When is the right time to buy property?

Welcome to the first instalment of our four part series outlining tips for investing in the current property climate.

When is the right time to buy property?

This is the sixty four thousand dollar question. In the first instalment of our four part series we have collated commentary from some of Australia’s most respected economists, property researchers and consultants to provide you an insight into what lies ahead for our property markets.

We hope you find the report informative and useful.

The Property Clock

News Limited property guru Karina Barrymore recently reported on ‘The Property Clock’. She said, “Within the property market there are many different economic factors at play and the face of a clock can be used to show where the market is at any given time. The two main positions on the property clock are undersupply and oversupply. Everything else is leading to one of these market conditions or coming out of it”. Read Katrina Barrymore’s article.

So where are we now on the Property Clock?

Leading real estate research firm, RP Data’s Tim Lawless said that the Queensland market is at six o’clock: the ‘buy now’ phase.

“I think we will see Queensland gather pace, as 2009 was a hangover year, which is starting to shake off,” Tim said.

“Queensland’s best growth driver is its population growth, particularly in the South East.”

It is worth noting that the Maroochydore CBD, through Council’s Maroochydore Structure Plan, is set to house a significant proportion of the 8,000 people per annum forecast to move to the Sunshine Coast.

See Tim Lawless comments on Qld in the Property Clock article.

In accordance, this sentiment is supported by global property house Colliers International’s recent international survey which concluded in saying that, “Australia is officially home to world’s fastest recovering property market”.

Colliers research director Felicity Spark said we have just passed the six o’clock position and, “This will clearly put our property market in a state of upswing.” See the Colliers International survey release.

National independent valuation consultancy firm Herron Todd White in their national market indicators report has again confirmed this by reporting that the Sunshine Coast has now reached “the bottom of the property cycle.” Copy of Herron Todd White’s month in review report for August 2010.

Further evidence on the current state of play - particularly for investors in the property market -was reported recently in the Australian Financial Review (AFR). In this article, Australian Property Monitors reported “evidence that investors were throwing money at the affordable end of the market…(with) annual price growth of 15.6 per cent”.

AFR’s Ben Hurley also said that “economists believe the fundamentals are in place for investors to play an even bigger role (in the future). Australian Bureau of Statistics figures released yesterday show rents are increasing at an annual rate of about six per cent.”

BIS Shrapnel senior economist Jason Anderson said there was still “a lot of upside” left for investors.

Download a copy of the full article by Ben Hurley.

Timing

Timing is critical. If, as suggested, we are at six o’clock, how long do we have before we lose this buying opportunity? Rod Corish from Macquarie Bank recently reported on this in the company’s Market Focus 2010 report.

Rod said that the residential property market was usually the first to pick up following an economic downturn.

“The time lag between indicators and actual events is shorter (than occurred in previous cycles), so it’s increasingly important for investors, buyers, seller and agents to move swiftly”, Rod said. See the complete copy of Macquarie Bank’s Market Focus 2010 report.

Where to from here? Our next instalment: What to buy and the pros and cons

Hopefully the above provides a brief insight and the attached articles provide some further detail on some of the more recent commentary coming through regarding the property market. We would encourage you to do your own investigations and we would be more than happy to provide links and references to the research we have conducted.

If you agree now is the time to buy, you’ll love our next instalment where we seek expert opinions on the pros and cons of buying new and used properties. We will also consider the benefits and pitfalls of buying houses and apartments so you can choose which option is right for you.

Emporio

We’re pleased to inform you Emporio is still charging ahead. With sales continuing to exceed expectations, we are now imminently close to starting construction of Stage 1. With initial site works forecast to commence in October we are all extremely excited at meeting this significant milestone. We will update you more on this in the coming weeks.

If you have any questions about the information provided or would like to learn more about the Maroochydore CBD Emporio development, please contact Nicholas Criss for a private viewing at our on-site display centre on mob: 0403 001 992.

Until next time,

Carl Nancarrow - Manager of Development, Reed Property Group

Nicholas Criss - Emporio Sales Manager, Ray White Maroochydore