problem Oliver has, and he shares this problem with most of Australia’s underclass of chattering economists, is that he tries to squeeze real estate into his economic models. It’s an interesting study of someone trying to jam a square peg into a round hole, and if the hole doesn’t fit, there’s something seriously wrong with the peg.

Oliver latest pontification on real estate prices – comparing where they are with where he thinks they should be - is based in part on an alleged median multiple. Median multiples are the kindergarten of property price models.

I say “alleged” median multiple because Oliver has based his assessment on the Demographia report – which is a propaganda piece from a developer lobby group, designed to find that all of Australia is unaffordable because we over-regulate property developers.

His argument is based on the notion that Australia has a problem with rising house prices, when the latest figures depict six of the eight capital cities with prices stagnating or going backwards.

There’s also the contention that we’re all vulnerable because house prices are rising “well above trend”. But take Sydney out of the equation and the scenario looks very different.

We’re entitled to expect better from a national figure who lectures on real estate issues.

www.onsideproperty.com.au

Sydney entering the golden decade - Onside Property Dulwich Hill News

Sydney is entering a "golden decade" of housing growth, with no bubbles in sight, according to Stockland, one of the biggest residential developers in the country.

Chief executive Mark Steinert said the "gross" undersupply of homes will not see Sydney hit market equilibrium for at least another five to six years.

Speaking at the Committee for Economic Development of Australia (CEDA) function in Sydney on Thursday, Mr Steintert  said while affordability was definitely an issue, the undersupply of housing in Sydney and, to a lesser extent, Melbourne was "mission critical".

"I do not see that Sydney has a property bubble and the state is not susceptible to 'pop' any time soon," Mr Steinert said.

"The issues that must be addressed are changing the 'not-in-my-backyard' mentality,' where developments are proposed but then face community opposition. That causes major delays in getting new projects approved.

"Of course, we welcome community consultation but it elongates the process.

The new Stockland housing development in Craigieburn, in the outer northern suburbs of Melbourne.Photo: Erin Jonasson.

"Once that outlook is altered, we can address supply and that will then lead to addressing the affordability problems."

Mr Steinert, who is the new president of the Property Council of Australia, said  within NSW the markets differed, with the Illawarra region showing solid growth in demand and pricing, Sydney is about high density in the city, while the Hunter Valley has been slow.

Stockland has focused on boosting its residential business in the past decade, and this year alone has announced a proposed $4.6 billion development at Kalkallo, in Melbourne's northern growth corridor. This was in addition to the announced acquisition of residential-zoned land at Scarborough in Brisbane for $67 million, and at Clyde North in the urban growth corridor of Casey, south-east of the Melbourne CBD, with a development cost of $128 million.

The land acquisition reflects the group's ambitions for expansion in residential development.

Mr Steinert said the group's new masterplanned community at the heart of the northern growth corridor in Melbourne would eventually become a city in its own right.

"The various state governments are also helping with release of land supply for redevelopments along with new infrastructure, lower interest rates and general economic stability," Mr Steinert said.

"The property sector is one of the larger taxpayers in the country, so it's important to have efficiencies and increased productivity."

He told the 300-strong property crowd that diversity of housing is also needed, and that comes down to planning.

"NSW must catch up. Our smallest property size in NSW is 280 square metres, Victoria is 104 square metres, Queensland 118 square metres and WA is 188 square metres. Australia is a high-cost producer but our productivity is low."

John Mulcahy, chairman of Mirvac Group, has echoed the same sentiment, also saying he did not see a housing bubble in Australia.

Source: SMH

Real Estate news 

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First home buyers in their 30s still need parents help - Onside Property News

Customers in the Northern Territory and Tasmania accessed the NAB Family Guarantee the most, with 14.3% and 12.1% respectively of first home buyers taking up the offer in 2015.

The NAB Family Guarantee allows customers to use money, placed in a term deposit account, to support a fellow family member to buy, while allowing their family members to earn interest in a term deposit on the money they provided as security. NAB informs customers about the risks associated with acting as a guarantor.

NAB's family guarantee product allows family member to limit their exposure to a proportion of the loan, rather than the whole loan.

Family members' exposure was often around 20% of the loan, the point at which banks no longer require mortgage insurance.

r figures show this product is increasing in popularity because it allows parents to gain from their support for their child’s home loan,” NAB executive general manager consumer lending, Angus Gilfillan said.

