Firstly thank you to everyone who has taken me up on my offer, and it is not too late to download a free report on your homes value LINK. What a month it has been! The most exciting news this month is that the infection rate in Victoria is down and Melbourne's curfew and restrictions are beginning to relax. If history is anything to go-by, this will lift market confidence even higher in the short term, as the opposite happened only a few months ago when Victoria was heavily hit.
On Melbourne Cup day the reserve bank has announced a further rate cut to 0.1% which is the new record low, and according to the RBA board it forecasts not going back up until at least 2024. It is unlikely the major banks will immediately pass on this rate cut however some second-tier lenders already have, and it will open the door to renegotiate better rates to borrowers.
An aggressive quantitative easing program was also announced which will see A$100 billion worth of government bonds purchased by the RBA over the next six months, with 5-10-year maturities. Aimed at stimulating the employment sector in the short to medium term. Interest rates will not be expected to rise until Australia's inflation rate is back between the 2%-3% target band. It will be very interesting to see how inflation plays out as we have not seen regular inflation for half a decade and even so, this time it will not be organic.
If you look to other parts of the country, in particular Queensland we are seeing some mind-blowing activity. Not South Sydney however the news coming out of the Gold Coast, especially during a recession is crazy! There is an absolute frenzy taking place between Northern NSW and the Sunshine Coast, as Sydney-Siders and Melbournians seek a combination of value and lifestyle. Not limited to retirees, the "rat-race" has been becoming the motivating factor in more and more households during the past decade. Covid has revolutionized working remotely and decentralized many companies, which has taken the market to a whole new level along this stretch of coast. The thought of being able to sell a small home between $1.5-$2M and buy a house twice that size for half as much in a region such as the Gold Coast, is very tempting.
I am of a very strong opinion that the Gold Coast and surrounding areas are not even half way through their growth cycle and will see double digit growth every year over the next 5 years on average. Here is why;
1- Historically the Gold Coast only had tourism to rely on. Now the GC provides large scale employment in the education, sporting and medical sectors
2- The Gold Coast was hit so hard during the GFC that excess stock levels have taken years to dissipate. Stock-levels are still very high in comparison to Sydney. When stock levels do come down further this will exaggerate growth
3- Previously only for retirees, many young families now call the GC home. As this continues, locals will realize that they may already have friends living up there. I was up at Burleigh last year when I ran into two separate families having a beer together who both happened to be past vendors of mine from Botany
4- The prices are half of that Sydney and Melbourne
5- A domestic flight will take you from Sydney to the GC in just over an hour for as little as $50. There is also an international airport at the GC
Billy's Ten Investment Hot Spots for the month;
1- Gold coast, Houses under $600,000, Southport, Robina, Ashmore
2- Greater Western Sydney, Emu Plains, Werrington, Campbeltown
3- Lower Blue Mountains, Blaxland, Glenbrook, Lapstone
4- Lithgow- Dirt cheap and surrounded by higher values and the gateway to the west
5- Perth- After a huge spell on the sidelines Perth is at the start of recovery phase. Only 1.6% vacancy rate!!
6- Southern Highlands- population growth from Sydney
7- Coffs Harbour- population growth from Sydney
8- Cairns- start of recovery phase off a heavy bottom, will also benefit from Sth QLD's bullish market
9- Nowra- exact same reasons as Lithgow but a little safer
10- I didn't think I would ever say this but just keep an eye on cheap off-the-plan opportunities if you are a FHB that can raise 10% but aren't in a position to buy and settle now. You may have 10% of a deposit for a $800,000 property and be another year or two away from the 15%-20% required. I would be careful but you may be able to put your 10% down now and take advantage of all the incentives whilst also benefiting from a lower buy price and the capital growth over the next two years. I would only do this if you know you are getting a bargain, you are getting all the FHB stimulus, and you know it will be at least 24 months before it settles. I would recommend house and land however I know that there are some heavily discounted units available. Just pay special attention to the outlook, internal size, and try and buy north facing balconies.
In general, if you are a newbie, this is a reliable little recipe. Look for an under priced shit hole suburb on the edge, or surrounded by better areas. Then look at the average prices in that suburb and buy a house within the lower third. Buy an old house that is in very good condition. This means you are buying a house that looks old but functions well. Then give it paint, new floors, a few new fixtures and fittings, and gardens. You should be looking for a neutral or positively geared property with these interest rates. I would only be willing to own negativity geared property if it is in Sydney CBD's 25km radius, or Melbourne's inner ring, or if it had future development potential. No other reason at all. And if a financial adviser or accountant ever ties to talk you into buying into a house and land package or off-the-plan then sack them and 9 times out of ten they are only looking for a kick-back.
Please click here for a link to a property appraisal form if you need an updated appraisal on your property if you are looking at selling, otherwise use this LINK if you just want a free ball-park report sent across.
NOVEMBER SELLER TESTIMONIAL. On Friday I was fortunate enough to exchange 32 Collins Street Pagewood for $2,000,000. This two-level weatherboard house on 441sqm was previously sold in 2017 for $1,825,000. The owner had decided on a tree-change but was not in a rush as they had already secured their dream home on a small acreage two hours out of Sydney. Here is what the owner Sara had to say;
"house sold off market in 3 weeks! Billy was lovely to work with. We expressed that we didn't want to go through all the open houses and a long campaign. We gave him the figure we were happy to sell for and explained our boundaries. He got us what we wanted, met all our expectations and is now helping secure our next place to buy. He is calm and friendly. No BS!!"
Billy Couldwell Licensed Sales Agent 0416713721 billy@ngfarah.com.au
