“West is Best”: Study Finds Perth has Best Home Loan Saving Potential

A new study has found Perth resident’s high average income coupled with the city’s low rental costs makes the West Australia’s capital the best capital city in the country to live in while trying to save up for a deposit on a new home.

The study conducted by banking and insurance comparison website mozo.com.au found on average Perth residents had the potential to save $91,784 a year.

“West is definitely best when it comes to saving for a home deposit, with Perth benefiting from a combination of the highest household incomes and rent payments well below the national average,” says Mozo Director Kirsty Lamont.

In fact, Perth locals could save an average of $40,000 a year more than Hobart residents, who came out at the bottom of the pack in the study.

Mozo found that Hobart’s cheap rent did not offset the lower than average incomes its households received, with the saving potential of the average resident pegged at just $44,154.

The costs of household expenses in capital cities, including groceries, utilities and insurance were also factored into the study, although it was found that average income and rent were the two big determinants of people’s ability to save.

Verdict by City

Below are Australia’s capital cities, ranked according to ability to save:

Perth: Has the greatest ability to save, with the highest levels of income, average rental costs and below average living expenses.

Canberra: The second highest ability to save, despite having the highest living expenses in the country.

Darwin: The third highest household incomes, but the second most expensive rent.Brisbane: Average incomes, average rents, and average other expenses make Brisbane a “reasonable” city to attempt to save money in.

Sydney: Surprisingly, the city with the country’s highest average rent still outranked Hobart, Melbourne and Adelaide in terms of savings potential.

Melbourne: Falling into the less ‘saveable’ end of the spectrum, Melbourne has cheaper rent than Sydney, Darwin and Canberra, but only better household income than Adelaide and Hobart

Adelaide: The second worst city to save in, with lower household income than every other capital except Hobart, the South Australian capital’s lower rent still fails to make up the difference.

Hobart: With the lowest household incomes ($30,000 below the Australian average), rent & other expenses in Hobart aren’t nearly low enough to make it a place where saving is easy. 

What Triggers Capital Growth? 8 Signs to Look Out for Before Investing in a Suburb

Picking a winning investment is all about knowing which markets are about to rise in value, and getting in early enough to ride the wave. By taking advantage of capital growth wherever you can, you can make property portfolio flourish and turn short term investments into long term returns.

So what are the telling factors that a suburb’s value is about to soar? 

1. The average time on market is falling

If demand in a particular market is surpassing supply, any available property will be snapped up quickly and the time property spends on the market will noticeably drop. So keep a look out for suburbs with properties spending low average days on market because this is a sure sign of high demand.

2. A drop in discounting

Growth suburbs have a high level of competition, and vendors will stop offering discounts to attract more buyers because demand is high enough not to need it.

3. A rise in auctions

Properties will often be sold by auction when demand for them is strong because auctions have the unique potential to push a selling price even higher. A rise in auctions and high auction clearance rates in a particular suburb could be a sign of a surging market.

4. Falling vacancy rates

In general, a 3% vacancy rate indicates a balanced market – anything below that means a shortage in rental properties, and a rate above that means a surplus. If a suburb’s vacancy rate is low, there are more tenants in the market than available rental properties and this often results in rent and price increases as investors seize the opportunity for higher returns.

5. Growing rental yields

A rising yield is generally an indicator of capital growth because as a suburb grows in popularity more tenants will move there and the rental rates will rise. Investors then follow, attracted by the higher yields, and this leads to a rise in buying activity.

6. Fewer available properties

If there is less stock on the market, it means that owners aren’t selling and any property available is being quickly snapped up.

7. A lot of online interest

Strong demand in the way of many people searching for properties in a particular suburb where there aren't enough available for sale is usually a good indication that values in that suburb are rising.

8. A long period of underperformance

If a suburb has been underperforming for a while – and markets close by are on the rise – it’s a hint that the suburb is about to see a surge in growth as well. And the good news is that in most cases, the longer a suburb has been underperforming, the faster the reco

The Secret Aussie Property Investment Internationals Love: Do You Know What It Is?

Australia has a rapidly growing yet surprising new property market luring in international developers: student housing.

The country's high standard of education, coupled with the weakened Australian dollar has given it the fastest growing foreign student population in the world, and global companies are cashing in on students need for accommodation.

The current shortfall of purpose-built student accommodation in the relatively immature Australian market is leading to some of the highest returns on student housing investment in the world. 

According to Savills WorldResearch, student housing investments in Australia offer an average 7% yield as opposed to the 5% offered by the UK and 5.75% offered by the US.

These above average returns are attracting developers from China, Dubai and South Africa, who are purchasing land, apartments and housing that can be re-purposed into student accommodation.

Educational services are now Australia’s third-biggest export after mined commodities like iron ore and coal, and with the mining boom winding up, the economy is continuing to refocus on to service industries, like education, which attract the coveted Chinese dollar.

Over a quarter of the country's 645,000 overseas enrolments last year were Chinese students, and the nation's demand for both education and housing in Australia is on track for continued growth in the years to come.

6 Signs the Gold Coast is the “Pick” of Investment Areas in 2016

When asked which Australian cities are likely to boast this year’s best property market potential, property developers and market analysts are pointing to Queensland’s Gold Coast. 

1. Infrastructure investment galore

Both the government and private investors have been quietly delivering more and more infrastructure to the Gold Coast for the last few years.

The light rail and its extension to the heavy rail network that has just been approved, the sporting facilities being built for the 2018 Commonwealth Games, potential Broadwater developments and the widespread retail centre upgrades across the city are all clear indicators of economic growth.

2. Rental demand is soaring

Now is a good time to be a Gold Coast landlord. The market is tight right now, with unrelenting rental demand, some of the lowest vacancyrates in the state, and comparatively low property prices all fuelling investor confidence.

3. Culture, not just lifestyle, is becoming a selling point

A noticeable shift in the culture of the Gold Coast is taking place. While there will always be fish and chips shops, night clubs, theme parks and an on-the-water lifestyle on the Coast, there is a growing demand for a more cultivated experience.

In the last five years, the city’s restaurateurs, high-end hotels and retail outlets have been quietly stepping up their game, moving the city towards becoming a world-class cultural hub, not just a beach-side holiday destination.

4. Genuine value for Southern buyers

Sydney and Melbourne buyers – particularly first time property buyers who are looking for a lower-cost entry point in to the market – are flocking to the Gold Coast.

Southern buyers are genuinely impressed with the value that the city offers – why buy a two bedroom apartment for $1 million in Sydney when you could purchase two family homes on the Gold Coast for the same price? Or even an affordable beach front property?

5. The demographic is changing

The Gold Coast has long been renowned for housing the rich and famous of Australia. And, while the nation’s financially elite and their international counterparts certainly aren't going anywhere, the Southern influx is heralding the emergence of a new demographic.

The region’s growth means that young families buying their first homes, professionals drawn to new job opportunities, and interstate retirees will continue represent an increasing portion of the Gold Coast’s housing market in the decades to come.

6. Properties aren’t lasting long

Properties of all varieties are being snapped up quickly after being listed. Earlier this year a half-finished five-bedroom, seven-bathroom mansion in Tallai sold for $2.8 million – double what it was bought for in 2007!