LGen Property

19/08/2020

The well-watched Westpac Consumer Sentiment Index was borderline atrocious, and highlights the near term volatility of the index.

The 'time to buy a dwelling' index was -4.4% MoM, but most of this was surprisingly in Queensland, while the 'House Price expectations' index weakness -16.2% was concentrated 'unsurprisingly' in NSW/Vic.

For those able to turn renting into buying in the current environment, there is a perfect storm at this point in the cycle. From now into the end of 2020...timing looks excellent!

The cost to rent vs buying with current interest rates is marginal, vendors price expectations are being adjusted downward with lower 'expectations' of prices, further stimulus likely on the cards, and risks are lowered with average holding periods of 7+ yrs.

Get hold of your nearest finance broker and get yourself ready!

13/07/2020

Is Australia on the brink of a domestic travel boom? Read more

Is Australia on the brink of a domestic travel boom? Despite Victorian lockdown and border closures, the COVID pandemic could see Australian’s on the ... 31 comments on LinkedIn

07/07/2020

Last week's Demographic data, showed how important international students are to Australia's Net Overseas Migration, with education-related migration representing ~47% of total NOM. Read more

Last week's Demographic data, showed how important international students are to Australia's Net Overseas Migration, with education-related migration representing... 34 comments on LinkedIn

06/07/2020

Corporate Office downsizing: Implications for the Residential Property market.Read more

Corporate Office downsizing: Implications for the Resi Property market. If you believe the working from home phenomenon will accelerate the downsizing... 29 comments on LinkedIn

04/07/2020

Western Sydney is fast becoming the economic juggernaut it was expected to be! Amazon is the latest company to invest in the region. Read more

Western Sydney is fast becoming the economic juggernaut it was expected to be! Today's report in the The Australian Financial Review of Amazon's expanded... 26 comments on LinkedIn

03/07/2020

Is Australia on the brink of a tsunami of foreign investment? Read more https://www.linkedin.com/posts/ben-weeding-8150b136_propertyinvestment-realestate-property-activity-6683138146538004480-l2BO

11/06/2020

The Australian Financial Review and Michael Bleby, have reported the 2nd larger scale Build to Rent project to be undertaken (this time in Melbourne) in as many weeks, with Australian Super backing the plan. For the big Super Funds and Life Insurance companies, despite the current tax implications on MIS structures, this type of build could become more the norm, with interest rates set to remain very low for the foreseeable future. A 3.5%+ yield from Build-to-Rent-to-Sell projects look attractive, even when they give the tenant the option to BUY at year 5 in today’s money! It's essentially a higher yielding bonds. For the average investor though the prospect of a larger amount of supply in the market makes Real Estate a less attractive investment! (See yesterday’s Westpac Consumer Sentiment survey).
The art will be to look for a specific type of property that will nearly always have good underlying strong demand, and where the emotional dollar will be spent, to give the asset the prospect of above average returns!

09/06/2020

Some good news on the economy. Read more below.

The chart below is a 2-10 year yield spread of Aust Govt Bonds.
It indicates that the yield curve is steepening quickly (similarly in the US).
In its simplest terms, it implies investors believe that interest rates will stay low in the short term, but the economy will continue to grow over time, and thus there will be a need to raise interest rates further into the future... rising line = steeper yield curve = better outlook.
It is an extremely positive forward indicator, especially given what looked like doom and gloom in the press last week!

Other good news:
- UBS upgraded the banks on the ASX200
- UBS, AMP, Corelogic and SQM all admitted their negative forecasts on dwelling price downside was overstated
- The Govt initiated stimulus to the housing market, which despite the naysayers, see forward looking investors (like bond traders) react positively.
- Iron Ore prices >$US100/t and likely to zoom higher this week after Vale shuts down their mines.

Be optimistic....
Chart Source: Bloomberg

04/06/2020

We highlighted in our recent webinar that Australian Building Approvals are at a point of equilibrium of supply and future housing demand.
The risk to a future deficit of housing was very real and could result in significant affordability challenges in the future.
Today's announced stimulus goes some way to addressing this and stimulating construction activity which represents ~10-13% of Aust GDP.
Links to the webinar and today's story, click here https://youtu.be/I91uwHgGS_E

Ben Weeding, LGen's property strategist, provides some insights and analysis of the property market as the country moves into a post COVID-19 phase.

01/06/2020

We currently have a rapidly changing property market in Australia!

It is incredibly difficult to digest all the information and anticipate what is going to happen!

We have done our best to try and bring the important information to the surface in this 14 minute webinar you can access on our website! www.lgenproperty.com.au

We talk about:
- The important cyclical factors that will impact the market
- Why first home buyers are protecting entry level pricing in the market
- Expected structural shifts that could occur VERY soon!
- Property Trends we are focussing on

In essence, answering the question... Is now a good time to buy?