The bulk of customers using the NAB Family Guarantee so far in the 2015 financial year were aged 20-29 (73%), but there was also a large portion were aged 30-39 (21%).

Data shows some customers are in their 30s or 40s when they buy their first home, while at the other end of the spectrum we have also seen 3% of first home buyers using the NAB Family Guarantee this year in their teens.

www.onsideproperty.com.au

Onside Property Investing Tips - Sydney Real Estate

Researching Potential Property Deals 

Before jumping into a new property purchase, extensive research should be done. As an investor if you are already intimately familiar with an area and a property, then you may be able to jump on a property deal before the next buyer can snatch it up; however, if you are unfamiliar with the location, you need to do some research first.  

Research can be conducted in a few different ways. The first thing to do is to get to know the area. You can start with some internet research, looking up local neighbourhood information, tenancy rates, population growth statistics and local council activities. 

The internet is full of useful statistical information, too, such as data on tenancy rates, rental returns and location-specific demographics. Be sure to research the region and the property not from your own personal perspective, but more importantly, from the perspective of your tenant. Who is going to be renting your investment property? 

Who is the tenant, and what are they going to be looking for in a property? 

These are the things that you must consider when you research a particular area or property. Many people mistakenly focus on the ‘bells and whistles’ of the property, but the cosmetic features of any investment should take a backseat to the fundamental supply and demand that exists. 

Look at the demographic of your neighbourhood and ask ‘What does your likely tenant want in a property’? 

Not only that, you need to be guided by the investment fundamentals of the area. In other words, a nice kitchen and a new bathroom are great. 

But unless the area boasts high rental returns, strong capital growth potential and surging demand from renters, then the investment simply won’t stack up. 

Qualifying Your Research 

Since the property you’re looking at is being ‘marketed’ by its previous owners, it’s always beneficial to obtain independent, third party information and advice. 

Previous owners may not be the right people to answer questions about the property so instead, try talking to the neighbours. In many cases, gossip spreads through town like a wildfire so if there is something wrong with the property, the neighbours can probably tell you every juicy detail about it! 

Likewise, if the property is a great buy, the neighbours will quite likely let a potential buyer know how great the property is, what the local neighbourhood is like and whether many other buyers have been sniffing around. 

Other ways to qualify your research about property is by attending auctions and finding out about inspections that may have been already completed on the property.

Keep track of all the information you collect, even if it may not seem important at the time. 

Population Growth 

The population growth of a location can be an indicator of its desirability. If the population is continuously growing, it means that the location is sought after and attracting new residents on an on-going basis. 

On the other hand, if the population is declining, this may be an indicator that there are underlying problems with the location or that the economy is on a downslide. A growing population is one thing, but the most important factor you need to ascertain is this: is population growth creating a situation where demand is outstripping supply? 

If the population is swelling but thousands of new house and land packages are flooding the market, then it may be wise to rethink your investment. 

The key factor is not population growth on its own, but when demand is greater than supply, you know you’re onto a winner. 

Desirability 

The liveability of a neighbourhood is a good indicator of whether it will be a good quality investment or not. Before deciding to buy a piece of property in a certain location, you should talk to other people who live in the neighbourhood. 

Are there enough local amenities? 

Do people enjoy living in the area? 

What types of people like to live there? 

Also, find out how others feel about the neighbourhood. If a majority of the locals describe it as a pleasant place to live, and outsiders also speak favourably of it, then buying property in that area may be a great investment to consider. 

Amenities 

Some towns are extremely small and do not have many amenities, and towns such as these may not represent a good investment. While some people enjoy the closeness of small towns, others tend to run the other direction. 

Your preference partly boils down to personal choice, but it’s important that you make your decision based on the positive investing fundamentals of the town. Regardless of its size, if the area has plenty of attractions, it will make the residents’ lives easier. 

Therefore, more people will find that area an attractive place to live, and buying property in that town may be a good investment. Potential investors should look for amenities such as child care, quality of public school systems, access to public transportation, and the availability and cleanliness of parks. 

Shopping 

Shopping centres are an important aspect to look for before purchasing property. While people can go to nearby towns for luxury or specialist shopping, it is important to have a supermarket in the vicinity for everyday items. A local store within walking distance of the property you’re looking at doesn’t hurt either.  

