News

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


Category Archives For: Property Buying Tips

Noise: A Summary

One of the effects of urbanisation is an increasing number of people choosing to live in the inner city, particularly in high density neighbourhoods. Re-zoning has allowed many residential areas to become mixed use zones whereby apartment high rises, houses and restaurant strips exist all on the same street. In Victoria, these zones are often centred around transport hubs, nearby either tram lines or train stations. All these elements make the hustle and bustle of the city, but one might argue it’s getting a little too noisy. External noise has become a modern day pollutant that is difficult to escape, and has captured our attention.

In our Healthy Environments report, we recommended buying property that is not located on a main road or nearby train stations to avoid high levels of external noise while at home. Noise can have detrimental health effects such as cardiovascular disease, even if you think you’ve become accustomed to the low grumblings of traffic and passing trains.

We recently discovered that, in addition to poor health outcomes, external noise can negatively impact the value of property. These are some of our findings.

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21st Century Pollution: Noise

As part of our upcoming report on Sound, we decided to look at one of the downsides of living in the inner suburbs of Melbourne. For some, the idea of living close to – or within – the city is extremely desirable, especially if you’re a young professional. But is it possible to be too close to the centre of all the action? We wanted to find out if inner city properties lost any value being located on noisy main roads.

For our purpose, we defined a noisy road as any street with two or more lanes, or a road with tram tracks on it, and narrowed our study to inner North suburbs. We made sure that the only variable was whether the house was located on a noisy or a quiet street, keeping other property traits as similar as possible.

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A Matter of Price and Size

Is a more expensive house also a larger house? Usually yes, but does a 10% bigger property also cost 10% more? The answer, interestingly enough, is that it depends on the area.

The size of a property and the price do not always move up or down proportionately, but by different amounts depending on the suburb.

Travancore, Northcote and, surprisingly, Hawthorn offer the best value for money in the inner suburbs, while Albert Park, Middle Park and, unsurprisingly, East Melbourne, landed on the other end of the value spectrum.

To figure out what is a good deal on a house in any suburb, look at the percentage that price is greater or smaller than the average price, then compare this to how much bigger or smaller the land area is over the average. Finally, consider additional factors, including build quality, location and surroundings.

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The Secret Agent Report – Sustainability

We have just released our latest Secret Agent report! To kick off 2016, we look at sustainability and its relationship to property. Whether you are purchasing an existing house or building from ground up, there are several ways you can make your new home more sustainable.

Start reading this report by clicking on the link below:

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

Sustainability Report


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 – 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

 


The Secret Agent Report – Healthy Environments

We have just released our latest Secret Agent report! This month, we take a look at the unseen hazards in our internal living environments, and suggest ways to look out for these in your next home.

Start reading this report by clicking on the link below:

Register to receive our report monthly and access the Healthy Environments Report now!

Healthy Environments Report

 


The Secret Agent Report – School Zones

We have just released our latest Secret Agent report! In this release, Secret Agent compared the performance of public schools with house prices in the surrounding region, to uncover the unseen price of education in the housing market.

Start reading this report by clicking on the link below:

Register to receive our report monthly and access the School Zones report now!

School Zones Report

 


The Secret Agent Report – Rent

Land monopoly is not only monopoly, but it is by far the greatest of monopolies; it is a perpetual monopoly, and it is the mother of all other forms of monopoly.”
– Winston Churchill 

In this latest report we look at the state of rents. This is a key issue for investors within the market. The changing cost of money has changed expectations around yield, while newly built supply has created greater choice for tenants. This is an important read for anyone looking to undertake an investment decision, or a potential home buyer looking to establish whether they should buy or rent.

We look forward to March’s report and getting the early indicators of 2015 to you in The Secret Agent Report. It’s one of the most interesting times in the property market in years.
 
Register to receive our report monthly and access this latest release – Sign up on our Thinking page.

The Rent Report

Excerpt:

At Secret Agent we speak a lot about buying property, what to look for and how much value a certain characteristic might add. In light of a fresh new year, The Secret Agent Report considers property from a rental perspective. With more investors in the buying sphere than ever before, there has been an influx of available rental properties in the market, especially in the inner city and CBD itself. This has been compounded by the growing number of new apartment completions from 2012 to 2014 and continuing into 2015.

As uncovered by Secret Agent’s last report, sale prices of apartments have remained stagnant in many inner city suburbs over the past year. This, coupled with record low interest rates make attractive conditions for buyers to strike. However, investor sentiment of late seems to reflect concern about rental yields.

The number of people choosing to rent has increased over the past few years. With property expensive to buy, many first home buyers are being forced to continue renting for longer periods than they would have in previous generations. People are relocating for work more than ever and may prefer the flexibility of renting. Furthermore, there is a continuous influx of foreign students coming to Melbourne to study each year, as well as increased immigration levels. There are plenty of people wanting to rent. The question is: can demand still keep up with newly built supply?

A few years ago there would be crowds lining up for an open for inspection, most people holding their applications in hand already prepared to submit on the spot. Competition was tough.

Now tenants have a lot more choice and with choice they can be more selective. Open houses are less frequently attended and applications come in days later.

There are of course exceptions for properties in well located areas, especially quality houses. The reduced competition seems to have put rental prices on hold. If owners choose to increase the rent, they risk having their property vacant for long periods. This has resulted in many tenants not experiencing a major increase in their weekly rent over the past 12 months.

This report will take an analytical look at the rental situation in Melbourne’s inner city suburbs. In particular we look at the annual growth in rents, the turnover of apartments leased out and annual rental yields within each inner city region. All one and two bedroom apartments were included in the calculation of median prices if their weekly or monthly rents were advertised. Fully furnished apartments for short term leases were excluded from the study. To adjust for seasonality in the rental market, the report focuses on sales in the fourth quarter (October, November and December) of 2012, 2013 and 2014. It should be noted that the results listed are gross yields due to the variable nature of outgoings for each property. To obtain a net figure, one can extract 20% from the median rents. Also stamp duty is not taken into account in this analysis.

Due to the large numbers of student accommodation apartments in suburbs such as Carlton, Brunswick East and Collingwood, the results may be skewed in these areas.