The Top Performing Melbourne suburbs where homes are earning more than their owners!
Dear Fellow Property Investor,
With property prices reaching record highs across the country, the humble home has become the main breadwinner in many households. In certain suburbs, homes are earning multiple times the average wage.
National property prices hit new record highs in February, up 6.15% compared to a year ago, the fastest annual rise since July 2022, according to PropTrack.
For hundreds of thousands of Australians, that growth means their homes may have generated more income than their own salaries over the past year.
New analysis has used PropTrack's automation valuation model (AVM) to reveal the suburbs around the country where the median property price has grown by more than the average Australian wage.
According to ABS data released in February, the gross weekly ordinary time earnings for full-time adults was $1,888.80 in November 2023, which translates to average annual earnings of $98,218. Given the family home is exempt from the capital gains tax, an increase in value stretches even further than the average annual wage on a dollar-for-dollar basis.
Almost 900 suburbs around the country saw their median property price grow by more than $98,218 in the year to February.
The suburbs that saw the steepest hikes in value were the premium pockets in capital cities, which is unsurprising according to PropTrack senior economist Paul Ryan.
"In exclusive suburbs the same percentage increase will lead to a larger increase in terms of dollar value. And remember too, some of those premium suburbs saw quite sharp reductions in prices in 2022 so this is prices snapping back."
But solid price growth also happened in more affordable areas, Mr Ryan added.
"Over the past year or so, we've seen even and consistent growth within cities. While we're still seeing strong demand and strong growth in premium suburbs, this is happening in more affordable suburbs too."
Melbourne property prices grew by a relatively modest 1.33% over the year, but in the exclusive inner-Melbourne suburbs of Toorak and South Yarra, houses gained $237,486 and $136,311 respectively.
Here are the suburbs in Melbourne where properties have earned the most this past year:
Let me ask you something…
Do you have a game plan for 2024?
Or will you watch savvy, educated, market-ready investors snap up all the bargains at the bottom of the Melbourne property cycle (which, in my opinion, already bottomed out in November 2022), again?
Or, will you join them?
So, what are you waiting for?
Reserve your place and join me and 55 like-minded property investors for the first Real Estate Investing Fast Track Weekend for 2024!
Apartments are selling at a loss in Australia's two biggest cities even during a housing affordability crisis, new data shows.
Record-high immigration has pushed up house prices but more inner-city units are selling at a loss in already-overcrowded Sydney and Melbourne than anywhere else.
An ultra-tight rental market and a digit-double surge in rents during the past year is also no guarantee that units will go up in value, especially if they are in a high-rise tower.
In the centre of Melbourne, 40.7 per cent of apartments sold at a loss during the December quarter - or 6.8 times the national average loss rate of 6 per cent, CoreLogic data showed.
Tim Lawless, CoreLogic's head of research, said oversupply was an issue in that part of Melbourne.
'Higher supply levels across the inner Melbourne apartments sector are likely to be a factor in this under performance, coupled with the preference shift towards lower density housing options though the pandemic,' he told Daily Mail Australia.
'Areas of inner Melbourne are now recording the highest population density of any region nationally.'
In the centre of Melbourne, 40.7 per cent of apartments sold at a loss during the December quarter - or 6.8 times the national average loss rate of 6 per cent, CoreLogic data showed (pictured is the Docklands area near the city) - and 98 per cent of loss-making sales were apartments.
CoreLogic noted that 98 per cent of loss-making sales were apartments, even though sellers in the Melbourne City Council area had held on to their apartments for an average of nine years and eight months.
Losses are more likely to occur in areas where apartments were built during the 2010s, when interest rates were lower and building activity was much stronger.
This has led to an oversupply of apartments in some areas and in some cases, quality issues.
'Unit supply was particularly elevated in the mid-to-late 2010s, buoyed by a high concentration of investor participation in the housing market and structurally falling interest rates,' CoreLogic said.
In Melbourne's city centre, the median apartments price is $473,483, or 28.2 per cent less than greater Melbourne's mid-point apartments price of $607,473.
Despite the tight rental vacancy rate, North Melbourne's apartments prices fell 0.3 per cent during the past year to $505,702.
Apartments are even cheaper at Flemington with a median unit price of $410,528.
But at Docklands, they are a bit dearer at $592,863, which would still be attainable for an average-income worker on $98,218.
In the neighbouring Port Phillip City Council area, 21.3 per cent of apartments sold at a loss, with this densely-populated area covering bayside St Kilda where the median apartments price is $530,584.
In Windsor, the median apartments price plunged by 6.2 per cent during the past year to $512,633.
