When you look at Europe and Australia you cant help but wonder if it isn’t a great time to be on the property investment journey.

There’s good news amongst all the seeming gloom. If you are a long term or cashed up investor – your time is coming (or maybe has come).

Forecast Is Sunshine

There are plenty of people out there painting a sunny forecast for the Australian property market.

For example the QBE LMI Housing Outlook report says that Australia is well placed to deal with any economic uncertainty over the coming few years. The report even suggests that Australian property will continue to perform well over the next few years.

Poor International Comparisons

Economists compare the Aussie market to Europe and USA – so surely we must see similar declines of 30-50%. Not so according to BIS Shrapnel who cite entirely different market conditions to both regions – Australia’s demand is still strong and rentals remain high.

Strong Growth Indicators

Michael Yardney (www.propertyupdate.com.au) says that two factors affect a country’s property market:

1. Population growth
2. The wealth of a nation

Australia’s popoulation growth is the highest in the developed world. Our economy is well position to leverage any future growth in Asia – obviously we look at China on a regular basis, but nations such as India are an untapped and unknown income source. All these options and Australia’s competitiveness in this region helps Australia position well for wealth creation.

Yardney suggests the current “lull” in property prices are simply part of the a normal property cycle – further reinforcing my view that the best property investment strategy is to build for the long term not short term.

Renewed Confidence

In a recent survey 58% of respondents expected property prices to rise in the coming five years. The continued resilience of the Australian economy and our financial system give Australians a general sense of optimism and confidence. 33% of respondents said they would take out a new loan over the next 12 months – about 50% planning to buy investment property (Source www.dailytelegraph.com.au 21/11/11)

So it can be the best of times and worst of times – there are great deals to be made in property and long term investors will not only gain from future capital growth but sustainable rental yields that are still on offer in the property investment market.

This Property Pays You – Roma Qld Property of the Month

We’ve scoured the Australian investment property market and found it, an investment property that will pay you from day one.

Roma in South Western Queensland is a small town offering big opportunities with high rental yield and good capital growth potential.

Now with a positively geared property to add to your portfolio you could build on your strategy to pay off your mortgage sooner. Roma offers the benefits of long term growth and high rental yields. A well connected town, the urban centre is also a regional hub boasting schools, retail and other essential community services. Roma also has a relatively low unemployment rate of around 3% with property occupancy rates below 1%

About Roma

With a population around 7,000 people, Roma is also located in the Suarat Basin in the western Darling Downs area of Queensland approximately 480kms WNW from Brisbane. It is situated at the junction of the Warrego and Carnarvon highways and is the centre of a rich pastoral and wheat-growing district.

The local agriculture industry is worth approximately $620 million annually, 64.3% being generated from crops. 58.7% of businesses in the Maranoa are in the agriculture, forestry and fishing sector, which employs 32.7% of the region’s workforce.

A Changing Industry Mix

But the industry mix is changing.  The “mining boom” is creating towns that are producing exceptional rent and capital growth. The Queensland Resource Council estimates more than 18,000 new jobs will be created in coal seam, gas and LNG industries and another 23,000 in the minerals sector.

Since 1906 natural gas from the local area was used for lighting in Roma. The industry is now expanding exponentially, particularly with coal seam gas.

Origin Energy’s Spring Gully Coal Seam Gas Development is located about 80 km north of Roma and its projects include an 87 km gas pipeline to Roma’s neighbour town of Wallumbilla, Queensland to connect with the 434 km Roma-to-Brisbane gas pipeline hub there.

The Proposed Spring Gully Power Station is an $870 Million, 1000MW power station will provide electricity to South-East Queensland.

Great Potential

If you prefer positively geared property to balance out your portfolio, contact us quickly as there are a limited number of these properties available. In the fields below leave your name and phone number – this will be sent to our private server and we will be in contact.

Add Roma to your portfolio today.

Despite Mortgage Downturn

Property investors are continuing to grow in numbers despite an overall decline in the number of mortgages across Australia on the back of successive interest rate rises.

We look at why this is the case…

Portfolios is part of Australia’s largest independent brokerage network Australian Finance Group (AFG). Throughout March, April, and likely to continue in May, AFG confirms the emergence of a two tier mortgage market, with the proportion of investors surging as sales to owner occupiers decline.

