So for the average Joe who is not the next Mark Zuckerberg or young millionaire, pay attention. The 4 wealth fundamentals you’re about to read are not only practical and realistic, but integral to your success.

Goal

When it comes to building wealth, always start with the end in mind. By knowing your goal, all your other decisions and actions will be better guided towards its attainment. Although it’s the most simple, it is also fundamental.

Ask yourself – How do I want to live after I retire? Comfortable? Lavishly? The answer will help find the solution to the next question which is – How much would I need in my retirement for this lifestyle?

Once you know this information, you need to create a flexible plan that can be adjusted as time goes by.

Income

At the foundation of your wealth building strategy will be your start up capital, which usually derives from the income you create.

There are a lot of factors that you need to take into consideration when it comes to income. One would be whether you know if your present income is going to be stable, increasing or decreasing in the future based on your circumstances and career. The answer will dictate how freely you’re able to spend or how cautious you should be with the money you’re currently making.

Aside from living expenses and leisure, your income should be set aside for a smart and proactive savings plan. This is a factor that is highly recommended especially if you’re young, as the earlier you begin the longer you have to build this up.

Investing

Only after your savings plan is set up and active, should you start investing. Every other factor in building wealth is based on surviving. The reason why investing is so important is because it’s geared towards thriving and having a great future instead of just preparing for a “rainy day”.

In many cases, time is the most important factor in investing, oftentimes more important than the amount you invest due to compound interest. The most important component is that you start as soon as possible, even if it’s a dollar that you can build on over time.

Expenses

Without a doubt, expenses are the one factor that if you get wrong, can cause failure for the rest of the fundamentals. The fact is, if you’re spending more than you’re earning, not only are you losing money, but you cannot save, invest or create a prosperous future for yourself.

If this is the case for you currently, feel good that you came across this article. Have a look at your weekly expenses, what are the musts and what are the purchases that don’t really matter?

This could be as simple as cups of coffee, excessive shopping or anything that you feel you do to an excess. Although cutting these are small at first sight, in hindsight you will find they build up to massive savings and will tip you over the scale to more income than expenses.

There are many more facets and factors to learn of course, but these tips will give you a basis of understanding on what to initially pay attention to. Wealth is a major component in our lives, so making these fundamentals a focus will be one of the most important decisions you make. Contact us today to discuss further. 

With all investments there comes risks, but fortunately with granny flats that risk is minimised greatly. Read on so that you can get a perspective of both sides of the coin when it comes to protecting your money whilst also growing it with this potentially great investment choice.

Advantages of Granny Flats

Affordability

Whether you’re purchasing an already established granny flat or building it from scratch, it is remarkably more affordable than a standard property. The power in this is that if you’re new to investing or just tight on funds, you can wet your feet in the market without as much risk.

Asset

If you are purchasing a granny flat as an addition to your current property as opposed to a separate standalone, it will add value to your residence. The power in this is that if and when you sell your house, you earn the added value on top of its already existing rental income if there are tenants.

Risks Involved

Substandard Tenants

This applies especially if they are in proximity to you. When renting out, there is always the risk of having less than ideal occupiers. Be sure to have a certain criteria for who you want to occupy the granny flat. Bad tenants can far outweigh the financial gain and even create a negative cash flow in certain situations.

Unexpected Charges

Additional funds must be set aside when those unexpected costs arise.You’d be surprised at what can arise during a tenant’s stay or just standard costs that weren’t anticipated, so preparation for these potential situations is a must.

Overcapitalisation

Generally the banks will not increase the value of your property that much compared to the capital you initially invested. This means that you could potentially be spending $100,000 on a granny flat, and the banks will only raise the value by $75,000.

Rules and Regulations

In every state there are different rules and regulations, so this must be something researched by yourself. Despite the division in rules, there are fundamental regulations that apply nationally, so ensure you’re aware of these:

• Granny flat space  should not exceed 60 square metres (can vary slightly across states).
• Must have differentiated access from main property.
• Primary property already has zoning permission.
• Primary property owner owns the granny flat.
• One granny flat per property.
• Property exceeds 450 square metres in space.

