This year’s financial reporting season has been interesting for companies who are in the property industry, with businesses such as property development experts Mirvac making better than expected profits from residential property sales. Indeed, Mirvac’s Chief Executive Susan Lloyd-Hurwitz suggested that the financial year 2013-14 had been one of their most successful on record, with the company’s full year profit going up 220% to $447 million dollars. The main driver of their success was the continuing high demand for inner city apartments, with demand expected to continue well into 2015 and beyond. This should be good news for anyone looking at property investment opportunities in the near future.
While property companies such as Mirvac are very much aware of the predictions of increased residential property development especially in Melbourne and Sydney, they do not believe that this will substantially reduce sales prices of new apartments because it will do little to address the existing undersupply of housing. Higher demand from international buyers considering a property investment in apartments in the inner suburbs of the major capital cities will also help to boost sales prices an capital returns over the long term. Other factors helping to boost an already buoyant property sector include a strengthening economy, especially in NSW, and a tight rental market.
But property developers are not the only ones benefiting from the current market conditions. Mortgage brokers and lenders are also reporting better than expected results. Mortgage Choice, for example, recorded what they described as their best result ever, with their full year profit rising 6% to almost $20 million dollars and a fully-franked dividend of 8 cents a share.
The positive environment for the property sector and developers in particular can be seen most in the capital cities, and especially in inner city Melbourne, where it is predicted that almost 17,000 new apartments are planned for construction, with around 5000 under consideration for development approval. RP Data analyst Robert Larocca suggests that while it is unclear just how many apartment developments will actually be completed in the next few years there is very little evidence that the number of apartments will have a negative impact on property prices in general, especially considering the increasing wave of international property investment coming into the local market.
More than ever it is important to have a practical long term strategic plan if you are considering property investment or want to add more properties to your portfolio. Getting expert assistance with all aspects of researching and purchasing off the plan apartments can give you the head start you need to put you ahead of the competition. A professional team such as the experts at Ironfish can give you inside research, knowledge and skills as well as access to the pre-negotiated opportunities that others may miss out on.