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Where to make
money in 2004
Sunday Herald Sun - 11 January 2004
Capital growth soars
What do the little Melbourne suburb of South Kingsville and
part of the holiday-resort-cum-motor-bike-racing-domain Phillip
Island have in common? It may come as a surprise, but they share
one lucrative characteristic -- huge capital growth. The areas
are No. 1 in independent researcher PropertyValue.com.au's Investor
Report for Victoria.
The report, prepared for the Sunday Herald Sun, lists Victoria's
top 100 suburbs for houses and units.
The report is based on past and predicted capital growth. Smiths
Beach, on Phillip Island, is No. 1 for houses. Its compound
capital growth over the past five years is 467 per cent -- against
the Victorian average of 77 per cent.
In the past 12 months, the value of its houses has jumped 49
per cent -- more than double the Victorian average of 23 per
cent. Stockdale and Leggo Cowes and San Remo partner Michael
McLeod said Smiths Beach rated with Cowes in terms of holiday
popularity on Phillip Island. He said properties ranged from
cottages, set far back from the beach, for about $220,000 to
``foreshore houses for a million-plus''. Vacant land was rare
-- its entry level was $110,000 to $115,000. Mr McLeod said
Smiths Beach was seeing a lot of renovations and new homes.
The permanent population was relatively small. ``There's a huge
demand for holiday rentals,'' Mr McLeod said.
PropertyValue.com.au rates South Kingsville as the No. 1 suburb
for units. Its compound growth over the past five years has
been 368 per cent -- against the Victorian average of 76 per
cent.
The little-known suburb is a 0.6sq km triangle sandwiched between
Newport, Spotswood, Altona North and enduringly popular Yarraville.
Angus Scott-Walker, of Barlow McEwan Tribe First National (Williamstown),
said the area had been dormant, but had certainly picked up
in the past three years.
``It's the affordable alternative to Yarraville,'' he said.
He said his company had a double-storey unit on its books for
$415,000. Mr Scott-Walker said the suburb's Vernon St shopping
strip was being upgraded, and the industrial area to the suburb's
west would be rezoned residential and redeveloped. Jas. H. Stephens
(Yarraville) director Craig Stephens said South Kingsville had
a higher concentration of flats and units than nearby Yarraville
and Seddon. Mr Stephens said South Kingsville was like its inner-west
neighbours -- popular with people aged 25 to 35 who wanted to
break into the real estate market with a first home or investment.
``Flats and units start at $110,000 to $120,000 for a one-bedroom,
1970s brick-veneer flat,'' he said. ``You couldn't build one
for that amount these days.''
Mr Stephens said even though properties in inner-west suburbs
had soared in value over the past few years, in the Australia-wide
context they still represented good value for buyers.
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Rate rise has little
impact on stabilised market
The Age - 15 November 2003
The recent 0.25 per cent rate
rise will have little impact on a market where prices have
stabilised and the market remains buoyant.The most dramatic
impact will be felt mainly by highly geared investors and
first home buyers.
Whilst the numbers of first home
buyers seeking finance are at all time lows, the impact of
any rate rises on this sector of the market will also be to
diminish the areas first home buyers can afford. Around a
1 per cent rate rise would have a significant impact on the
general market, however, requiring around an additional 10
per cent of disposable income to service a loan.Vendors should
not be over-optimistic about prices, in any event, as the
market has stabilised and peaked over 12 months ago. Nonetheless,
we can expect around 10 per cent growth across the board over
the next 12 months.Strong auction clearance rates are expected
to continue for the traditional big selling weeks in November.Despite
some claims to the contrary, clearance rates were largely
unaffected last weekend by the rate rise. There were 738 auctions,
383 passed in properties for a clearance rate of 63%, marginally
down on 67% for the same period last year.After enjoying the
lowest rates for 30 years, there is little doubt that an increasingly
strong local and global economy will see rates rise further.People
should always borrow only what they can afford and, in this
climate particularly, factor in future rate rises.
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