Next door in the Stonnington council area, 27 per cent of apartments sold at a loss.
This covers South Yarra, a suburb with a median apartments price of $579,182, following a 4.2 per cent decline during the past year.
In ultra-upmarket Toorak, the mid-point apartment price fell by 3.4 per cent over the year to $1.033million.
So my advice is do not buy apartments in Melbourne CBD just yet…unless you are taking on a ultra long-term investment horizon and plan to hold them for 20 to 30 years!
If you have enjoyed this short email, then I encourage you to reserve your place and join me and 55 like-minded property investors for the next Real Estate Investing Fast Track Weekend for 2024!
Don’t miss out, CLICK HERE to get up to date video education from Konrad Bobilak.
Are the Stage 3 tax cuts fair (and will they happen)?
On January 15, Prime Minister Anthony Albanese said the Stage 3 tax cuts were here to stay despite Labor’s consistent reservations, according to the Australian Associated Press.
Since then, the conversation has swirled about the fairness of the Stage 3 tax cuts, which is set to cost the government $313 billion over 10 years.
By January 22, one media outlet had claimed that the tax cuts were not going ahead as planned – although at the time of writing, there has been no changes to the Stage 3 tax cuts.
With the $1,500 tax offset ending this financial year, many workers that earn under the Australian average annual salary of $90,000 will be worse off in net terms despite the tax break.
In a cost-of-living crisis, the fact that someone earning $200,000 receives a $9,075 tax break while someone earning $40,000 gets no immediate benefit can feel unfair.
Others have made the case that the tax overhaul could save $130 billion off the total bill if it were reweighted towards lower income earners.
However, the reason Australia's middle- and higher-income earners are set to receive the major tax breaks is because they bear the larger share of the tax burden, according to property expert Ben Kingsley.
“And so they should, but how much is too much?” said Kingsley, founder and director of Empower Wealth, which was recently named Liberty Australian Brokerage of the Year at the 2023 Australian Mortgage Awards.
“Squaring up the ledger a bit whilst also addressing bracket creep is a fairer outcome.”
For example, Kingsley said someone earning $70,000, currently paid $13,217 in taxes. Now double their income to $140,000. Their tax bill jumps to $36,867 – that’s 179% more than the lower earner, not just double.
With the new Stage 3 cuts, that number falls to 166% higher – ($12,592 compared to $33,592).
Watson agreed, “I think for most Australians, the tax cuts have been enacted to provide improved equality for everyday Australians, particularly for ‘middle Australia’ who do a lot of our country’s heavy lifting.”
What are the Stage 3 tax cuts?
The Stage 3 tax cuts are the final part of a three-phased tax reform plan legislated in 2019 and are set to come into effect for the 2024/25 income year.
It involves changes to personal income tax brackets, primarily affecting earners between $45,000 and $200,000.
There will be two key changes:
Merging tax brackets: The existing 32.5% and 37% tax brackets will be merged into a single 30% bracket for those earning between $45,001 and $120,000.
Raising the top tax threshold: The 45% tax bracket will start at $200,000 instead of $180,000.
What does all this mean for borrowing capacity?
In terms of borrowing capacity, prospective homebuyers will likely be the ones to benefit the most.
Borrowing power could increase by $15,000 for someone with $100,000 annual income and around $100,000 for someone on a $200,000 income – and that’s assuming APRA still leaves the buffer rate at 3% on lending servicing.
“Borrowing powers are based on your net income,”
“Banks subtract your expenses, and then lend to you based on your leftover income available. These tax cuts directly increase the leftover income. The higher your income, the larger the boost to your borrowing power is.”
“For the rare households with two income earners above $200,000, there's potentially a $200,000 increase coming your way.”
Dear Fellow Property Investor,
If you are wondering why Australia is suffering its worst rental crisis in living memory, look no further than today’s official September quarter immigration data from the Australian Bureau of Statistics (ABS).
Australia’s population surged by 660,000 people in the year to September 2023, driven by a record-high net overseas migration of 549,000:
145,200 net overseas migrants landed in Australia in the September quarter of 2023, the second highest quarterly figure on record behind March 2023:
Net overseas migration as a share of Australia’s month remained at a record high of 83% in the September quarter of 2023:
Meanwhile, natural population increase was a historically low 111,000 in the year to September, courtesy of a jump in deaths, most likely related to the baby boomers dying off and the impacts of the pandemic.
Finally, the next chart shows the explosion in net overseas migration on a historical basis dating back to Federation in 1901:
Notice how residential rents fell at the beginning of the pandemic when net overseas migration was negative, only to explode when net overseas migration surged?
