This week we take a look at two high-growth Melbourne suburbs that also have auction clearance rates over 80%, signaling strong demand.
And in this week’s tip we look at building insurance for property investors.
NewsMaking property news this week, a report released by QBE Lenders Mortgage Insurance, indicates that house prices in Australian capital cities could be looking at growth of 20 per cent from now until 2012.
The Australian Associated Press reports Chief Executive of the mortgage insurance business Ian Graham saying double digit house price growth is forecast across all capital cities from June 2009 to June 2012.
In other news Australian Property Monitors released its September Quarterly Rental Report with Australian houses and units experiencing zero growth nationally for the quarter.
The median asking rental prices for houses and units in Sydney and Perth continued to decline, a small rise was seen in other capital cities including Brisbane, Hobart, Darwin and Canberra.
The latest figures released from the ABS show that total lending finance commitments rose 10.2 per cent in the 12 months to August.
In new residential building, work done on new residential dwellings fell 1.2 per cent in the June quarter, 6.5 per cent lower than a year ago.
And now taking a look at upcoming events in the property arena. The Home Buyer Show is on at the Sydney Convention and Exhibition Centre from Saturday the 31st of October to Sunday the first of November.
Suburb in Focus
In our suburb in focus section each week, we look at interesting property markets around Australia which could be of interest to property investors and this week we are looking at suburbs that have solid growth and very high auction clearance rates. Now Melbourne suburbs are currently recording some of the strongest clearance rates in Australia and this week we are focusing on two Melbourne property markets that have recorded growth over 10% as well as auction clearance rates that are over 80%. These are markets with strong buying demand and a liquid market. We’re looking at the unit market in East Melbourne. It is located 18kms North of Melbourne’s CBD.
This is a family suburb with 67% of homes containing families and 63% of these families contain children. 28% of dwellings are rental properties. Houses make up 71% of properties while flats and units make up 17%. Tullamarine’s residents work in trades, clerical and transportation industries.
The median house price in Tullamarine is $340,000 dollars, which is 10.5% higher compared to a year ago. There have been 106 houses sold in Tullamarine in the 12 months to September 30 and auction clearance rates are currently 85% for houses, which is one of the strongest rates in the counrty. The median rent price for a house in the suburb is $285 which brings the gross rental yield to 4.36%.
Now to the unit market in East Melbourne where auction clearance rates are again very strong at 82%. East Melbourne is located in Melbourne’s CBD and is mainly made up of units and a few terraces and semis. 39% of dwellings are families while 38% are single living, city working professionals and executives. 53% of homes in the suburb are rental properties.
The median unit price in East Melbourne is $435,000 dollars, which is an increase of 11.5% compared to a year ago. There were 160 units sold in East Melbourne in the 12 months to September 30. The median rental price is $410 bringing the gross rental yield to 4. 9%
Tax TipAs a property investor, it’s important that you protect your asset and one of the insurances that’s wise to have is building insurance which pays for the rebuilding of your investment property in the case of building damage from natural disaster or accidents. Investment properties that are more at risk of natural disasters because of their location or proximity to bush land for example, are obvious assets to insure. And there are a few things to think about……When purchasing building insurance, it is important to insure your investment property for the current amount it would cost to rebuild the property in the case of a claim. Which means if you took out building insurance more than 5 years ago, it is likely the insured value should be increased to reflect current building costs.There are plenty of web based building cost calculators on insurers websites but builders and quantity surveyors would be able to give you a more accurate figure – it might make you sleep better at night!