As you can see, like every investment, granny flats have their ups and downs. In the current Australian economy with the affordability crisis, they are a great option for investments due to their low initial costs.

Ensure that you conduct research in not only the points addressed in this article, but in relation to the tenants you’re considering or the area you’re buying in. This will always be a viable option for investment, and if you’re a beginner, it is ideal due to its massive price saving compared to standard properties.

Keen to learn more about investing? Contact us today!

Right now you may be on the fence as to whether to move out solo or with another individual. Consider these options for the latter.

Tenants in Common

Ideal for individuals who don’t want equal ownership, ‘Tenants in Common’ depend upon the agreed shares of each party which may be something like 70/30. This also means that if one party dies, rather than their interest passing on to the other tenant, it goes on to the individual’s estate and will.

Joint Tenants

The most common form of ownership, particularly for husbands and wives is ‘Joint Tenants’. Essentially what this arrangement entails is that both parties have equal shares. Alternatively to Tenants in Common, if one party passes away, all the shares are transferred to the other individual through rights of survivorship.

Although this is universally the most common option, it is not always the best. For example, in the situation where one party is earning remarkably more than the other, an arrangement such as Tenants in Common may be more appropriate in certain situations which will be discussed below.

These options are polar opposites which can make it hard to decide, however, fortunately there can be some flexibility in certain cases. There are different situations that can arise which would combine both. An example would be if a third party was involved that desired a smaller share, whilst the first two parties would share the greater half. This would result in a Tenants in Common and Joint Tenants relationship.

How to Determine What Option to go With

Whether you go with Joint Tenants, Tenants in Common or a combination will solely depend on your circumstances and personality. There are certain factors and situations that call for one option over the other. The below points will provide you with some insight as to what option may be more appropriate for you depending on your conditions.

Joint Tenant

• Both parties are in equal or similar income brackets.
• Ideal for married couples or business partners.
• Continuity – you desire to keep ownership of the property for whatever means if the other party dies.
• Financial stability – will not go into turmoil if other party becomes deceased.

Tenants in Common

• You earn significantly more or less than the other party.
• You do not want full ownership if the other party passes away.
• Financially cautious (lower income party).

Both options are advantageous depending on your situation. The final decision would have to be made between the two main parties or more, to come to a conclusion if you’re set about moving out with someone. Ideally if there are more parties involved, a combination may be the best option.

Although Joint Tenant has historically been seen as the default option in most cases, this is beginning to change as people have begun to act more consciously with their capital in property purchasing. At the end of the day, it will come down to your research as well as your knowledge to choose the option that’s best suited for your circumstance.

Want some help deciding which option is best for you? We can help! Contact us today.

Although unfortunate, it is a fact that frivolous lawsuits are an issue and people are taking advantage of our legal system. Wealth can be acquired throughout an entire lifetime, and taken away by one superficial claim. This article will go about explaining the different ways you can protect yourself from this fact so that you never have to suffer from a frivolous creditor.

Individual ownership of assets

The best way to shoot yourself in the foot in terms of asset protection is to own investment properties in your own name. In the case of being sued you are at risk of losing everything under your name.

Many people would argue the tax benefits and cost effectiveness you would receive by using your own name, and they would be right, but the argument for the potential loss is a much better one if your focus is on protection.

Company structure

An alternative to individual ownership is using a company structure, which is characterised by being a separate legal entity from the owner. In the case of asset protection, this is a much safer and wiser choice as the risk is transferred to the shareholders in the company.

The issue with this structure is that if the individual happens to own all the shares in the company, much of the asset protection benefits you would receive from this form of ownership would dissipate.

Trust fund

Typically, property investments owned in a generic trust are the way to go over the above examples. The benefit of this is clear, the individual does not own the asset, but rather the trust does. The individual however, does control it.

