Tuesday, November 24, 2020
International

HTW looks at Australia property investment

Australia property

The valuation firm says that investors should be mindful of vacancy rates and proposed infrastructure upgrades

Risk appetite and investment strategy will play a large role in deciding where to invest, according to the latest Herron Todd White (HTW) (Australia) residential report.

The valuation firm took a look at how a budget of $700,000 could be invested in property markets across the nation.

The HTW report suggest the entry level price point of $700,000 and products on offer appeal primarily to first home buyers and investors.

An investor should be mindful of vacancy rates, competing stock levels and planned infrastructure upgrades, making sure to utilise the most recent market evidence to justify any decisions, the valuation firm said.

Value levels have performed better than forecast during the COVID-19 period, with CoreLogic reporting a 0.4 per cent decline in dwelling values across Sydney in May.

Median data suggests the Northern Beaches is still currently well above 2019 levels for both unit and dwellings. Sqmresearch.com has current median listing prices of dwellings at $2 million, well above the May 2019 low of $1.69 million.

Given that $700,000 is well below the median dwelling value of $1.8 million (CoreLogic as at March 2020) it would take something fairly unusual and a property in Wheeler Heights just so happens to have sold recently, the report noted.

65A Penrith Avenue, Wheeler Heights is a lower level duplex built in 1970’s that has been renovated internally and features one bedroom, one bathroom, open plan living room and entertaining deck and courtyard.

This compact semi-detached dwelling sold in February 2020 for $700,000 and was last leased for $450 per week in 2019.

A budget of $700,000 provides a plethora of opportunities in the unit market with a number of suburbs including Mona Vale, Dee Why, Avalon, Manly, Collaroy, Newport and Brookvale having a range of unit types available for under $700,000 (some as low as $450,000).

One-bedroom units are available from as low as $500,000 in Dee Why, so $700,000 would allow the opportunity for a modern or renovated one-bedroom unit.

Alternatively, older style two-bedroom units are available from around $650,000, the valuation firm said.

A recent example is 8/14 Lismore Avenue, Dee Why.

The renovated 1970’s two-bedroom, one-bathroom unit sold for $665,000 on 28 May.

Dee Why would offer a higher yield potential (around four per cent) although historically offers lower capital growth prospects in comparison to other nearby suburbs.

Alternatively, an older style unit in a busier position in Balgowlah or Manly is available for a similar value level, the report noted.

Important:
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

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