Infolio’s 2012 property predictions

Everyone is an expert when it comes to property – don’t you think? Well as buyers advocates and property managers it is our job to be experts in property so like everyone else we are going to give you some tips and predictions for 2012.

First of all I will start by saying that you can’t have a blanket approach to buying a “good property” we recommend different things to clients depending on if they are looking for an investment property or a home to occupy. I’ll start with investment properties: A suburb we will be specifically looking to buy within for 2012 for property investors will be Armadale, this particular suburb has seen double digit growth for the last 30 years – it’s a no brainer that if we can secure a good property in Armadale our clients will see strong capital growth – yeas the entry base is quite high but the growth is strong and the rents also consistently increase, that being said we wouldn’t just buy anything in Armadale it will still need to meet our stick purchasing criteria. Another pocket we are particularly fond of is bayside, in particular Elwood, parts of St Kilda and Elsternwick. Elwood has also seen excellent growth and based on a Residex prediction they believe that all of Bayside will see continued growth by a further 8% over this coming year. Elwood is favored by us for a number of reasons – there is limited development, it’s close to the beach & city, the streets are lovely and tree lined, it has maintained its vintage and it attracts the highest number of female tenants than any other suburb across Melbourne. Now let’s talk North and West – these can offer better value to those with a lower budget as the entry base is lower, we are very pro Brunswick East, Yarraville & Seddon, however we recommend staying away from Sydney Road as this area is very pro-development and that can stretch to surrounding streets and lower the value of better properties due to a supply and demand issue. What should you stay away from – again keep away from pro-development areas, don’t buy on main roads, don’t buy house and land packages, don’t buy in large blocks and make sure amenities are good if you want to maximize yields and maintain strong vacancy. Houses: If you are looking at a suburb that will see strong growth we recommend focusing on Honesdale and Elsternwick – these are super suburbs with excellent amenities, lovely streets, great facades that are on the up.

So what do we predict for 2012. Well since the last interest rate reduction we have seen the first rise in property prices for almost 12 months, there is another 1 to 2 cuts expected this year and they will continue to shake up, or wake up buyers. The bottom has bottomed. We believe that there is still good buying to be had together with great opportunities to work your negotiation skills. We believe that much like the GFC people will realize that their jobs have remained stable, their incomes the same , the interest rates low and will start moving ahead – we believe that in 2012 there will be slow, steady growth in the property market. Ill come back to you after the next quarter to review how I’m tracking!