During the situation of a lawsuit, a person with a trust does not bear any potential loss or risk that a company structure and individual ownership do. The only caveat is that you must know what trust is right for you for many reasons including tax effectiveness; whether you’re a business or on your own will have a lot to do with this.

What about insurance?

Many individuals mistake asset protection for insurance and make the fatal mistake of choosing one over the other. The truth is, both supplement each other and are mandatory. Having insurance provides many benefits towards asset protection including legal fee assistance, funds to settle lawsuits and so on.

Now that you’re aware of the main forms of ownership in relation to protecting your assets, you can judge your situation and make an informed decision. Contact us to discuss your investment options.

The benefit of this method is purely financial, the investors return on rent is in direct proportion to their fraction of the property. Many individuals do not have the means to make such large investments in properties, and as a result use fractional investment as an alternative.

Low start up fees

With fractional investing, you can literally start with as low as $75 and own part of a property. Although this is a low entry, you do miss out on some of the benefits that traditional investing involves. Factors such as in person inspections are not included with low investments, rather you just gain a slice of the returns.

It’s no surprise that with the opportunity of low risk, fractional investing is attracting a lot of young people. With the Australian market as expensive as it is, this form of investing targets a very large market of people who desire to put their money to good use, but cannot afford absurd prices or don’t want to take massive risks.

Where to find fractional investing platforms

Like other forms of investing, there are different mediums through which you can operate to succeed in fractional investing. BrickX and DomaCom are two of the main companies in Australia that allow you to invest in fractions with there own unique advantages.

BrickX

With a minimum requirement of only $100, the BrickX online service allows you to buy “Bricks” in a unit trust. Bricks as labeled by the company allow the individual holder to receive returns in proportion to their investment, they can be compared to shares. The notable benefit of this being is that there is no minimum holding and the investor is able to list there bricks for sale whenever they want.

DomaCom

With a Managed Investment Scheme structure, Domacom allows investors to invest in properties using not only fractional, but crowd funding methods also. The company has quite a low minimum entry at $75 and is regulated as a managed fund. One of the unique aspects of this company is that they offer a bookbuild process that allows investors to collect their funds together and invest in any of the hot properties in Australia.

With the Australian property market still showing high prices and not giving any signs of reversing as of yet, fractional investing has nowhere to go but up. Society at large and young people in general can barely afford the demands of the market, let alone spending their money on a full property for the purposes of investing. Fractional property investing is just beginning in terms of its popularity, and may be the next mainstream way for Australians to invest. Keen to know more about fractional investing? Contact us today.

This article will outline some of the fundamental mistakes that property investors make when starting out, so be sure to keep them as your guide as you head into the world of property investing. 

Narrow focus

Many investors, and beginners in particular, tend to get very excited at the first site of a promising property and totally cut off all other options. This can be for a number of reasons including an authority figures’ influence.

Although third party advice is viable and definitely recommended, most of them have another agenda which is why it’s always smart to do your own research and seek advice from various sources. Avoiding this pitfall opens you up to a world of financial opportunities and rids you of financial stress by not choosing the wrong property.

Using emotions over logic

Choosing a house for an individual is a very intimate decision, it’s a place where they will call home and create many fond memories. Unfortunately, these same emotions tend to arise in people when they are choosing a property to invest in, which can lead to all kinds of chaos.

When going to look at your potential investments, always look at it as an investment to make money with. The garden in the backyard may bring back blissful memories of your childhood, but are your potential future buyers going to care? Not likely. This is a skill in its own and will require time to develop, but it is crucial to your decision making process and must be consciously utilised.

Untouched rent adjustment

Many times property investors go into a deal thinking that it is done once the papers are signed, and this isn’t so. There are several things that require monitoring for your income to keep flowing as well as increasing, and rent payment adjustment is one.

As the rental market changes, you need to be able to adjust the per price cost of your property accordingly. Most importantly, this needs to be performed incrementally rather than all at once.

