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The latest happenings in the Melbourne property market. For our Essays and The Secret Agent Report, see our Research page.


Category Archives For: Local Interests

Lessons from Jan Gehl

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For the fifth consecutive year, Melbourne has been named the world’s most liveable city by The Economist Intelligence Unit’s annual survey. While the ranking is based on a range of factors such as healthcare, culture, education and infrastructure, Secret Agent believes that Melbourne’s success is due to thoughtful urban design.

We owe it to Jan Gehl, the Danish architect and urban designer who worked together with Melbourne City Council in the early 1990s to transform the city from, in his own words, “neutron-bombed, not a soul – not even a cat”, into a place for people. Much of our laneway culture and outdoor dining today can be attributed to Gehl’s visionary thinking and humanistic approach to urban design.

Three main principles can be drawn from Gehl’s work:

1. Design the city at 5km/h

Cities had always been designed for people, who move at a modest speed of about 5km/h, up until the boom of the automobile in the 1960s. New cities were then designed at 60km/h – wider, further apart, less accessible by foot. Gehl’s intervention in Melbourne applied the human scale of the older, 5km/h cities, giving birth to our laneway culture that is now inseparable from the city’s identity. Narrow, dense and brimming with life, there is a certain magic that comes with compact spaces.

Thanks to Gehl and planning changes, Melbourne CBD has gained 20 hectares of footpaths over 15 years. Designing walkable urban spaces encourages people to do so, resulting in a healthier population. Think about how far a person has to walk to get from A to B; is it a comfortable distance? If it necessarily becomes a lengthy walk, can it be a safe, pleasant and eventful journey?

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Bond Yield Update: April

Yields down since last month and almost back to levels in April 2015

As part of our continued series on interest rates, Secret Agent has been tracking movements in the bond yield curve since late last year. If you don’t know why bond yields are so important for property investors, download our yield curve report.

So far this month, short, medium and long term treasury bond yields are down by between 0.06% for 90 day bills and 0.16% for 10 year bonds. This is shown below.

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Why You Can’t Trust Averages

Changes in average prices are frequently used by commentators to draw conclusions about the property market. Our recent post on Fitzroy’s true capital growth gave some insight into why statistics like averages and medians are not sufficient to make judgements on property value in a given suburb.

To find true growth in value, many factors including property size, location and renovation levels need to be accounted for. This can be done by observing resales of the same property over time, given no structural changes have occurred between sales. When we compare the annual average price changes (reported) and our own index based on resales only, we start to see that capital gains are mostly exaggerated using averages alone.

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Record Breaking Building Permits in Victoria

You might have walked the streets many times over the past 12 months and noticed the substantial number of construction sites and cranes in air throughout Victoria.

The Victorian Building Authority (VBA) has released its latest findings on reported building permits and the total value of building reported in 2015. In summary, this is what they found.

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The Secret Agent Report – The Yield Curve

We have just released our latest Secret Agent report!

When deciding to invest in the property market, most of us will first obtain approval for a loan, find a suitable property to buy and then pay off the mortgage accordingly, dealing with any rate rises as they come. It can be that simple. A more clever way to invest would be to consider how mortgage rates are likely to change in the near future, prior to making the decision to purchase. This is where the yield curve plays an important part in making general predictions about future mortgage rates.

Start reading this report by clicking on the link below:

Register to receive our report monthly and access the Yield Curve report now!

The Yield Curve Report


Fitzroy’s True Growth

Between January 2011 and December 2015, 512 houses and townhouses were bought and sold in Fitzroy. If we compare the average prices in 2011 and 2015, these have increased by about 9.4% per year. That’s the only thing this tells us: people spent more money on each house in 2015 than they did in 2011.

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As a statistic, averages can be very misleading. They ignore any changes to the mix of properties being put on the market. For example, each time a property is refurbished, extended or renovated, the value of the property increases. While this increase in value is reflected in an increased average price, this is not true capital growth, as additional investments had to be made. Also, with only about 100 properties being sold each year, the sale of a very few, very large houses would have a significant impact on the average price in that period.

If we break this down into individual years, we can see that average prices fluctuate, which again shows us the limitation of using averages as indicators of capital growth.

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The Secret Agent Report – Motherhood

We have just released our latest Secret Agent report! This month, we revisit the subject of health in the living environment, but with a particular focus on expectant mothers and newborns. As the harm from toxins and chemicals is amplified on our young, choosing a new family home must be carefully considered.

Start reading this report by clicking on the link below:

Register to receive our report monthly and access the Motherhood report now!

Motherhood Report


The Secret Agent Report – Melbourne Metro Rail Project

We have just released our latest Secret Agent report! This month, we are reviewing the Melbourne Metro Rail Project and investigate its potential effects on property prices.

Start reading this report by clicking on the link below:

Register to receive our report monthly and access the Melbourne Metro Rail Project Report now!

Melbourne Metro Rail Project Report

 


The Secret Agent Report – EOFY Review

We have just released a special mid-month Secret Agent report! In this release, we take an in-depth look at the property market over the last financial year.

Start reading this report by clicking on the link below:

Register to receive our report monthly and access the EOFY review now!

EOFY Review 2014/15