Property investors accounted for 36.9% of all mortgages arranged in April, the highest such figure AFG has ever recorded.  This compares with 10.2% for first home buyers and 16.3% for up-graders.

The remaining mortgages in April, 36.6%, were for refinancing purposes.

Why The Confidence in the Investment Property Market?

In our opinion there are a number of reasons to be confident in the Australian property market, we offer some below and welcome your comments:

• The volatility in the share markets always serves as a reminder of the stability and strength offered through a property portfolio
• When company profits fall dividends stop – amongst all of this property investors continue to take in rental income and experience changes on an anualised basis not day by day
• Property investors – buy and hold particularly – are long term investors – minor fluctuations in the market, and they tend to be minor in Australia, do not pose a threat to long term investors
• The Australian population continues to grow at rates outstripping the supply of housing
• Australian lenders continue to operate on the conservative side of the market meaning there is confidence in the capacity for Australians to repay their debt – unlike the scenarios witnessed in the American sub-prime market collapse. See the comment by Paul Braddick below.
• Rents are continuing to climb across most markets regional and metropolitan meaning investors can get in and hang on for longer.

Property Investors Still Making Money

Property investors are continuing to see potential in the Australian property market, particularly in key market areas such as rural mining communities, growth cities such as SE Qld and Brisbane. Major growth centres, or smaller towns receiving substantial financial and infrastructure investment are good bets.

This is not so obvious as in the resource rich state of Queensland where property prices in the mining communities are still reasonable and rentals are beginning to climb even on the back of the existing investment.

Confidence Amongst Bankers

Paul Braddick, Head of Property and Financial System Research, is upbeat about the state of the housing market and is cautious when discussing the need for deleveraging of debt in the market place.

Braddick says “Economy wide debt to income ratios, gearing ratios and even debt service ratios tell us little about the underlying sustainability of household debt. The distribution of debt across the household sector, lending criteria applied and the strength of the labour markets are far more telling for debt sustainability.”

“Relative to offshore  experience, lending into the Australian household sector has remained very conservative.  This is reflected in the virtual absence of a sub-prime mortgage market and extremely low delinquency and default rates.”

Braddick’s sentiments are echoed across the banking sector.

What Next?

Braddick sums it up well:

“In the near term, Australia’s growth prospects are bright and much will depend on the RBA and government’s ability to effectively manage the expansion. Higher household debt means the RBA has considerable leverage over the household sector and their actions during the GFC should instill confidence that the present upswing in growth will be handled well”

Source AFG Mortgage Index April 2010.

Source ANZ Australian Housing Update April 21 2010

A Never to be repeated bargain! Contract has crashed, and YOU are the winner!!

One Only House/Land package in town of Chinchilla for just $375K with Ducted Aircon.

Call Keiran at Portfolios Property for details on 0447 255550

$1000 *refundable EOI, will secure this for you TODAY! This wont last!!

Find out more about this deal…

At Portfolios we have profiled Chinchilla a number of times previously in this broadcast and have profiled it on our property website.

We believe that Chinchilla is a fantastic investment property opportunity and having only a one property left at this fantastic price it will be a shame to miss out.

Chinchilla is located in the Darling Downs 250 Km NW of Brisbane. It is a popular tree change destination. With an historical capital growth of 14% and rental yield 6.6% with vacancy under 1.0 the stats really hold up for this property. If you earn in the 40% tax bracket – this property could be yours from just $43 per week.

Strong population growth continues throughout the region alongside ever increasing job opportunities and tightening rental availability has driven up rents sharply.

The town has a great community spirit and has hospitals, schools and many ammenities of normally much larger towns.

Over $10 Billion dollars is currently being spent on Coal mines, Gas pipe line, Rail line linking rural Qld, gas exploration & waste water purification.

You can find out more about Chinchilla here but we suggest you dont delay to get this great price.

What if you could own your own investment property from just $32 per week? *

You could be realising return on invesmtent in excess of 700%.

Portfolios investment property of the month is Chinchilla.

Chinchilla, located in the Surat Basin Region is undergoing a massive build up of workers and their families, with a strong capital growth over the last 3 years and with the newly signed LNG deal with China this is a place to buy.