The Albanese government’s extreme immigration program is why Australia has experienced such a severe shortage of accommodation and a rental crisis.
Anyone who denies this fact is a liar.
Let me ask you something…
Do you have a game plan for 2024?
Or will you watch savvy, educated, market-ready investors snap up all the bargains at the bottom of the Melbourne property cycle (which in my opinion by the way has already bottomed out in November 2022),
Or will you join them?
So, what are you waiting for?
Reserve your place and join me and 55 like-minded property investors for the Real Estate Investing Fast Track Weekend!
Did you know that a mix of middle and outer Melbourne suburbs can be revealed as the city’s best performing over the past five years, after the house price medians grew as much as 40 per cent in some locales.
Unit prices grew the most in Mitcham, where they jumped 21.3 per cent over the five years to $752,000. It was followed by Highett (19.6 per cent to $658,000) and Brighton (17.9 per cent to $1.2 million).
Melbourne’s overall median house price rose 22.1 per cent in the same period. Although it remains below its peak, the market has somewhat improved in recent weeks as clearance rates point to modest price rises and home buyers show renewed activity in expectation of a Reserve Bank rate cut later in the year.
The analysis excludes the Mornington Peninsula, but growth was even stronger in popular sea-change destinations that swelled during lockdowns such as Blairgowrie, Sorrento and Rye, which were up 66.3 per cent, 52.9 per cent and 52.8 per cent, respectively.
Let me ask you something…
Do you have a game plan for 2024?
Or will you watch savvy, educated, market-ready investors snap up all the bargains at the bottom of the Melbourne property cycle (which in my opinion by the way has already bottomed out in November 2022),
Or will you join them?
So, what are you waiting for?
Reserve your place and join me and 55 like-minded property investors for the Real Estate Investing Fast Track Weekend!
A new report is forecasting Melbourne’s median house price will surge more than $110,000 to an almost $1.16 m record high in the next 18 months – the equivalent of $200 a day.
Oxford Economics Australia forecasts that the price recovery will drive Melbourne’s median $1.04 million median house to jump 110,000, or 5.5%, close to $1.157 million by mid-2026, driven by an expected resurgence in migration from both interstate and overseas.
And it’s not just house prices, unit prices will also reach a new record.
According to the report, Melbourne’s median unit is also anticipated to increase 6.5% to an all-time $726,900 high.
Let me ask you something…
Do you have a game plan for 2024?
Or will you watch savvy, educated, market-ready investors snap up all the bargains at the bottom of the Melbourne property cycle (which in my opinion by the way has already bottomed out in November 2022),
Or will you join them?
So, what are you waiting for?
Reserve your place and join me and 55 like-minded property investors for the next Real Estate Investing Fast Track Weekend!
Did you know that over the past decade, luxury houses have experienced a far stronger rate of growth than the rest of the market?
Median priced houses have increased by 78 per cent. In comparison, houses priced in the top five per cent have doubled. A luxury house has been a good investment over the past decade. Will this strong performance continue?
A big driver of luxury house price growth is simply land value. There are only so many properties you can build in our most expensive suburbs, which tend to be located close to beaches, bays and rivers. Anything with even more unique characteristics that are hard to replicate, such as a view or close proximity to the water, are likely to have increased even further.
Another driver has been renovation activity, which surged during and immediately after the pandemic. Luxury homes have become even more expensive over time as more investment has taken place. And while it is not possible to measure, it is likely a higher proportion of well located luxury homes have been renovated than the rest of the market and almost certainly true that more has been spent on them.
A greater concentration of wealth has also likely increased prices. A recent report from Oxfam has found that the wealth of Australia’s richest people has increased at a rate of 1.5 million per hour since 2020. A lot of this wealth has been invested in luxury homes around Australia.
While luxury homes have outperformed, they have also exhibited a lot more volatility in price growth. During the pandemic, they increased far more than more affordable properties. But they also saw a much greater decline in 2022. Timing the purchase of a luxury home appears far more important than it does for buying one closer to the median.
Units have also outperformed, showing a switch in the way that wealthy people want to live. Historically, the majority of apartments built in Australia have been aimed at people that could not afford a house. As such, many of them were seen as a stepping stone to buying a house. Now there is growing demand for luxury apartments and the gap between the median and the most expensive has grown as quality has improved.
Will this outperformance continue? The Federal Government Housing Accord seeks to build more homes within established suburbs. However, it is likely that most of them won’t be built in our most expensive suburbs. Owning a luxury house or apartment in our most expensive suburbs is set to continue to be a solid investment over the next decade, providing of course you can afford to buy one in the first place.
