Custodian
WealthBuilders
2007 Annual Report (February 2008)
2007 will be remembered for many as the year of income
growth.
Australian Property Monitor published figures
showing Brisbane, Melbourne and Adelaide leading the
country in property value growth: 20.1%, 25.2% and 20%
respectively. Median house prices are now listed as:
- Brisbane $425,368
- Melbourne $463,488
- Adelaide $400,649
Perth moved marginally from $500,486 to $508,776, while
Sydney moved from $528,105 to $553,357.
In my client newsletters during 2007, I noted the significant
shortage of land and the effect it is having on pricing.
One client who bought in Drewvale at the start of 2007,
with land settlement delayed until late 2007, saw a
massive 25%-30% growth – just in the land value
– during this period! This trend should become
even more evident during 2008, as sales data is published
and valuers begin to recognise the increases.
But 2007 was the year for income growth because we have
seen (and will continue to see) rental vacancies drop
to almost concerning levels. Towards the end of the year,
our newly-completed houses were receiving multiple –
sometimes up to 10 or more – rental applicants.
The housing shortage has begun to bite hard, and this
will continue to be a major issue for Government as it
tries to import labour to tackle the (equally acute) skills
shortage. Due to a worrying lack of co-ordination between
Federal, State and Local Governments, the situation will
almost certainly worsen in 2008-2009, particularly in
South-East Queensland – with some relief, perhaps,
in 2010.
At the same time – yes, that’s good news
for those of us who own rental properties: increased
values – and soaring rents! Many clients enjoyed
rent increases of 20% or more in 2007.
These were, of course, the proactive clients who monitored
their six-month leases, did their homework and instructed
agents to apply rent increases when each lease expired.
But I still know of many clients who have their properties
let well under market value…
The Custodian program works best when we’re proactive:
when we stay ahead of the game on market values, rental
values, interest rate lock-ins and new opportunities
in investment finance. So, in both senses of the phrase,
let us ‘look forward’ to a proactive, responsible,
positive – and prosperous - 2008.
Regards,
John Fitzgerald
CEO |
