Price Tags Count, Postcodes Don't
An exclusive postcode is no longer such an asset as property prices continue to drop at the top end of the market.
It is the wealth belt suburbs, where prices have risen strongly for the past four years, which are now the most affected by the economic downturn. Home prices in these suburbs have fallen steeply and experts predict they will continue to fall.
In a turnaround for the property market, it is the homes priced on the lower end of the scale that offer the best value for money and potential for strong capital growth.
RP Data's 2009 Property Pulse Report has highlighted that property hot spots are those with a reasonable price tag that are well serviced by public transport, arterial roads and amenities such as shopping, school and health care facilities.
With the economy on track for a serious slowdown, those of us who are reluctant to either buy or sell can take heart from the news that property prices and rents are expected to rise by the second half of this year.
The combination of low interest rates, softer property prices and government incentives are working to drive growth, especially among those buying for the first time. In fact, first home buyers now represent 22% of all residential property transactions, according to the ABS, and this figure is expected to increase as affordability improves.
Investors too are expected to be increasingly drawn into the market as mortgage holders begin to benefit from the lowest variable interest rates ever offered in Australia.
If you are in the market for a bargain, some property experts advise to strike now before property prices start to recover by mid to late 2009. Keep in mind that some areas - such as those close to transport, shops and entertainment - offer better opportunities than others. You want to be in a situation where no matter what, you don't suffer losses, which means you want investments that will provide growth. A bargain in an area that fails to produce any growth and has a low rental yield may be too costly to hold.