Disregarding external factors

It’s common knowledge to include the neighborhood and surrounding area, but many investors underestimate its importance. The conveniences in the local area can be the make or break for any tenant no matter how good the property is, so it makes sense to pay it as much if not more attention than the property itself.

Depending on the area and your ideal tenant, the external factors can range in level of importance. In general, factors such as neighborhood safety, education, transport and shopping luxuries will all play a major role.

Not having enough capital

This applies mainly for freedom of choice rather than the ability to invest. For starters you will need enough to even invest in a house, but that should not be the marker. For a safe and profitable decision, you need to have enough to consider as many options as possible rather than the ones that fit within your budget.

This is a mistake for a simple reason, missing out on opportunities. The last situation you want to be in is having to settle for a less than great house where all you would have needed is more funds to seize an extremely profitable property.

Many of these mistakes are instinctual rather than situational, meaning that if you don’t consciously decide to avoid them, you may find yourself doing them out of human nature. Be patient and take your time, avoid these common pitfalls and it will pay off in the long run. To discuss this further, contact us today.

Units

Compared to houses, units tend to be smaller abodes, with smaller rooms and less private open space. They may be stand alone (i.e. detached), or they may have common walls with abutting dwellings (i.e. semi-detached), and may also have shared space for driveways and parking.

Once the domain of the pensioner or downsizer, units (aka apartments, condos, and plexes) are now popular to the point of becoming mainstream for these three reasons:

1. Affordability

In general, in any given suburb, a unit will be cheaper than a house. This will be because it is a smaller sized building with more compact bedrooms and living areas, but more importantly, because it has less land.

As mentioned, having to put up with small used to be seen as a compromise. Not so much anymore. Smaller now means less cost (i.e. rates, utilities, etc.) and less effort to maintain (i.e. cleaning, garden, repairs, etc.).

2. Convenience

While apartment living has always been a necessity in population dense cities like London and New York, and in places like Europe, Australia was urbanised on the back of a “house in the suburbs on a quarter acre”, and a commute (usually via public transport) to the city for work.

Yet, as travel times increased, and as the amenities in city areas improved, the CBD area has morphed from a place to work and be entertained, to a place to live and work and be entertained. For some, the convenience of walking to the office and access to superior amenities such as restaurants, entertainment, transport, etc. have outstripped the benefits of a traditional house in the ‘burbs and a long commute on a congested freeway to work.

Furthermore, as mentioned, while seen as odd by past generations of Australians, unit living is the norm in many Asian and European countries where space is in short supply. Without any prejudice, immigrants see nothing unusual about living in the same type of (compact) accommodation as is the norm in their country of origin.

3. Yield

For investors, compared to houses, units generally provide a better income return. That is, despite needing to accept a lower rent compared to what could be achieved owning a house, investors are more than compensated with a cheaper purchase price so that when the numbers are crunched, it is usual for a unit to have a higher percentage gross return (i.e. annual rent divided by purchase price) than a nearby house.

Houses

To qualify as a house, the dwelling normally has to be on its own title and have no shared or common area, including walls, driveways, etc. Houses are usually larger than units – both in respect to room size and the amount of private open space.

As mentioned, for many generations past and present, the Great Aussie Dream was to own your own house, which was typically on a substantial parcel of land (such as the classic quarter acre which is a little over 1,000 square metres). While land sizes have diminished (most new houses today come on land parcels of 500 square metres, or less), houses remain the pinnacle of home ownership for those who like their space, are raising a family, and/or who prefer not to be living a wall away (i.e. a few metres) from their neighbours.

Which Is The Better Investment?

Consider this conundrum: you can either buy an older 2-bedroom house for $500,000 in suburb Y, or a new 3-bedroom unit in the same suburb. Which should you choose?

As we flesh out an answer, here’s a general investing principle to remember:

You are better off purchasing the worst house in the best suburb you can afford, than the best house in the worst suburb you can bear living in.

