Property Pulse

Investors hoping to stay ahead of the trend this week would be well advised to include one bedroom properties in their shopping list.

According to the recently published “Australia on the Move” report by demographer and KPMG partner Bernard Salt, the traditional nuclear family (mum, dad and the kids) is declining in popularity. In 1991 families made up 41 per cent of households, now it’s just 33 per cent. By 2031, this figure is expected to plummet to just 24 per cent.

In addition single households are expected to outnumber families and couples by 2021.

These forecasts have serious implications for the property investor. Over the next decade or so, demand for smaller low maintenance properties will increase with the potential to rapidly outstrip supply.

Early indications show supply is already scarce. This coming weekend less than 4 per cent of properties advertised for auction in Melbourne provide single bedroom accommodation. Sydney looks a little better with a bit over 7 per cent.

In Brisbane the statistics are dramatic. Of the 178 advertised auctions in Brisbane this week only one property is a one bedroom apartment.

However, not all one bedroom apartments will be highly sought after. Beware of large developments dominated by one bedroom units. People living on their own will still want that feeling of being a part of a conventional neighbourhood surrounded by a community that offers different family groups.

Even if you’re a member of a nuclear family '” as I am '” when you’re investing you need to remember that many tenants will be in a different situation. They might be single, or part of a couple, or perhaps a single parent. So you need to focus on the kind of property tenants and (when you sell) prospective buyers you will be looking for, rather than the kind of property you like to live in.

AUCTION, AUCTION

With the Spring auction season just around the corner the increase in auction numbers is consistent across the east coast of Australia this week. Advertised auctions in Melbourne are up from 457 last week to 485 properties this week.

Sydney auction numbers rise slightly this week, from 213 to 223. In Brisbane there are 178 auctions this week, up from 157 last week.

OPPORTUNITIES

In Sydney this week, investors may find good buying opportunities in the upper and lower North Shore areas where supply levels reach a three month high with auction activity jumping from 7 to 20 and 30 to 44 respectively. There may also be good buying in the inner east, where auctions are up from 26 to 34.

In Brisbane, the northern suburbs look like providing the most opportunity. The number of auctions is almost three times higher than last week, up from 13 to 34.

MINEFIELDS

Be aware of increased competition in South Brisbane this week where auction numbers fall to a low of 15 down from 34 on the previous week, the lowest number for more than a month. A limited number of opportunities are set to trigger increased competition.

THE LAST WORD

If you’re looking to buy and hold for the long term, look for properties where demand is expected to increase in the future. This may mean looking at properties or locations that may not suit you, but may well suit your needs as an investor.