Should you invest in property? What do the experts say?

The "ANZ Property Outlook January 2008" produces the following statements and graphs.

"In raw terms, since 1984, residential property has enjoyed an extraordinary compound annual total return of 13.4%, only slightly below that of equities (13.8%) and far above both commercial property (10.3%) and bonds (9.4%)."

"But in risk-adjusted terms, residential property has delivered vastly superior returns to all other asset classes. ... In risk-adjusted terms since 1984, residential property returns have more than tripled those of equities and more than doubled those of commercial property and government bonds."(ANZ do not state how they calculate the risk adjustment, but the chart below reflects the fact that residential prices show far less price volatility than other assets.)

So where should the astute investor be looking?

Herron Todd White (HTW) is the largest independent property valuation and advisory group in Australia, with over 400 staff across 40 offices. They are independent because they only conduct valuations: they neither sell nor develop property. HTW's April 2008 "This Month in Review" consists of a 47 page report assessing the position of each residential region in the property cycle, ranging from:
1. Bottom of market
2. Start of recovery
3. Rising market
4. Peak of market
5. Declining market

Astute investors aim to purchase in phases 2 (start of recovery) and 3 (rising market).

HTW's view is that all capitals are at the "peak of market", except Sydney, which is in the "rising market" stage.

The fact that Sydney is well behind the rest of Australia, and is due for a catch up, is evident from the following ANZ chart.

As ANZ says, "Our projections suggest a critical and rapidly expanding shortage of housing in Sydney will provide significant support to house prices and rents". This is based on a number of factors including "the vacancy rate falling to a 19 year low of 1.4% in September" and "NSW home building approvals have slumped to lowest level on record".

We have sourced some excellent boutique residential properties in great areas of Sydney with gross yield around 5%.

In Sydney's highly-desirable northern beaches we have brand new, and off-the-plan, units from $385k (one bed) and $499k (2 bed) all with parking.

In Sydney's exclusive lower north shore (Crows Nest) we have two sets of superb-quality off -the-plan apartments:
1. Due for completion in Q3 2008, 1 bed from $385k, and 2 bed with parking from $590k
2. Due for completion in Q1 or Q2 2009, very large apartments, all with parking, from $480k (1 bed) and $650k (2 bed).

For those looking outside Sydney, we have also available excellent house & land packages in south east Queensland, close to the coast, with rental yield of around 5% gross and good capital growth prospects.

If you have interest in providing your clients with attractive investment property with strong prospects of capital growth and yield of around 5% gross (residential) or over 6% net (commercial) we can provide you with: