Lift-Off: Australian property skyrockets to $9.1 trillion

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Property skyrockets to $9.1 trillion

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Disclaimer: Information contained herein is gathered from sources we deem to be reliable however warrant no guarantee as to the accuracy of third party data. It is not intended as legal, financial or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature you should seek advice from a qualified and registered legal practitioner or financial or investment adviser. All rights reserved.

October 2021

Welcome Thank you for reading this report.

Freedom Property Investors is not a property company. We are a community of investors accessing the hidden market of positive cash-flow properties located in high growth locations across Australia.

Led by Scott Kuru and Lianna Pan, two of Australia’s most successful property investors, we aim to provide our members with investment properties that outperform market averages for both capital growth and rental yield.

Lianna Pan is one of only 3,000 qualified Actuaries in the country, and together we have perfected a detailed methodology

covering all fundamental aspects affecting the residential property market. Spending tens of thousands of dollars on our research, we also employ a full-time research team with access to property specific data not easily accessible to the everyday investor.

Utilising a wide team of over 140 experts around Australia, we work toward a common goal of helping create financial freedom for our members through property.

We hope you enjoy this report and we look forward to helping you leverage our data insights to achieve your financial freedom.

Lianna Pan

Scott Kuru

Founder & Director of Research

Founder & CEO

A series of fortunate events has seen the annual growth rate of property increase at its fastest pace in over 30 years.

But, if you have been considering purchasing an investment property, you will be glad to know that the current boom we are experiencing is far from over.

With a national median property price of $674,848 recorded in September, the yearly change in dwelling values is now 20 per cent higher than the same time last year.

The increase coincides with news that the total value of Australian residential property has just reached a new record of $9.1 trillion – growing by over $1 trillion in only five months.

To put that into perspective, Australian residential property is now worth 28% more than the estimated value of superannuation, the ASX and commercial property combined.

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Australian Property skyrockets to $9.1 trillion

Change in Dwelling Values as of September 30, 2021 Month

Quarter

Annual

Total Return

Median Value

Sydney

1.9%

5.7%

23.6%

26.5%

$1,056,093

Melbourne

0.8%

3.3%

15.0%

17.9%

$775,142

Brisbane

1.8%

5.9%

19.9%

24.7%

$625,291

Adelaide

1.9%

5.5%

19.1%

24.0%

$529,376

Perth

0.3%

1.2%

18.1%

23.2%

$524,589

Hobart

2.3%

6.4%

26.8%

32.5%

$659,622

Darwin

0.1%

1.7%

20.2%

26.8%

$481,767

Canberra

2.0%

6.9%

24.4%

29.0%

$838,904

Combine capitals

1.5%

4.7%

19.5%

22.9%

$759,753

Combined regional

1.7%

6.1%

23.1%

28.6%

$503,609

National

1.5%

4.8%

20.3%

24.1%

$674,848

Source: CoreLogic

Another hot topic recently has been APRA’s decision to raise the interest rate buffer when assessing home loans. Although the media will naturally want to hype this news, the increase is only nominal at just half a ercent – 2.5% to 3%.

In real terms, this means the average family’s borrowing capacity might decrease by $35,000.

However, non-bank lenders (who are not regulated

by APRA) will still provide viable lending solutions at competitive rates.

The APRA announcement is a timely reminder that it is indeed a good thing for investors to have an organisation whose job it is to ensure a healthy lending sector. A healthy lending sector is closely intertwined with a healthy real estate sector. Too many risky loans can have a contamination effect on what is otherwise a healthy market. Ensuring a healthy property market plays an important role in ensuring household wealth levels remain high.

In fact, in the June quarter this year it was reported that Australian household wealth grew by more than $730 billion to reach a new record of $13.4 trillion. Over $570 billion (78%) of that growth came as a result of owning real estate.

Australian Property skyrockets to $9.1 trillion

05

Growth HouseholdWealth: Wealth:Real RealEstate Estate Superannuation vs Shares Growth in in Household vsvs Superannuation vs Shares Residential Land and Dwellings

Residential Land and dwellings

Superannuation

Superannuation

Shares and other equity

Shares and other equity

10,000

$ billions

7,500

5,000

0,000

Dec-1989 Sep-1990 Jun-1991 Mar-1992 Dec-1992 Sep-1993 Jun-1994 Mar-1995 Dec-1995 Sep-1996 Jun-1997 Mar-1998 Dec-1998 Sep-1999 Jun-2000 Mar-2001 Dec-2001 Sep-2002 Jun-2003 Mar-2004 Dec-2004 Sep-2005 Jun-2006 Mar-2007 Dec-2007 Sep-2008 Jun-2009 Mar-2010 Dec-2010 Sep-2011 Jun-2012 Mar-2013 Dec-2013 Sep-2014 Jun-2015 Mar-2016 Dec-2016 Sep-2017 Jun-2018 Mar-2019 Dec-2019 Sep-2020 Jun-2021

2,500

Source: Australian Bureau of Statistics Historically, property in Australia has proven to be the best investment you can make, greatly outweighing that of superannuation and shares.

