My TOP pick for 2018 and beyond:

I am pointing out the previous  information NOT to try to impress you, but rather to IMPRESS UPON YOU how important research is when looking into property markets.

 My research showed me clearly that Perth and then Sydney were both primed for excellent gains.

So where do I strongly feel is NOW the current best opportunity anywhere in Australia?

First, let me show you something. If you can time it right, then one of the most beneficial things about real estate is the use of leverage. By using a cash deposit, say 30-35%, and borrowing the balance, it is possible to make up to 300-400% returns on your actual cash over a few years if the market moves rapidly.

But of course, no one can guarantee such rapid moves, but long term data from Residex shows us that the average apartment price growth averaged over Australia’s largest cities has seen growth around 6.75% per year over the past 20 years.

BUT, to some people that doesn’t sound like much. 6.75% A YEAR, I can leave money in the bank at say 3% without all the hassle, extra costs, and risk!

So how much can I make?

While it is true that no one can predict the future, the past is often a guide as to what is likely to happen in the future.

As mentioned, we have seen apartment prices in Australia across its 5 major cities rise on average at a rate of 6.75% per annum over the past 20 years.

There is NO REASON not to assume the same rise over the next 20 years. (In fact there are some strong arguments to assume even better growth over the next 20 years than has been seen previously. But let’s put that aside for the moment.)

If so, then some simple math using the typical upturn property cycle time scale (14 years) and using the AVERAGE Australian apartment appreciation rate of  6.75%, shows us that you would make a 303% return.

         HOW?

Price say            $500,000

deposit 30%      $150,000

costs say 12%      $ 60,000

CASH OUTLAY:  $210,000

Sale price         $1,247,729

(after 14 years at 6.75% pa)

After sale costs 4% $1,197,819

Repay LOAN     ($350,000)

Nett cash back $ 847,819

on outlay of $210,000 makes a 303% return, substantially better than any bank interest.

And yet in spite of this, there are always those who will be thinking:

"But what if it goes bad and and I lose?"

If you truly believe that, then you definitely should NOT be investing. Real estate is not for you.

I also hear: “Over the next decade, it won’t be so good."

But even if the market only performs HALF as well a 150% return is not too shabby!

I also often hear people say “I can do better in the stock market than your quoted 6.75% return per year”

My answer to that is “Can you get a 300% plus return over the next 14 years with little risk?”

Perhaps YOU can, I certainly can’t in stocks and shares, without (in my view) a huge risk.

Then I hear, “Your example is too simple, what about Body Corporate, rates, taxes, management fees, repairs, etc., I have done my OWN spread sheets and I see that I lose money every year

When I see their spreadsheets, I see in fact theirs are too simple, usually based over the FIRST year or so only, and not bringing the tax benefits into it, rental increases, the benefit of compound growth and so on. 

Again, I say probably real estate is not for you. 

History teaches us that rents keep going up, that they cover over a period of time all those costs, and if you use leveraging and are patient, it is unlikely you will find anything that gives you such reliable safe and secure returns.

“The world is too uncertain, I will wait for a "Better Time" to Invest"
-See below, under my signature for a link  to the answer to this question 

"Is the rental market any good?"

It is important when investing to be confident that you can rent out your property. Citylife International Realty spends a lot of time researching DIFFERENT locations BEFORE deciding whether or not to market a project.

For example, we compared South Yarra, the Southbank, and the CBD (City Centre) in Melbourne before deciding that South Yarra was the clear winner last year.

Here are some the statistics we also always look at:

RENTAL OCCUPANCY RATES AND NUMBER OF APARTMENTS AVAILABLE TO RENT

This is crucial. Nothing ruins an investment faster than low rental occupancy, and/or falling rents. High rental occupancy LOOKED AT IN TANDOM WITH number available  is a strong indicator as to how fast you will be able to rent your apartment, as well as whether you can keep it occupied, AND see rental increases. 

The figure should be as high as possible, ideally consistent over the past 5 years, and not be below 95% occupancy, otherwise you could face falling rents and/or prolonged vacancy.

The less the number of apartments available to rent the better. 

STOCK ON MARKET

You should also be looking for areas with a low number of resale apartments on the market, as this helps keep prices high because of lack of choice for buyers (Supply and demand) and ALSO shows that investors are not bailing out of the properties, showing confidence in the market, and we can assume are happy with their investments. 

Large number of resales means too much choice for buyers and shows a lack of confidence.

So, where is the NUMBER ONE PICK right now in Australia?

All our research is telling us the BRISBANE market is simply head and shoulders above all other markets currently in Australia.

There are many other indicators we use, but rather than put them all into this letter, I have included many of them in this website, but the SUMMARY can be seen on the WHY BRISBANE page on this website.

The MAIN differences between Brisbane and Sydney and Melbourne for investors at present is:

1. Affordability: Residex latest data shows Melbourne households allocate 30.41% of their AFTER TAX household income towards apartment mortgage payments. 

In Sydney, the figure is 34.10%. It is generally accepted that households can allocate 33% of GROSS income BEFORE tax income towards rent or mortgages before suffering “rental or mortgage stress.” So that shows us that there is still plenty of upside in both those cities before mortgagee stress occurs.

But Brisbane households allocate even less: just 24.59%, a very low figure.

Bottom line? There is MASSES of upside still in Brisbane prices. Great news for investors!

2. Prices: The latest statistics from Residex and SQM Research shows us that Melbourne apartment prices are nearly 50% more than Brisbane. 

To enter the Sydney market investors have to pay on average over 100% more to enter than in Brisbane. Over double!

So does the investment potential in Sydney make it even worth paying an extra 100% to get into? 
Simply, NO, it doesn’t. Not in our view.

PLUS the Government Stamp Duty and charges are significantly LESS in Brisbane than in either Melbourne or Sydney.

We strongly believe a strong upturn is about to start in Brisbane.

But not just any investment will work. One of the secrets is to find areas that the Government is supporting with infrastructure improvements, and to jump in early. This has led us to look at one of the most exciting areas seen in Brisbane in decades. We have been very busy researching this area and have no hesitation whatsoever in recommending it:

WHERE TO BUY RIGHT NOW?

kind regards

Kind regards


Michael Bentley


Michael Bentley
Director, Citylife Group

ps: Take advantage NOW before 30 June 2018 when new stamp duties come in! Save 4%!

pps: Think houses are better than apartments? Residex figures show for all around Australia show that apartments and houses have increased at very similar rates over the past 10 years.

ppps: Think old is better than new? Sorry.

Read our report here: www.CitylifeNewApartments.com

pppps: “The world is too uncertain, I will wait for a "Better Time" to Invest