Have you heard the saying “Land appreciates while houses depreciate”? It’s true. What makes a dwelling more valuable is not the bricks and sticks it is made from, which will deteriorate over time and require maintenance, but rather its land size and proximity to appealing amenities. This is sometimes paraphrased as “location, location, location”, but that is only partly true. For land to be valuable it must be usable and it must be scarce; land that is not usable or scarce is unlikely to be a good investment.

The principle mentioned above captures the reality that a bad house on good land will be a better investment than a good house on bad land.

Another general principle to remember is:

Buy the best-worst house you can afford rather than the worst-best unit.

In other words, dollar-for-dollar you are better off buying a run down house in your chosen location than a spruced up unit. Why? Because over time the land will become more valuable (as it comes more scarce) whereas the unit will depreciate in appeal as it suffers wear and tear from use.

It is true that your rental yield will probably be lower for the house, but whatever you miss out on in income should be well and truly made up for in extra capital appreciation over time.

These two points made, you may be faced with limited deposit capital and/or borrowing ability. If so, then a unit can still be a smart investment if it helps you get in the property market, rather than having to watch on the sidelines as property prices increase faster than your ability to save.

If you are considering purchasing a unit, then here are four recommendations to remember:

Buy old, not new. Older units are usually bigger, and you won’t pay a premium for shiny and new which is only temporary anyway.

Don’t get attached. The less attached a unit is, the better. If possible, avoid common walls abutting living areas.

Less is better. The fewer units on (or in) the block, the better. The more dwellings there are, the less scarcity there is, and the more cramped the living conditions, and the less land that would be “yours”.

Aim high, or low, not middle. You are better off with a ground floor unit (for convenience), or a high floor unit (for the view), rather than being in the middle with the masses.

To conclude, data that tracks rental yields and movements in median dwelling prices over time indicates that while units deliver a better rental yield than houses, houses outperform in terms of capital appreciation. Given Australia is largely a growth (rather than income) property market, you’re better off with a house than a unit, and better off with a unit than nothing at all.

Source:

https://www.propertyinvesting.com/units-houses-make-better-investments/

In reality, Australia’s residential investment market is dominated by people who, having bought their own home, have moved onto buying an investment property. These small-scale investors own 83 per cent of all investment properties.

Previous research shows that real estate investors tend to be married, wealthy males with high income and full-time employment.

A typical rental housing investor is a high-income earner or family partnership, owning one or two dwellings as an extra income source. The probability of becoming a residential investor tends to increase with age and homeowner status, but declines after the age of 65.

With home ownership rates in Australia at around 70 per cent, the Australian Bureau of Statistics (ABS) reports that residential investment represents, on average, 35 per cent of all housing finance, while the rest are all owner-occupiers. This means residential investment is an important part of the mortgage market and banking system.

Most residential investment is centred around rent or resale; only a small proportion goes on construction of new homes. And residential investment by corporations or big companies represents only 8 per cent of the market.

Private data from a major mortgage provider used in my research (for the period 2003-09) reveals what the typical real estate investor looks like. They are on average 42 years old, 72 per cent are married, and fewer than two-thirds of investors get finance with a co-borrower. Only a third of investors are female.

According to the same data, residential investors have an average net monthly income of $8,600, or $103,200 a year. But if we exclude the 100 investors with a net monthly income over $100,000, the average net monthly income becomes $6,617, or $79,404 a year.

Residential investors, financing the property with a mortgage, have on average $934,091 in net wealth (50 per cent of investors have $581,541 in net wealth). Some of them have diverse portfolios; six sources of investors also own shares with an average value of $4,884.

The data also show that direct residential investors are mainly professionals, in management positions, small business-owners, or workers with a skilled trade. Overall, 27 per cent are self-employed, relative to the 19 per cent of self-employed owner-occupiers.

