House Prices Get High on Investments
10th September 2007
While housing affordability and rising interest rates may be a concern for first home buyers, they are realising that bricks and mortar are still a solid investment.
Buying your own home is a smart financial move, as property tends to appreciate in value and you have an asset that you can borrow against or sell when the market is high. Every investor wants to be plugged in to predictions of the next property boom and pundits are forecasting a sharp rise in property prices at the end of this decade. The prediction has sparked great interest from investors locally, interstate and overseas in inner city Brisbane apartments which continue to experience strong sales results. BIS Shrapnel senior forecaster Frank Gelber expects property prices to rise steadily in Brisbane with a surge in price growth of up to 35 per cent between 2009 and 2012. Developers have noticed a rise in off-the-plan apartment sales in developments due to be completed in line with the predicted property boom. According to PRDnationwide inner city research analyst Alison Timchur, the inner northern suburbs of Brisbane have enjoyed excellent capital growth and ongoing interest from both investors and owner occupiers. "Flagship suburbs such as New Farm, Newstead and Fortitude Valley have each been a key catalyst in the resurrection of the 2003 property boom, where both local and interstate buyers began their love-affair with these highly sought after locations," Ms Timchur said. "A healthy 67 per cent of all dwellings are rented as opposed to the Brisbane average where 34 per cent of dwellings are rented. "The median sale price for units in this market grew by 12.1 per cent per annum in the past six years which is a moderate result. "The real surprise came through the research on houses in the area where the median house price grew by an impressive 19 per cent per annum over the same period. The median house price is now $822,500," she said. According to PRDnationwide New Farm agent Adam Gray, if house prices continue to grow at the same rate, median house prices will be around $2,333,703 by December 2012. Gray has such confidence in the area that he recently purchased a property in New Farm."I consider this inner northern peninsula to be a blue chip area of Brisbane and with the addition of Newstead River Park, it will only add to its value," Mr Gray said. "During my days of selling property, I've seen many more owner occupiers moving into the area which is putting considerable upward pressure on rents as there are now much fewer rental properties available." Investors can be confident that rental properties will continue to be in high demand, particularly apartments, to cater for the growing number of singles and baby boomers who are attracted to well-planned infrastructure and lifestyle precincts available in the inner city. For investment advice see a financial planner who will help you make the most of your financial assets and help you plan for a secure future.