Chinchilla is located about 200km west of Brisbane with ever increasing job opportunities. Tightening rental availability has driven up rents sharply and will continue to do so.

The region has hospitals, schools and many amenities of normally much larger towns. Over $10 Billion being spent on Coal mines, a gas pipe line, rail links, gas exploration and waste water purification projects.

The government is also investing in rail in the Darling Downs, linking this region and its rich, diverse production with export ports such Gladstone.

According to investment sources the region around Chinchilla enjoys a 98% employment rate and a rental vacancy rate around 1%.

If you earn over $80,000 per anum we’d love to talk to you about this deal. We have turn key, brand new, four bedroom homes ready to be tenanted today.

If you earn under $80,000 then you might find this deal to be worth while with low property price entry, expected capital gains and expected rental hikes in the coming 12-24 months.

Chinchilla presents a great opportunity. You can view this and other properties in this region at www.portfoliosproperty.com.au or just go to Featured Properties.

With all the talk once again of flattening markets in Australian cities astute property investors are looking to regional Australia, Queensland in particular, and with good reason.

There are plenty of opportunities to be found in regional Australia particularly in the resource rich state of Queensland where the mining boom is being re-born in towns where property values are still affordable.

I seriously think we might be staring at another Karratha in the Darling Downs and around service ports like Gladstone. Karratha is a mining town in northern WA wher the property market soared almost overnight due to the intense mining boom of the last decade. Average properties became million dollar hotspots and rents went from average to exorbitant in a short space of time.

The best part of the Darling Downs and Surat Basin area is that property prices are still reasonable and the large projects for the region are starting .It is a case of strike while the iron is hot and this one is hot.

The government and private sector have committed to investing over $10bn in infrastructure which will on its own create significant demand for housing and rental accommodation.

We mentioned in the last newsletter that the largest company to company deal Australia has ever seen has been signed between a Chinese resource company and an British mining company based in Queensland that will see Liquid Natural Gas exported from the Surat Basin to China over the next 20 years.

Putting the Darling Downs aside there’s Gladstone, and surrounding local region, already a strong infrastructure hub set to receive billions of dollars of investment on top of that invested in the last few years in new industry, mining and infrastructure.

Coming back to something more predictable are the growth spots in SE Brisbane. Brisbane and the Gold Coast is the fastest growing population centre in Australia. Areas such as Coomera north west on the Gold Coast Hinterland is a great investment.

Portfolios has investment properties available in all these areas, ask us about places like Chinchilla, Dalby, Kingaroy or Gladstone, Calliope or Coomera. Properties like these ones present a great investment opportunity to enhance any portfolio. We already have clients snapping up these properties sometimes multiples of them.

You can see some of these properties in our Featured Properties section or ask us about other opportunities for you.

The team look forward to working with you to… Make it Happen

Will the market go up?

Will the market go down?

Will it stay exactly as it is?

What is happening out there?

Without predicting the next market movements lets talk about the state of play.

Currently in Australia the economy is looking good, growth is abounding, people are sensing a greater level of confidence in the market as evidenced in a recent news article. CommSec’s National Performance Guage shows that those who owned shares and property have increased their wealth by 8% in the last year and 40% in the last decade.

The way I see it there  are two sides to the property market – what is going on locally and what is going on globally. I just want to focus on the local market for now.

The Australian Economy is performing well. Growth indicators are up, interest rates are climbing in response to strong economic growth and there has been a considerable jump in house prices.

In the favour of property investors is the growing housing shortage facing Australia. It is predicted that Australia will need an additional 800,000 properties than it is currently supplying if nothing changes between now and 2030. This is a phenominal claim, and even if something is done this is great news for property investors.

A shortage of properties means great potential capital gains, as well as increased rentals driving more cash flow positive property, or at least swallowing the gains in interest rates.

Finally, on the economy, banks continue to be tight in their lending – so getting money for that investment property is a challenge without someone like Portfolios to work for you. We have sound long term relationships with a number of banks and financial institutions , with our level of understanding of the finer details of their policies and ways we can often help you where others cannot.

So boom or bust? – the age old question is when is the right time to buy, but a long history of capital growth has taught us that now is always the right time to buy in the long run.

