Based in Sydney, Australia, Home Port Property, is an independent real estate agent that specialises in finding residential investment properties for international clients that meet those criteria.

Real estate markets are cyclical and at any point different areas are at different stages in the cycle.  At any one time some areas are better for property investors than others.  That is why Home Port Property, sources a selection of residential investment stock from throughout the growth areas in and around Australia and New Zealand that position clients to benefit from market changes.

Ideally we look to source property in a market that is just beginning their next upward cycle.  Whilst we suggest that property investment is for the long term, and therefore historically your investment will go through a number of property cycles, it is always preferable to be buying at the start of a new cycle, rather than the peak of an existing one.

Currently we are spending the majority of our time on the major Eastern capitals of Australia.  The markets that are currently just in the process of beginning their next upward cycle are Sydney, Melbourne and Brisbane

For those considering an investment in these locations this article covers the following topics:

• A brief property market update
• The general purchasing process for non resident investors who invest in Australia
• A sample of some of the various projects that we currently have available in these locations

Property Market Update:

From our perspective as real estate agents, operating daily within the market, we can say that momentum has certainly picked up since the beginning of this year.  A significant amount of product has sold across Sydney, Melbourne and Brisbane over this time.  It is clear that investors are now returning to these markets.  This sort of momentum historically leads to price rises.

We regularly update our investors with market news as well as property specific information.  Following is what some of the experts have had to say:

I was fortunate enough to attend a lunch seminar in early March 06 in Brisbane and Michael Matusik was presenting.

Michael’s company “Matusik Property Insights” has been providing property research data for many years.  We have followed his projections over the last 10 years and have found them to be spot on.  As an independent researcher Michael is respected and used by both individual investors, major developers & bankers, his reports are consistently published by major media outlets across Australia.

Michael spent some time talking about the “Residential Property Clock”

As an investor you are probably well aware of this clock.  A clock where 9 indicates the start of an upswing, 12 indicates the peak of the boom, 3 is the start of the downswing and 6 is the market trough.

Michael suggests (based on his current research) that Australia’s various capital cities sit in the following sections of the Property Clock:
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Sydney: near the bottom of the cycle Melbourne: near the bottom of the cycle Brisbane: near the bottom of the cycle Hobart: near the bottom of the cycle Darwin: still climbing Perth:  near its peak Adelaide: in the midst of a downswing Canberra: in the midst of a downswing

The recently released BIS Shrapnel Residential Property Index also confirms the position of these capitals.  Sydney & Brisbane had a 4.1% rise in their indices during the Dec 05 quarter, Melbourne 3.8%, Perth 5.5%.  So all are growing, though the suggestion is that Perth is near its peak, whilst Sydney, Melbourne and Brisbane are only just beginning.

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Michael’s thoughts on interest rates are that they will stay fairly stable over the next few years.  Westpac (one of Australia’s major 4 banks) just released a report suggesting that rates will fall by up to 0.75% next year.  Like Michael, our feeling is that rates are more likely to stay fairly stable and perhaps drop slightly.  Of course any rate drop will further ignite the market and push prices up.
 

The above is in line with recent reports from other commentators throughout Australia:

As reported in Property Review Dec 2005:
HIA’s chief economist Simon Tennent said the improvement in first home buyer numbers appears to show the worst is over for this cycle, particularly given the stable outlook for interest rates, unemployment, and house prices.

Further evidence is that rents have continued their upward trend and vacancy rates are near all time lows

J.P. Morgan’s chief economist Stephen Walters said like the September (05) rise in home loan approvals, the rise in October (05) was driven by higher borrowing by both owner-occupiers and investors.

Previously, owner-occupiers were the main driver as investors stayed clear.
"The second straight rise in the value of loans to investors implies that investors have edged back into the market.”

The Australian Financial Review (one of Australia’s most respected financial publications), 11th January 2006 reports:
“Residential rental property yields in 2006 will improve markedly as contracts are renegotiated to reflect tightening vacancies, property analysts have predicted.  Vacancy rates are at the lowest for several years in most capital cities due to pent-up demand and reduced house and apartment completions.”

“In Sydney, vacancies have fallen from 4 per cent in December 2003 to 2.8 per cent in September 2005; in Melbourne over the same period from 3.8 per cent to 2.2 per cent; and in Brisbane from 2.5 per cent to 2 per cent.”

“ANZ Bank economist Paul Bradick said the gap between underlying demand and supply of residential property in most capital cities was widening, causing rental vacancies to fall.  He said fewer completions had dampened supply…”

The Residex Report September 2005 reported:
“My best guess is that by about June (06), supply issues (shortages of rental properties) will start to generate significant numbers of stories about increasing rentals and investors will start to return to the market.  Until then housing prices are likely to show a little further correction but no significant gains.  It is a market for those of us who are well informed and are buyers positioning ourselves for the upswing that will come.” 
 

So, let’s have a look at some of the specific locations that are at the bottom of the current property cycle. - Article Continued Below -