Share market falls make property a more attractive investment

By Michael Matusik
Tuesday, 22 May 2012

 

Things in Europe look worse that many predicted; the Queensland market has just come off a building boost and is waiting for the $7,000 stamp duty relief; NSW’s housing incentives will end on June 30, so investor attraction is there; China’s short- to medium-term growth prospects now look a bit dicey, and we are waiting with bated breath for a federal election. For mine, we need a Republican in the White House.

In short, our frugal mindset is now turning to concern, maybe even fear. The share market falls, plus changes to superannuation, make property investment potentially more attractive. But activity will be slow and all buyers will need thorough third-party endorsement.

Heck, things must be pretty bad – beer consumption is at a 65-year low and total alcohol consumption has fallen for the fourth straight year.

We need to further tighten outgoings, increase our service level, with a return to focus on the old-fashioned things like ringing clients, meeting face-to-face, breaking quotes/processes up into bite-sized and digestible pieces.

We will look for positives in all this gloom, but don’t push the envelope too far. Our new direction will work a treat and fulfil the market’s need.

According to the latest statistics from the Australian Bureau, the money spent by Australians on renovating their homes rose by 2% over the last 12 months. This compares to an 8% fall in the amount spent on buying a new dwelling across the country.

Renovation activity is strongest in Tasmania, Victoria, Canberra and South Australia, but is down in the Queensland, New South Wales and the Northern Territory.

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When asked “If you were renovating to sell, where would you spend your money in order to gain the best return?” our recent online opinion poll found that kitchens won hands down. Just over half (55%) of our respondents picked renovating a kitchen as the best way to secure the highest return from renovating a residential property.

Painting, with 26% of the vote, came in a clear second, followed by doing up the garden with 10% of the votes followed by renovating the bathrooms (9%).

When it comes to improving the garden, our research has found that a water-wise home will also attract a premium and may, in the future, be a major contributor to achieving a sale.

Another recent website poll by us looked at rain tanks in terms of whether they added value to a home. Two-thirds of our respondents thought they did.

We have started a weekly poll. It will be included as part of the framework in the new-look Matusik Missive, out in early June.

This week’s question about the best place for long-term capital growth can be viewed here. Our polls will only take 10seconds of your time. Go on, give it a go! They will be a good straw test. Results will be reported on the website every Friday and via the new missive and through social media, such as Twitter and Facebook.

Chins up, heads down and try to smile…. laugh if you still are in good health.

Michael Matusik is the director of independent property advisory Matusik Property Insights. Michael is a 25-year veteran in the industry and his firm has helped over 550 new residential developments come to fruition. Michael has launched a new initiative, called Think Matusik. Think Matusik brings together expert opinion and select property opportunities.