In the property investment market buying the right investment property should be more about where should I invest not so much when should I invest.

See what Portfolios has to say about the current market and where you should be looking.The Portfolios Property team has many developers and project marketers present their best offerings nationwide each month. It allows them to scour the Australian property investment market place to find you the best properties to a set criteria.

So lets look at an area of Australia we see great potential now as a good property investment opportunity. Gladstone NE Queensland.

Gladstone should become Australia’s next super infrastructure town. If all the projects are confirmed, it very well could be. The number of future projects (15 in total) means that Gladstone is rightly classified as a ‘super infrastructure town ‘, which will struggle to cope with the enormous influx of future workers.

Where Gladstone differs from other resource “ boom towns” is in the medium house prices. In other infrastructure towns the medium house prices are from $800,000 to $900,000, not so in Gladstone where the media house price is currently $360,000 with plenty of potential for growth.

Portfolios Property has investment properties available in and around Gladstone including the Stoneybrook and properties in nearby Calliope.

Paul Pritchett himself has been investing in Gladstone for the last 5 years with a few spec builds and some buy and hold. Paul is also planning to add more property within Gladstone to his own portfolio.

To view these and other great property investment opportunities go to Portfolios Property and view our Monthly Top 10 Properties.

Maybe something good has come out of the GFC, it appears people are thinking twice about refinancing their home to put on that extension or remodel the kitchen.

Instead statistics are showing that mortgages have swung in favour of people wanting to purchase investment property.

With the winding back of the First Home Owners Grant Scheme and three successive interest rate rises, AFG, Australia’s largest mortgage broker has seen a drop in the number of people financing to either buy their own home or refinancing to improve it.

Whilst the property market on the face of it is continuing to climb and sales are increasing brokers are acutely aware that the market is still a little hesitant following the GFC that dominated the 2009 agenda.

The January figures show that property investors as a proportion of mortgages written continue to hold steady making up 33.7% of all mortgages written the January period.

At Portfolios we believe that it makes economic sense to build your investment in property before being excessive with your own needs. This economic activity has encouraged Portfolios diversification into property sourcing for our clients as the property investment market not only remains strong but continues to grow.

Focussing on investment property finance and sourcing, we have seen a steady increase in activity in property investment both in our business and across the market further backing up these statistics. With Portfolios, our focus is financing for investing in property so you can be sure that leading into 2010 you are will be well placed in the market with us.

At Portfolios we encourage you to review your situation and find out how easy it is to start building your investment property portfolio with us. It is obligation free and could set you on the path to financial freedom.

Simply fill out our Client Portfolio Review and we will call to arrange an appointment over the phone.

The Property Investment Market

Continuing to Surprise in 2010

The property market has been nothing short of a surprise packet over the past twelve months. Whilst the world has experienced one difficulty after another economically the Australian economy has gone from strength to strength.

Whilst the global western housing market has experienced declines in excess of 40% in places such as the UK/Europe and the US – the Australian market has experienced an increase?

What is it about the Australian market that is so resilient at a time like this and are the indicators still good?

We refer now to an article issued by leading Australian Real Estate personality John McGrath – CEO of McGrath Estate Agents. In this article he outlines a number of interesting factors in the Australian market. We beleive this is an excellent summary of the Australian property market.

A strong Australian economy is the driving force according to McGrath. Most Australians have been relatively unaffected by the GFC and people have had their optimism in the property market restored very quickly.

Interest rates are still low. Even with the rise in rates experienced in the past four months, interest rates are still historically low.

Australia’s population is still growing rapidly. Nationwide – demand for housing dramatically outstrips supply and does not look like abating for some time yet. In cities such as Sydney this is even more pronounced as the lag between demand and the supply of new dwellings will take some time to filter through the market.

With the GFC people did bunker down somewhat and the result as a drop in the supply of houses for sale – 34% down on 2007, the restoration of confidence is bound to bring restoration in listing levels well into 2010.

I believe there are still plenty of good opportunities in the market for property investors both for rental yields and capital growth.

At Portfolios we have launched a property division which has the sole purpose of finding our clients premium investment opportunities. We select our properties based on strict criteria (see criteria article) and offer them to our clients.