"The word ‘consistent’
could be used to describe the performance of the Melbourne
residential property market this year.
According to REIV
research the last time the weekend auction clearance rate was below
80 per cent was in early May, 22 weeks ago.
In that time the
clearance rate has been between 81 and 86 per cent each weekend.
Over the same time last year the clearance rate moved between a low
59 and 68 per cent.
A direct comparison
between last weekend and the same one last year helps to show how
much the market conditions have improved.
On the 11th and 12th of
October last year there were 577 auctions reported, of which 356
sold resulting in a clearance rate of 62 per cent. The total dollar
value of those transactions was $193 million. There were also 572
private sale results resulting in a total value of $218 million
being sold.
Last weekend there were
599 auctions reported of which 492 sold resulting in a clearance
rate of 82 percent – 32 per cent better than last year. The total
dollar value of those transactions was $348 million. There were also
759 private sale results resulting in a total value of $348 million
being sold. This comparison shows that not only is the clearance
rate higher but there are substantially more homes being sold by
private sale, another consistent trend for the year. The year to date clearance
rate, currently as 81.4 per cent is almost identical to the one
recorded last weekend.
The ongoing strong results from the property
market are a reflection of the health of the Victorian economy and
they are expected to continue as long as the current situation
prevails."
Article quoted from REIV
website
"Victoria is currently
experiencing some tightest rental market to date, which should
provide some encouragement to investors to either enter the market
or increase their residential property portfolio. If you are
considering entering the residential property investment market
there are some terms that you will see commonly used, equity,
capital growth, investment return and gross rental
yield.
Equity. This is the difference between the
property purchase price and the amount owed on the loan. In other
words what you own not what you owe. Generally equity increases
over time in line with capital growth and a reduction in the
debt.
Capital growth. The term capital growth is
often used in real estate to describe the increase in the price or
value of a property. Capital growth is the annual compound rate of
growth in the value of the property. For instance if you bought a
house in Coburg for $538,500 and twelve months later it was worth
$550,000, the capital growth is the difference between the two,
$11,500, divided by the purchase price. This equates to 2.1 per cent
over a year. Capital growth is also known as capital
appreciation.
Investment return. From a real estate
perspective the term investment return is very similar to the
capital growth figure. It is the percentage of change in value
of the investment over a given period of
time.
Gross rental yield. Gross rental yield is a
term that is frequently used to compare the investment return on a
property investment. To calculate the amount you divide the yearly
rental income by the purchase price of the home. For instance the
yearly rental income on a 3 bedroom house in Coburg is
$20,000 and the median house price is $550,000 resulting in a gross
rental yield of 3.6 per cent."
Article quoted from REIV
website
