Chapter 1: What is the main topic discussed in this episode?
We connect you to the best real estate information across Australia. The Real Estate Podcast. The forecast is that rates will go up, so that might soften things a little bit. But I guess the first-time buyers are still able to get into the market.
Their mortgages are going to be a lot lower than someone who's looking at buying a property around the million-dollar mark, which is what you're paying for a good quality home in the western suburbs now. You're looking at around about a mil. It might not be as hot as last year.
Chapter 2: How are current interest rates affecting the real estate market?
Last year, we had a lot of interstates moving in. Judging by how things are going in January and February, we're getting good sales. The market's still strong. Adrian Orr is saying the economies around the world are starting to re-normalise themselves after coming through the global economic shock.
Chapter 3: What trends are emerging for first-time buyers in 2022?
But does that go out the window a little bit now after yesterday's invasion of the Ukraine by Putin? Yeah, there is certainly a feeling that the world has been further upended. We weren't fixed, we weren't necessarily normal yet, but we were looking to establish what the new normal might look like, what the sort of new trading conditions might appear as for the global community.
That has gone out the window in my mind. We've got armed conflict in Eastern Europe. We've got the Armed troops on the ground, missiles being fired through the air, nuclear threats being passed along. It's about as real as it's ever going to get. And what it does, in my mind, is just stoke that uncertainty that we've had persisting over the last few years, but exacerbates it.
This is a whole different kettle of fish. You know, we're now grappling a pandemic alongside war. So it does very much, I think, unsettle expectations that we're sort of through the worst of it and that we're necessarily rebuilding on a better path. It's never, in a sense, been more uncertain than it is today.
What are you seeing happening in the property market right now in Sydney, Melbourne and Brisbane? And with your experience, is there any sign of this cooling? We're not seeing any super tangible evidence of the market cooling. There's been a lot of talk of potential interest rate rises at some point this year, which supposedly is supposed to deter buyers right now.
But what we're seeing on the ground is that there's still very strong demand for high quality property. B and C grade properties or properties on a busy road, that's certainly taken a hit. We're still seeing good numbers at open houses and auctions. Look, in Sydney, we're seeing good numbers turning up, but that frenetic pace of bidding at auctions and that crowdfunding
crazy sort of buyers scrambling over each other to secure a property isn't there this year. It's a bit more of a normalised market because we're starting to see listing volumes rise. So buyers have got a bit more choice. And price guides used to be a bit of a joke. You know, there was a joke that there was, you know, a price guide is just a suggestion.
And what was happening last year is the end sale result was going from anywhere from 10 to 20% above the guide. But we're starting to see now that the guides are a bit more accurate and properties are transacting closer to the guide price. We've got more people interested in commercial property.
Perhaps for our listeners, let's break down what they can expect from yield returns, maybe in 2022, for certain types of commercial property. We're purchasing around sort of 40 properties per month for our clients on average. And this is just my anecdotal evidence of what I'm seeing in the market. So in Sydney, like yields can be as low as 2%, but most sort of between 2% and 4% net.
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Chapter 4: How is the global situation impacting the Australian property market?
So obviously that's not super high. It's in fact one of the lowest yielding markets in Australia, as is Melbourne, which is quite similar. You go to places like Brisbane, you can still find yields anywhere from 5% to 7% net return. Our average purchasing yield in Brisbane in 2022 this year is 6.1 at the moment.
So we're still seeing good yields, that's industrial, that's neighbourhood shopping centres, stuff like that. Now yields will vary depending on length of leases and quality of suburb and whatnot. I'm just generalising here.
uh if you go to sort of the re or let's say perth it's quite similar numbers to brisbane you might find the yields are slightly higher so you can get over anywhere from 5.5 to just over seven percent adelaide interestingly is a tight market now one of the main reasons for that is we have found that the stamp duty concessions like you don't pay stamp duty in that market for commercial has made a lot more investors go there so yields are probably about a percent lower
We connect you to the best real estate information across Australia, The Real Estate Podcast.