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Boom year ahead for property, says real estate analyst

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Boom year ahead for property, says real estate analyst2

IPSWICH can expect house price increases of up to 5% in the next year, according to a leading Australian real estate expert.

Dr Andrew Wilson, senior economist for Australian Property Monitors, was in Ipswich yesterday to talk to real estate agents and leaders in the industry about the prospects for the Ipswich property market.

Boom year ahead for property, says real estate analyst2

His prognosis was positive, based on several factors including Ipswich’s intrinsic affordability, its close proximity to Brisbane and its appeal to investors.

He said the growth in Ipswich would not be confined to select suburbs but would be across the board.

“Ipswich provides value, value, value,” he said.

“We now see the Toowoomba market with a median (house price) above Ipswich. The city of Ipswich has a median of $330,000 while it is $550,000 for the city of Brisbane.

Boom year ahead for property, says real estate analyst2

“Last year Ipswich saw prices go up around 5% and a lot of that energy was in the final quarter where prices went up by a tick under 3%.

“I think we will get between 3% and 5% growth again this year in Ipswich and we may even see higher growth.

“Ipswich doesn’t have a wide spread of high-value and low-value suburbs. It is value all the way through.”

Dr Wilson said the affordability advantage Ipswich had would drive value-orientated buyers and “particularly first home buyers with that $15,000 grant that the government gives for the new build”.

“This has been a big growth area and we are starting to see that new home-build accelerate again,” he said.

“This area has a new buzz about it. It is not the old Ipswich of 20 or 30 years ago. The new estates have come here and they have been attractive to young buyers and those looking for a semi-rural environment as well and still live within 30 minutes of Brisbane.

“Ipswich has plus 5% yields and the prospect of high capital growth from a low base and investors will pick up on that.

“The Ipswich market is ticking every box at the moment.”

Along with most other Brisbane regional markets, Dr Wilson said Ipswich had “certainly had tough times over the last couple of years for various reasons”.

“But we are starting to see that growth come back again,” he said.

“Sixty-year-low interest rates have really activated and intensified buyer activity and the advantage Ipswich has is that it is the most affordable region in the Brisbane environment.

“There are issues still with the local economy in terms of unemployment levels, but the Ipswich population grows by around 3% every year so it is always going to have trouble absorbing those growth levels in terms of employment.

“But there are plenty of upsides with the Queensland economy.”

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Investment Advice

Superannuation property fund ISPT invests in Brisbane malls

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Property

On behalf of its ISPT Retail Property Trust (IRAPT), ISPT is buy a 3741sq m property in Springfield and a 4889sq m neighbourhood centre in Ipswich.

Both were growing areas supported by strong residential catchments, said IRAPT fund manager Cameron Gregson.

“Obviously the quality of the anchor tenants in both centres also was a drawcard for IRAPT,” he said.

The Springfield property comprises of a 3200sq m supermarket leased to Woolworths on a 20-year lease, along with eight specialty retail outlets.

The Ipswich centre, located just 2km from the Ipswich CBD, has a 15-year lease commitment from Coles to open a 4200sq m supermarket in June 2017.

The two properties will be developed by Brisbane private property group Citimark, which has $1.5 billion of diversified development book focused on southeast Queensland.

“IRAPT’s decision to acquire both the Silkstone and Springfield retail centres is a huge show of confidence in these projects and the southwest corridor (of Brisbane),” said Citimark’s director of commercial and retail Jonathan King.

McNab Constructions has been appointed to build the Springfield centre, with completion expected in May 2017, while Hutchinson Builder will build the Ipswich Centre.

Sam Hatcher from JLL and Craig O’Donnell from CBRE managed the sale.

 

Originally Published On: http://www.theaustralian.com.au/

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Investment Advice

Low interest rates cuts negative gearing ATO investor claims in 2012-13

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Low interest rates cuts negative gearing ATO investor claims in 2012-13

Low interest rates cuts negative gearing ATO investor claims in 2012-13

Record low interest rates have shown up in new statistics from the Australian Taxation Office, in a sizable drop in negative gearing tax claims by property investors.

Claim for rental properties fell from around $13.8 billion to $12 billion between the 2011-12 and 2012-13 financial years.

The latest statistics for 2012-13 show that 1.26 million people deducted losses made on investments (including mortgage interest) from their overall income, from the 12.7 million lodged individual tax returns.

The overall cost of negatively-geared rental properties has fallen by $2.4 billion, or 31 per cent, in 2012-13, due to record low interest rates and higher rents.

The Tax Office’s latest statistics shows 1.9 million landlords.

The value of rent returned was up 8.6 per cent to $36 billion but the value of interest claimed was down 6.7 per cent to $22 billion.

While the number of landlords with negatively-geared properties increased by almost 60,000, their tax deductions fell 13 per cent.

​The highest number of property investors claiming tax deductions had a taxable income – after tax deductions – of between $37,000 to $80,000 a year.

By JONATHAN CHANCELLOR

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Investment Advice

How investor Nautilus nearly doubled money on property in 18 months

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How investor Nautilus nearly doubled money on property in 18 months
How investor Nautilus nearly doubled money on property in 18 months

Nautilus purchased this complex of 10 industrial buildings at 93 Burnside Road, Yatala, Brisbane, 18 months ago. Photo: Supplied

 

Nautilus Investments Corporation has made a 75 per cent gain on the value of an industrial property in less than 18 months after fully leasing half empty buildings and selling them off to Sydney-based fund manager Ringmer Pacific.

The Melbourne-based Nautilus purchased the complex of 10 industrial buildings at 93 Burnside Road Yatala, south of Brisbane from receivers in mid 2013 for $10 million.

It has now sold the asset for $17.45 million reflecting a yield of 8.94 per cent.

Savills’ Callum Stenson and Myles Clentsmith negotiated the deal following an expressions of interest campaign that attracted over 50 buyer enquiries and five offers to purchase.

“This was about being prepared to take on the risk profile,” Mr Stenson said. “When they first bought they were looking for something high return, high risk.”

“The complex was in disarray when Nautilus bought it. It had 57 per cent vacancy, there was outstanding infrastructure charges and no certificate of completion,” he said.

“At the time there was plenty of money but limited confidence – people were sitting on their hands, but those who stepped up have reaped the benefits.”

NEW TENANTS

Nautilus spent 18 months fixing the issues, securing new tenants and presenting the 14,500 square metres property back to the market fully leased.

A similar strategy is now being actively taken up by commercial real estate groups such as Lend Lease’s Australian Prime Property Fund.

That fund snapped up an empty ­Bunnings Warehouse in Brisbane in July last year for $21.27 million and Hills Limited’s headquarters for $15.6 million which is to be vacated next year.

Sydney-based fund manager Ringmer Pacific, which purchased the Nautilus asset, said the property has a prime location.

Ringmer Pacific’s Giles Austin said: “The 93 Burnside Road property provides extremely flexible accommodation for local businesses that will be able to adapt to changing tenant needs in this key growth corridor linking the Gold Coast and Brisbane.”

by Matthew Cranston

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