Let me ask you something…
Do you have a game plan for 2024?
Or will you watch savvy, educated, market-ready investors snap up all the bargains at the bottom of the Melbourne property cycle (which in my opinion by the way has already bottomed out in November 2022),
Or will you join them?
So, what are you waiting for?
Reserve your place and join me and 55 like-minded property investors for the first Real Estate Investing Fast Track Weekend for 2024!
Don’t miss out, CLICK HERE to get up to date video education from Konrad Bobilak.
Dear Fellow Property Investor,
I realise that Apartments tend to get a bad rap when it comes to property investing.
And rightly so…many Melbourne suburbs such as Docklands, South Bank, and Melbourne CBD, just to name a few, have proven a complete disaster when it comes to long-term capital growth, with many apartments underperforming the rate of inflation…
But did you know that according to a recent CoreLogic report, Unit [Apartments] values in Blackburn South and Mont Albert in Melbourne’s inner east, Mulgrave, Dandenong North, Noble Park, Springvale and Springvale South in the south-east and Somerville and Frankston South on the Mornington Peninsula have more than tripled in the past 20 years.
Unit prices in Melbourne climbed faster than both Sydney and Brisbane over the past 20 years, increasing by 120 per cent, data from CoreLogic shows.
Those gains were boosted by strong population growth and lower stock levels in the 2000s.
Sydney’s median unit value increased by 115 per cent, while Brisbane lifted by 81 per cent during the same period.
Underlining Melbourne’s performance over the past two decades, units across 85 per cent of all its suburbs more than doubled in value, while prices in more than 10 suburbs tripled over the same period.
A large chunk of the growth in Melbourne unit values in the past 20 years occurred before and after the GFC with unit values surging more than 20 per cent in 2007 and also in 2009-10, according to CoreLogic.
Let me ask you something…
Do you have a game plan for 2024?
Or will you watch savvy, educated, market-ready investors snap up all the bargains at the bottom of the Melbourne property cycle (which, in my opinion, already bottomed out in November 2022), again?
Or, will you join them?
So, what are you waiting for?
Reserve your place and join me and 55 like-minded property investors for the first Real Estate Investing Fast Track Weekend for 2024!
Australia is facing two more years of house price growth, with two standout markets expected to jump the most, according to a bank expert.
Melbourne and Perth will clock the greatest increases in house prices this year, Bank of Queensland chief economist Peter Munckton found in his new year outlook report.
Depleted listings and few options for buyers will cap how far prices can decline, Munckton wrote in the BOQ's Housing Market Update.
Prices will go up this year but not by the margins seen in 2023, he predicts.
Munckton is not expecting interest rate cuts until the end of the year. Earlier rate reductions would result in more "aggressive" house price growth, he said.
Price rises will likely continue with gusto in 2025.
"Average house price growth Australia-wide is likely to be lower in 2024 than it was in 2023," he said in the report.
"The lack of new supply puts a floor as to how far house price growth can slow (at least without substantial changes in interest rates or the unemployment rate).
"Stronger house price growth is likely in 2025 as interest rates are reduced and the economic outlook improves."
Domain's latest House Price Report (December 2023), released in January, found record median prices were struck across several capital cities. It has never been more expensive to buy a house or unit in Australia.
At $1,094,539 for houses (up 2.1 per cent over the quarter, or 7.8 per cent over a year) and $638,372 for units (up 2.3 per cent over the quarter and 6.8 per cent over 12 months), the fresh levels inflict further challenges on those striving to get a foot in the market, but reflect capital gains and increased equity for those with mortgages.
Munckton said the bounce of prices in 2023 was a "surprise" to most analysts.
He said the "biggest rise" in standalone house prices in 2024 will be in Melbourne and Perth - markets which he regards as "best value" when comparing rental yield with the level of long-term interest rates.
"Melbourne price performance last year was modest by capital city standards," he wrote.
Let me ask you something…
Do you have a game plan for 2024?
Or will you watch savvy, educated, market-ready investors snap up all the bargains at the bottom of the Melbourne property cycle (which, in my opinion, already bottomed out in November 2022), again?
Or, will you join them?
So, what are you waiting for?
Reserve your place and join me and 55 like-minded property investors for the first Real Estate Investing Fast Track Weekend for 2024!
Interested in learning more about property investing in Australia? Please visit our main website InvestorsPrime.com.au for loads of free resources, articles, videos and more to help you on your investing journey.
