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SSC Newspaper : September 2010
Units outperform houses By Natalie O'Brien e Strath eld property market is famous for its gracious heritage homes set on sprawling blocks of land, but there are still many opportunities for rst time home owners and investors to gain an entry into the market. A breakdown of Strath eld's property market reveals that 33 per cent of Strath eld's properties are not those stately homes but more modest units -- a fact sometimes overlooked by potential buyers. According to Australian Property Monitors, in the 12 months to June 2010, there were 357 units sold. e median price for the units in the immediate Strath eld area was $438,000 or $390,000 for the greater Strath eld area. Experts like the CEO of property monitoring company Residex, John Edwards, are recommending investors to buy second-hand units in Sydney which are close to transport hubs -- a description which ts Strath eld. "I believe that the second- hand a ordable unit market in quality locations is currently the right spot to make that next investment," says Edwards. Units have been selling recently for prices ranging from $390,000 for a two bedroom apartment on Clarence Street to $732,000 for a two-level, three-bedroom, two- bathroom unit with two car spaces on the same street. David Pisano, of LJ Hooker Strath eld, says there is strong demand in the Strath eld unit market from both rst home buyers and investors. " ere is more demand than supply at the moment," he says. "Investors are taking their money out of shares and pu ing it back into property where they are ge ing good returns." Pisano says there is currently a lot of demand for older-style units particularly the 1970s-type blocks that are in streets within walking distance to the railway station, such as Albert and Russell streets. "In the 1970s units, the levies are much lower than the [newer] high rise blocks," he says. Pisano says some high-rise units, which have li s, cost $1000 a quarter in levies but the older units are costing about half that amount. Buyers are also keen for the older units because they are in smaller blocks. An RP Data report released last month shows that units have been outperforming houses in the past 12 months. Research analyst Cameron Kusher says in RP Data's Property Pulse report units have outperformed houses over the past ve years. Kusher says that this trend has been accelerating in the past 12 months; in the year ending in June, unit values rose by 11.4 per cent compared with growth for houses of 10.2 per cent in the same period. Researchers a ribute stronger capital growth of units to their a ordability and o en strategic locations. Home loan provider Aussie has recorded a large increase in rst home buyers inquiring about nance. Aussie CEO Stephen Forges says a combination of the cooling property market, an improved economy and increased job security is luring rst home buyers back in the market. 16 Strathfield Scene SEPTEMBER 2010 PROPERTY TIPS FOR FIRST HOME BUYERS 1. Work out how much you can afford to spend before you even look, and only look at apartments or homes clearly advertised within that price range. Do not waste your energy looking in the wrong suburb – because you may end up biting off more than you can chew; 2. Look at as many properties as possible in your price range to get an idea of what you can afford. Check with Aussie’s skilled mortgage advisers to work out what loan product suits your needs – especially your borrowing limit; 3. When working out the best home loan for you, check the ongoing payments, especially in the fne print for monthly service fees and other charges; 4. If you are worried about interest rate rises, you can split your loan between variable and fxed rates and take an “each- way” bet; 5. Make fortnightly payments, not monthly, so the interest on your mortgage does not add up; 6. Remember a low start-up interest rate, or honeymoon rate loan does not mean you will be paying less for your property in the long term; 7. Make absolutely sure your home loan repayments do not overly impact on your lifestyle. You do not want to only eat baked beans for dinner for the next 25 years; 8. Be prepared for the monthly repayments to rise and fall during the life of your loan. Make sure there is some fnancial room to move if rates rise. If rates fall keep paying the same amount each month or fortnight, so you pay off your loan quicker by eating into the principal owing; 9. The best step you can take in the search for your frst property is get pre-approval for a loan, which Aussie and some other lenders can provide, so you know exactly what you can afford. 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