Keep in mind that when the “big majors” are moving into a town, that’s a good sign for the future growth and development of the area. Major players like Bunnings, Harvey Norman, Myer and Target invest signficant sums of money into research, to ensure that an area has a large and growing population to support their business. 

It pays to leverage off their research and invest in nearby locales.

Area Developments 

If there are new houses and buildings being built in the area, this may be an indicator of the market appreciating. If the area is losing value, it is unlikely that there will be new developments underway.  

However, be careful that you don’t enter a market where over-supply will become an issue; this could happen if several new developments get started at once, flooding the market with new stock.

Area Improvements 

Improvements to the area can only be good for business. Some improvements to look for include expansions to roads, redeveloped foreshores and marinas, extended public transport services, and upgrades to local buildings such as schools, hospitals, and libraries.  

Social Demographic 

This is another important aspect to look for before purchasing property in a certain location. The aim is to find out what types of people live in the area. 

Is it a safe neighbourhood? 

Is the crime rate low? 

Is it a family-friendly neighbourhood with plenty of parks and recreational facilities? 

Before deciding on a location, buyers should also consider the incomes of the current residents. If the incomes are typically low, it would not be a good idea to build or buy a high-priced house in the area. Incomes that are on the way up are always a good sign for a region’s prosperity. 

Your best strategy is generally to invest in an area that most people can afford, as this is going to give you the biggest market of buyers for when it comes time to sell. 

So while you don’t want to buy a big mansion in an affluent suburb, you don’t want a rundown slum either. 

What to Look for in an Investment Property 

It goes without saying that before you invest in any property, you need to make sure that it is worth investing the time and money into the deal. It should be something that will be attractive to renters and potential buyers, and that has the potential for value to be added down the track.  You can begin to evaluate the property by… 

1. Comparing Neighbouring Property Values 

Before purchasing a new property, do some research on the values of other houses in and around the neighbourhood. 

This should include the prices that the houses were sold for in the past as well as the prices that they are selling for now. This should give you a general idea of whether the house will appreciate or depreciate in the future.  

2. Looking at the Size of the Land 

Make sure that the land has good comparability to other lots in the same vicinity. Make sure there aren’t any obstructions to the lot that will make it less desirable for potential renters or buyers. If the land is smaller compared to other lots in the area, it may not be as desirable for potential renters or buyers; however, if the land is larger than that of other lots, it may have great selling potential, or even subdivision potential – a relatively simple strategy that makes many investors a small fortune. 

3. Cosmetic Conditions 

You will need to check the internal condition of the property such as paint and siding conditions. The landscaping should also be a considering factor. Make sure that the inside and outside of the property is in good condition and looks appealing.  

4. Checking for Structural Conditions 

Structural conditions are very important to consider before investing in a property. If the structural conditions of the property, such as plumbing and electricity, aren’t in good condition, it will take an extra monetary investment in order to fix those problems – these can be anything from a few hundred dollars to tens of thousands of dollars. 

For this reason, a building and pest inspection is essential to ensure you identify any concerns upfront. 

5. Assessing the General Layout of the House 

The layout should make sense according to the locations of rooms, such as bathrooms, kitchens, living rooms and bedrooms. If the layout is inconvenient, it may not bring appeal to potential buyers or renters. For instance, a four-bedroom home with only one lounge area does not suit the likely number of residents living in the home… 

But a three-bedroom home with two separate living areas is much more convenient. The position of the house on the block and the lighting conditions should also be taken into account.  

6. Looking for Vehicle Parking  

Available parking is a very important aspect of a property. If there is not enough room for tenants or homeowners to park their car, the house becomes less desirable. 

There should also be extra parking spaces available for visitors. These extra parking spaces may come as an available parking lot across the street.  

7. Considering Curb Appeal 

Before purchasing a property, you need to make sure that it is appealing from the outside in. This does not mean that the property has to be the most stylish property on the block, but it does mean that it should not look ugly or rundown. 

It should at least come in close running with the other properties on the block. Passers-by should be able to look at the property and notice that it is pretty and has been kept in good condition. 

From Onside Property team happy buying! Should you wish to discuss the above further with any of a sales staff please contact 1300 938 931.

Onside Property Group Sydney - Office Dulwich Hill 

www.onsideproperty.com.au

info@onsideproperty.com.au