Where they invest

The data reveal that direct residential investors invest mainly on existing houses, as do owner-occupiers when buying a property. The ABS reports only 3 per cent of investors’ financial commitments are destined for construction of new dwellings.

Our data shows that residential investors are more willing to invest interstate or in a different postcode than owner-occupiers. While almost half of residential investors invest in a property located in a different postcode to where they live, 11 per cent of residential investors buy properties in states other than the state where they live.

Most residential investors choose rural and regional areas to invest. Many residential investors choose to buy property in big metropolitan cities like Sydney and Melbourne.

However, the top 10 postcodes chosen by residential investors to buy property (between 2003 and 2009) include Cairns (QLD), Mandurah (WA), Torquay (VIC), Mackay (QLD) and Launceston (TAS).

Why do they invest?

Our research shows the main reasons for accessing finance to buy a house, other than to live in it, are income and wealth accumulation.

Some investors invest because they see it as a long-term, secure, “bricks and mortar” investment. To these investors other types of assets (such as shares and bonds) may seem harder to understand and it may be more costly to enter these markets.

A proportion of real estate investors see it as a source of permanent income, while others speculate on the potential capital gains in real estate and invest expecting to increase their wealth.

This reason becomes more prominent during periods of strong house price appreciation. For example, between 2003 and 2009 year-to-year average house price inflation has been 8.9 per cent.

Academics have also argued that the Australian taxation system motivates — rather than facilitates — housing investment, as investors are able to access 50 per cent deduction on capital gains and negative gearing. Another motivator to invest in real estate may be more mortgage finance access; for example, between 2003 and 2009 the average 12-month housing credit growth has been of 14.6 per cent.

Of course there are other reasons to invest, such as moving up or down and maintaining other property as an investment, or getting a holiday home and keeping it as an investment too. There are also “unintentional” real estate investors that may have inherited or acquired property.

Most residential investors are your average Australians, who invest in rural or regional areas as a secondary source of income and to gain equity. So when thinking about who is the typical Australian retail investor, you could probably look at your neighbour.

Source: http://www.abc.net.au/news/2017-08-01/who-is-the-typical-investor-in-the-australian-property-market/8764504

What is a dual occupancy property?

A dual occupancy property offers two incomes to an investor by way of two separate living spaces and therefore two tenancy opportunities. Common examples of a dual occupancy property include a granny flat, duplex or dual-key property. Although these property types all have the potential for rental income, there are various differences between them which will affect investors.

Different types of dual occupancy properties

• Granny flats: typically the size of a studio or one bedroom apartment and located to the rear of an existing, larger property. Generally speaking, a granny flat will require council approval before building the property, as well as being allowed to accept tenants into the property.
• Duplex: two properties which are adjoined or share common walls, such as a house divided into two separate properties, and can therefore be sold separately.
• Dual occupancy: not too dissimilar to duplexes, dual occupancy properties share common land but do not have to be adjoining or share common walls.
• Dual-key property: typically one property with a shared front entrance door and hallway and potentially additional living spaces such as the kitchen and living room. However there is a section within the property which is locked and rented out to a separate tenant, for instance a bedroom and ensuite.

The benefits of dual occupancy properties

There are several benefits of dual occupancy investment properties. The main factor being the ability to maximise the potential of one block of land. Essentially this means improved cash flow and reduced maintenance costs. Furthermore, they are a smart decision for investors looking to grow and diversify their property portfolio.

Source: build, 2016: http://www.build.com.au/blog/5487

A dual occupancy property delivers a superior cash flow and therefore allows an investor the opportunity to pay off their mortgage at a faster pace.

To discuss your dual-occupancy  investment options, contact CPS Finance today.

We take a retrospective look at median dwelling values across the suburbs of Australia to show the deterioration of more affordable housing across the capital cities.

A retrospective look at median dwelling values across the suburbs of Australia shows the bracket creep that has occurred over the current growth cycle, highlighting the deterioration of more affordable housing across the capital cities over the past five years.

