Property Investment Seminar Melbourne Australia

8/14/2019 Property Investment Seminar Melbourne Australia

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Property Collectors ClubFeb-10

Welcome


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State of the Market Anthony Smith

Buying and renovating in a group - Frank Valentic

Quiz Anthony Smith

BREAK

Sydney Market Update Monique Llanes A1 Property Finders

Hotspotting What can we learn from the past

Client Case Study Noel

Success Stories Anthony Smith

Agenda


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State of the Market

Anthony Smith


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Hindsight February 2009


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Negative Media Releases

Melbourne housing worst-hitBusiness Day - Chris Zappone - February 2, 2009

Aust resources hit by China's downturnABC News January 15, 2009

Australian unemployment rises to two-year highThe China Post January 16, 2009

Low-doc market tightens furtherAust. Broker February 2009

Australias housing bubble yet to burstThe Briefing January 27, 2009


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Negative Media Releases

Consumer spending to 'drop up to 60 pc' Bigpondnews.com February 24, 2009

Australian property sales dry upNews.com.au February 23, 2009

Bleak year ahead for housingNews.com.au February 24, 2009


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Why Melbourne's properties will keep on risingYour Investment Property Magazine February 11, 2009

Clearance rates rise sharplyHotspotting.com.au February 16, 2009

First signs of global improvement: The Age- February 6th, 2009

Decline in approvals good news for investorsHotspotting.com.au February 5th, 2009

Housing affordability at a five-year bestABC News February 16th, 2009

Positive Media Releases


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Housing market to lift after latest rate cutAust. Broker February 2009

Positive Media Releases

House prices to hold firm in 09Mortgagebusiness.com.au February 2009

$42bil stimulus package passes SenateHotspotting.com.au February 2009

Bet on more RBA interest rate cutsThe Australian February 3, 2009


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Positive Media Releases Feb 2010

Melbourne's media house price soars record $70,500in just three months - Herald Sun 23 Jan 10

Signs point to a better financial year - News Limited

Punters prefer property and shun shares - The Australian

Small rental supply, big rental prices - The Australian


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Rent rises and price growth predicted for 2010 - APM

Housing boom spreads Herald Sun

Race on as keen buyers chase too-few properties The Australian

Population Growth At Record Levels API Jan 2010


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My Two Cents Worth

Anthony Smith


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ies, Damn Lies & Housing Statistics!


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Distorting Factors

Size of sample

Segment of market with most activity

People presenting the figures

New developments in the area

The way sales are recorded


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First Home Buyers greatly reduced.

Victorian FHB worst conditions in Australia.

Interest rates on way up again.

Melbourne entering its 3rd year of boom.

Investors have flooded back to market.

Housing shortage worsening.

Population growth to continue in major cities.

Lending for existing investors tough, especiallycashout.


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Another perfect storm is brewing in Melbourne maybe2012-2103


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Block InvestmentOpportunities


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Quiz


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Break


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Monique Llanes founderLicensed real estate buyers agentQualified property lawyer and accountant

Over 23 years experience in buyingproperties for investment and development


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Source:www.kyleabaker.com

quote by famous 19th century American author MarkTwain


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What we will discuss:

Buyers Agents

The Sydney Property Market

Sydney Hotspots


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$$$$$$$$


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Our knowledge of

property prices and ournegotiation skills can

save you money.


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We never accept any fee or commission fromthe Vendor


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What is happening in

the Sydney PropertyMarket?


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1988 and 1989 huge property boom at a timewhen interest rates were at their highest.


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What do you think happens

to new developments?


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New Infrastructure

Shopping Centres

Population growth

Jobs

Lifestyle trends

Sydney


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Units and freestanding or attached houses

Suburbs within and surrounding the Green SquareTown Centre

North Ryde, Ryde, West Ryde

Suburbs with schools in the new website top 20 listother than in the Ku-ring-gai local govt area

Freestanding Houses

Upper North Shore especially St Ives

SydneyHotspots


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What is the GreenSquare Town Centre?

The largest urban renewal project inAustralia Comprising 276 hectares ofland within the suburbs of Zetland,

Beaconsfield, Alexandria, Rosebery andWaterloo.

S d Cit C il P j ti


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Sydney City Council Projectionsabout the Green

Square Town Centre

Construction commencement 2010

First residents to move into the Town Centre: 201

Projected resident population at 2021: 33,000 appr

Projected workforce at 2021: 28,000 approx


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Source : UBD Sydney Map


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Source : UBD Sydney Map213


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Families moving to Upper North Shore because more affordable larger housesmore land than closer to CBD

Most suburbs serviced by train line and express buses to the city

New town centres LEP recently approved by local Councilcurrently before the Minister for final approval and gazettal -improvements to public infrastructure must follow

St Ives LEP will allow existing shopping centre to expand andprovides for rezoning to permit more high density development

Recent Herald analysis of federal government my schools websiteshows St Ives as the only suburb with more than one school in thetop 20.


