Follow Sally’s journey across Australia as she looks at valuation topics and local market activity in our capital cities.
TODAY’S TOPIC: Common risk factors to consider before purchasing a property.
It would be handy to have a crystal ball to consult before purchasing a property. Often decisions can be clouded by emotions, timing and lack of understanding. It’s important to take a step back and understand the risk factors that affect property value now and in the future.
Property value – what are the risk factors to consider before purchase?
We’d all love to believe that property goes up in value. But the reality is; past growth doesn’t always equate to future growth.
Here are 5 important factors to consider when making a risk averse property purchase decision:
- MARKET RISKS
- Interest rate rises
- Economic slowdown
- Increase in development of comparable property within close proximity leading to supply increases
- The likelihood of a fall in demand for comparable properties
- OCCUPANCY/CASH FLOW RISKS (if investment property purchase)
- Existing tenant/s vacates
- Reduction in achievable rents
- LAND/TITLE RISKS
- Onerous Easements/Encroachments
- Restrictive Easements/Covenants
- Development Restrictions (Local authority planning/building approval)
- Contained within floodway’s etc.
- Zoning Issues
- LOCATION RISKS
- Factors which negatively impact on the desirability of a locality (eg. close proximity to railway lines, airports/flight paths, industrial properties, correctional facilities, high voltage transmission lines, mobile phone tower & excessive noise)
- Environmental hazards
- Onerous heritage affectation or preservation orders
- Landslip or mines subsidence
- Main road acquisition
- IMPROVEMENTS RISKS
- Hidden faults/ Building defects
- Unapproved extensions
- Higher than anticipated cost of repairs
- Deterioration in condition of improvements
- Pest infestation
- Restrictions on access to the property
There are a wide range of factors that can have a negative impact on a property’s market value, including both insurable and uninsurable risks. This is just a small sample of considerations, please contact us if you would like to learn more about our property valuation and advisory services.
Local Property Market Update: Queensland
Today we are in Queensland, let’s look at the local property market in the Brisbane metropolitan area.
OVERVIEW: June 2015 Quarter
Statistics obtained indicate a slight increase in the median house price for the last quarter while the median unit price remains stable. There appears to be a declining volume of sales over the last quarter as uncertainty sets in with job stability being a major issue in Queensland. The limited stock levels is resulting in some minor increases in sale prices in some sectors of the market.
SUMMARY: Metro Residential Sales
Brisbane’s median House price for the June 2015 quarter was recorded at $605,000 with the Unit price being $428,000. As can be seen there has been very little market movement over the past 12 months.
|Time Period||Median House Price||No. of House Sales|
|Jun 2015 Qtr||$605,000||2,609|
|Mar 2015 Qtr||$592,000||4,103|
|Dec 2014 Qtr||$612,000||4,311|
|Sep 2014 Qtr||$590,000||4,263|
|Time Period||Median Unit Price||No. of Unit Sales|
|Jun 2015 Qtr||$428,000||1,651|
|Mar 2015 Qtr||$430,000||2,484|
|Dec 2014 Qtr||$430,000||2,589|
|Sep 2014 Qtr||$432,000||3,080|
If you would like to find out more about our property advisory and valuation services in Queensland, please contact our local team.