What we are seeing at the moment is the perfect storm of factors that is resulting in boom conditions in many suburbs across the country. No doubt you’ve probably already witnessed this yourself, as local estate agents once again flood our letterboxes with flyers promoting their success.

“Everyone should aim to have at

One of the most prevalent factors to the current conditions is the national housing supply, which is

thank you. I promise.” says

currently sitting at an 11-year low.

06

As expected, the shortage of listings on the market continues to drive asking prices, as well as weekly rents, higher and higher. What market principles suggest is that, when supply is low and demand is high, there is upward pressure on prices.

Australian Property skyrockets to $9.1 trillion

least one investment property, if not more. Your future self will Scott Kuru.

300 Apr-2021

Feb-2021

Dec-2020

Oct-2020

Aug-2020

Jun-2020

Apr-2020

Feb-2020

Dec-2019

Oct-2019

Aug-2019

Jun-2019

Apr-2019

Feb-2019

Dec-2018

Oct-2021

400

Oct-2021

500 Aug-2021

600

Aug-2021

National Average WeeklyRent Rent for for Houses National Average Weekly Houses Jun-2021

Source: SQM Research

Jun-2021

Apr-2021

Feb-2021

Dec-2020

Oct-2020

Aug-2020

Jun-2020

Apr-2020

Feb-2020

Dec-2019

Oct-2019

Aug-2019

Jun-2019

Apr-2019

Feb-2019

Oct-2018

400,000

Dec-2018

Oct-2018

Weekly rent ($)

Asking price ($)

National Average AskingPrice Price for National Average Asking forHouses Houses

800,000

700,000

600,000

500,000

Source: SQM Research

Australian Property skyrockets to $9.1 trillion

07

Continued price growth in September resulted in a national growth rate of 1.5 per cent with both capital cities and regional markets performing strongly.

Not surprisingly, the recent results remain largely driven by record low interest rates and climbing rents. First time buyers are even now using the property market to their advantage and buying an investment property instead of a home to live in.

A housing market which continues to grow rapidly can become too expensive for many buyers. When this happens, a good strategy is to rent where you want to live, and buy where you can afford.

Across our capital cities, the combined median price for property is $759,753 as of September. With regional markets appealing to many from a lifestyle perspective, they also offer a combined median price of $250,000 less than the combined capitals.

As our property market continues to go from strength-to-strength, what lies ahead beyond the

easing of restrictions and border re-openings could signal even greater growth.

Many investors will agree that times of economic uncertainty often produce the best buying opportunities. In Australia, we have again witnessed rapid property value growth amid challenging conditions to say the least.

“When you have a combination of all these factors impacting the housing market, you get certain opportunities that don’t usually exist in normal conditions.

The difference this brings can ultimately determine when and how you retire.” says Lianna Pan.

Month-on-month Change Walues Month-on-Month Changein inDwelling Dwelling Values Combined Capitals Combined capitals

Combinedregional Regional Combined

3.0%

2.0%

1.0%

0.0%

Se pO 201 ct 9 N -20 ov 19 D -20 ec 19 Ja 201 n- 9 Fe 202 b- 0 M 202 ar 0 Ap 202 r 0 M -20 ay 20 Ju -20 n- 20 2 Ju 02 l-2 0 Au 02 g 0 Se -20 p- 20 O 202 ct 0 N -20 ov 20 D -20 ec 20 Ja 202 n- 0 Fe 202 b- 1 M 202 ar 1 Ap 202 r 1 M -20 ay 21 Ju -20 n- 21 2 Ju 02 l-2 1 Au 02 g 1 Se -20 p- 21 20 21

-1.0%

Source: CoreLogic

08

Australian Property skyrockets to $9.1 trillion

Areas and regions which our members had purchased in during the first half of 2020 are now tracking well above previous median suburb values.

The government’s roadmap out of the pandemic will see interstate borders reopen and a new flourish of migration take place.

One region that has already outperformed many others, and which has a great future outlook, is in the areas surrounding Greater Brisbane.

Once international borders slowly follow, we expect there to be further demand for Australian property which will see yet another profitable period for investors.

Our research has pointed us toward several key locations where supply has not been able to meet demand. These include suburbs pinpointed to receive development funding in order to better host the 2032 Olympic Games.

Suburbs with quality infrastructure and lifestyle benefits are set to benefit greatly from this increased government spending. Housing, transport and facility improvements are already allocated that will further enhance appeal and livability across this region.

This in turn will have a great impact on future property values, meaning investors who purchase today will surely be rewarded.

We will be continuing to monitor the Australian property market closely over the months ahead.

With so much economic activity and global uncertainty, it pays to have a team you can trust to guide you every step of the way.

At Freedom Property Investors, we use a proven methodology to select high quality property in key growth locations around the country. Our members can be confident that each location we present has been hand-picked for positive cash flow and capital growth.

Together, we’ll help you invest safely and responsibly for your future.

Contact our friendly team today:

Get in touch

Source: Brisbane 2032 Master Plan

Australian Property skyrockets to $9.1 trillion

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