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Hot Spotting

What can we learnfrom the past?

Anthony Smith


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Hotspots Vs Bluechip

Hotspotting is buying in an area where it isanticipated there will be quick growth, oftenregional and industry related.

Bluechip - Buying in well establishedsuburbs close to capital cities that have aproven long term growth pattern.

Ideal Hotspot is also a Bluechip area, ie

2007 & 2009 Melb, Perth 2004 Darwin2003, 2004 and 2009, Sydney 2010?

Hotspotting


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If you intend to grow your property portfolio quickly the

first property decision is the most important.

Current finance climate accentuates this further.

Over time as portfolio grows it becomes far less

important and in fact almost unnecessary.

Hotspot until you can bluechip.

Hotspotting


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June 2003

The Big Decision

$30,000 to invest

St Kilda Unit Vs Newnham ( House)?

What would you prefer in portfolio?

What was the best option?


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What Happened Next?

St Kilda off high growth 2001-2003 was flat

Newnham doubled in value in under a year

Very slow growth since, worth about $190k


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Shaun and Eb Curtis

2006 had $13,000 deposit to spend

Gladstone Queensland Unit orGeorgetown Tasmania House $125k maxpurchase.


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Ann St Gladstone - $125,000


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10 ways to pick a Hotspot

2. Hot 2-3 years1. Population Growth

5. Fallen Blue Chip

3. Established Cap B-mark 4. Industry/ Employ

9. Baby Boomers

6. Limited Supply

7. Rental Return 8. Infrastructure Upgrade

10. Water


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Hotspot Areas

Area Year Star Rating


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pTasmania 2003 ***

Darwin 2003 ***

Mackay 2004 **

Perth 2004 ***

Ipswich 2005 *

Townsville 2005 **

Gladstone 2006 **

Hervey Bay 2007

Melbourne 2007 ***

Port Augusta 2008

Melbourne 2008-2009 ***

Sydney 2009 Too early

Hotspot Areas

Area Year Star Rating


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pTasmania 2003 ***

Darwin 2003 ***

Mackay 2004 **

Perth 2004 ***

Ipswich 2005 *

Townsville 2005 **

Gladstone 2006 **

Hervey Bay 2007

Melbourne 2007 ***Port Augusta 2008

Melbourne 2008-2009 ***

Port Headland 2000-2009 ***


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P t H dl d H f S l


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Port Hedland House for Sale

Sold - $850,000


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Port Hedland Rental

Rental $1,300pw


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Hervey Bay

Rental returns - not great

Population Growth wrong type - income

Limited Supply Effect of units

Hot-2-3 years - Tried to pick bottom

Too close to previous boom?


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Port Augusta

Hot 2-3 Years

Population Growth Had not started

Relied on one project Olympic Dam that hasbeen delayed

Its a Dump!

Need to add new criteria


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Need to add new criteria

Affordability

Percentage of income on mortgage

In 20%s lots of room to move

Around 40%, nearing peak

Perth 2004 27%

Sydney 2003 41%


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1. Population Grow th 2. Hot 2-3 years

3. Established Cap B-mark 4. Industry/ Employ

5. Fallen Blue Chip 6. Limited Supply

7. Rental Return 8. Infrastructure Upgrade

9. Baby Boomers 10. Water

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Regional Hot Spot Criteria


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6. Established capital benchmarks

1. Rental Returns 7% +

2. Population Growth Right demographics

3. Wages To Value Ratio

4. Market started to move ( reduces mistakes, like payin

insurance)

5. Market flat at least 3-4 years

7. Industry/Employment


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R i l H t tti Ti


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Regional Hotspotting Tip

Bottom of the market seen the biggestgrowth

Cheap Units

Darwin, Mackay, Gladstone, Townsville,Port Hedland

Opportunities again towards end of 2010

Any suggestions?


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QUESTIONS?


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Client Case Study

Noel

I t t St t


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Investment Strategy:

Using equity in home to start investment strategy.

Look for properties with good rental returns in areaslikely to have quick growth.

Invest with the smallest impact on cashflow & lifestyle aspossible.

Used Buffer to help service loan.

As rental returns increase & properties increased invalue, purchased more property.


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Sept 03 Mackay QLD - $92,000


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Nov 03 Darwin - $120,000


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Nov 03 Georgetown - $83,000


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Nov 03 - Burnie Tas - $126,000


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Mar 06 Mordialloc - $255,550


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Sept 09 Harrow Rd Auburn - $222,000


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Portfolio Summary:


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yProperty: Price: 2010 Value:Purchased:

Mackay 2003 $ 92,000 $280,000

Darwin 2003 $120,000 $340,000

Georgetown 2003 $ 83,000 $155,000

Burnie 2003 $126,000 $230,000

Mordialloc 2006 $255,550 $380,000

Auburn 2009 $267,000 $277,000

Auburn 2009 $222,000 $232,000


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Property Investment Seminar Melbourne Australia

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