At the end of 2016, 7.6% of suburbs nationally had a median house value under $200,000 and 5.9% of suburbs had a median unit value below $200,000.  To put these figures into some perspective, 11.4% of suburbs had a median house value of at least $1 million and 3.0% of suburbs had a median unit value of at least $1 million.

Over the five years to the end of 2016, there has been a substantial decline in the proportion of suburbs with a median value below $400,000.  At the end of 2011, 53.5% of suburbs had a median house value of less than $400,000 and 69.8% of suburbs had a median unit value of less than $400,000.  By the end of 2016, the proportion of suburbs with a median value of less than $400,000 had fallen to 41.0% for houses and 55.3% for units.

Suburb median values by value range,

National, December of each year

A five year retrospective look at the individual capital cities highlights the significant shift in the proportion of suburbs with a median value under $400,000, particularly in Sydney and Melbourne.

In 2011, the proportion of total suburbs with a median house value below $400,000 across each capital city was: 21.2% in Sydney, 28.9% in Melbourne, 40.9% in Brisbane, 40.5% in Adelaide, 31.1% in Perth, 69.2% in Hobart, 2.1% in Darwin and 1.1% in Canberra.  Units offer a more affordable option highlighted by the proportions of suburbs values below $400,000 at: 38.8% in Sydney, 48.2% in Melbourne, 81.7% in Brisbane, 94.3% in Adelaide, 59.8% in Perth, 92.7% in Hobart, 53.3% in Darwin and 44.6% in Canberra.

Suburb median values by value range,

Capital cities, December 2011

By 2015, the proportion of suburbs with a median house value below $400,000 had shifted to: 1.2% in Sydney, 12.2% for Melbourne, 31.4% in Brisbane, 29.5% in Adelaide, 15.5% in Perth, 55.7% in Hobart and 0.0% in both Darwin and Canberra.  For units, the proportion of suburbs with a median value of less than $400,000 in December 2015 were recorded at: 10.9% in Sydney, 34.9% in Melbourne, 64.4% in Brisbane, 87.7% in Adelaide, 37.2% in Perth, 88.4% in Hobart, 51.4% in Darwin and 50.5% in Canberra.

Suburb median values by value range,

Capital cities, December 2015

The proportion of suburbs with a median house value of less than $400,000 at the end of 2016 was recorded at: 0.1% in Sydney, 6.3% in Melbourne, 29.2% in Brisbane, 28.0% in Adelaide, 18.9% in Perth, 52.1% in Hobart and 0.0% in Darwin and Canberra.  For units the proportions were recorded at: 6.5% in Sydney, 31.8% in Melbourne, 62.7% in Brisbane, 85.1% in Adelaide, 46.4% in Perth, 88.4% in Hobart, 57.6% in Darwin and 45.8% in Canberra.

Suburb median values by value range,

Capital cities, December 2016

Five years ago every capital city except for Darwin and Canberra had at least 20% of suburbs with a median house value of less than $400,000.  At the end of last year, it was virtually impossible to find houses for less than $400,000 in Sydney, Darwin and Canberra while less than 7% of suburbs had a median house value below $400,000 in Melbourne.  Across each city there has been a substantial decline in more affordable housing over the past year despite the fact that outside of Sydney and Melbourne there has been only moderate value growth over the period.

Even units have recorded a fairly substantial decline in the proportion of suburbs with a median value of less than $400,000 over the past five years.

At the end of 2016, looking at both houses and units, 20.5% of Sydney suburbs had a median value of less than $600,000 compared to 38.5% of suburbs having a median value of at least $1 million.  To further highlight deteriorating housing affordability in Sydney, 34.6% of suburbs had a median unit value of less than $600,000 at the end of 2016.  In each other capital city, a higher proportion of suburbs had a median house value of less than $600,000 than the proportion of suburbs with a median unit value of less than $600,000.

If you’re interested in starting or growing your property portfolio, contact CPS Property today.