40 min
#60: Why established properties outperform The Property Trio
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- Investing
https://propertyplanning.com.au/propertyplannerbuyerprofessor/ This week, the Property Planner, Buyer and Professor turn their thoughts to established properties and why they offer superior capital growth prospects. In this episode David Johnston, Cate Bakos and Peter Koulizos take you through: 1. Established houses tend to be located close to the CBD, and generally the older the property; the closer to the CBD, (being the central location for the majority of jobs and the highest land value per square metre.) 2. People want to live close to where they work, but will that be the case going forward as many businesses comfortably shift to 'working from home' life? 3. Established properties are more likely to have an optimal land to asset ratio, with the majority of the value invested in the appreciating component of the asset - the land! 4. New estates may offer larger blocks of land than inner established areas, but that doesn't equate to a higher land to asset ratio. In fact, the abundance, (and lack of scarcity) of land in these new estates means that they have a lower value per square metre. 5. You don't pay a 'brand new premium' for established property. Paying for a brand-new property means that you also pay for the developers profits and cost of labour. For established property, you pay only 'market value'. 6. The NIMBY effect (Not in my backyard!) - Long established communities have great influence over councils, (including the implementation of heritage listing and overlays) that make it significantly more challenging to increase supply through development in the preferred pockets and streets. 7. Melbourne's highly sought-after ring of suburbs located 5-20km from the CBD have seen very little growth in population in the last 30 years. This phenomenon has directly impacted property price growth in such areas. 8. Period homes have architectural appeal and features that Australian's love, increasing the demand for those properties due to the irreplaceable nature of these elements. 9. And of course, our 'gold nuggets'! Visit the show notes - https://propertyplanning.com.au/why-established-properties-outperform/
https://propertyplanning.com.au/propertyplannerbuyerprofessor/ This week, the Property Planner, Buyer and Professor turn their thoughts to established properties and why they offer superior capital growth prospects. In this episode David Johnston, Cate Bakos and Peter Koulizos take you through: 1. Established houses tend to be located close to the CBD, and generally the older the property; the closer to the CBD, (being the central location for the majority of jobs and the highest land value per square metre.) 2. People want to live close to where they work, but will that be the case going forward as many businesses comfortably shift to 'working from home' life? 3. Established properties are more likely to have an optimal land to asset ratio, with the majority of the value invested in the appreciating component of the asset - the land! 4. New estates may offer larger blocks of land than inner established areas, but that doesn't equate to a higher land to asset ratio. In fact, the abundance, (and lack of scarcity) of land in these new estates means that they have a lower value per square metre. 5. You don't pay a 'brand new premium' for established property. Paying for a brand-new property means that you also pay for the developers profits and cost of labour. For established property, you pay only 'market value'. 6. The NIMBY effect (Not in my backyard!) - Long established communities have great influence over councils, (including the implementation of heritage listing and overlays) that make it significantly more challenging to increase supply through development in the preferred pockets and streets. 7. Melbourne's highly sought-after ring of suburbs located 5-20km from the CBD have seen very little growth in population in the last 30 years. This phenomenon has directly impacted property price growth in such areas. 8. Period homes have architectural appeal and features that Australian's love, increasing the demand for those properties due to the irreplaceable nature of these elements. 9. And of course, our 'gold nuggets'! Visit the show notes - https://propertyplanning.com.au/why-established-properties-outperform/
40 min