Premium Finance Services

Many clients of Premium Finance Services use well structured debt to safely create wealth from the residential housing market. Statistics are shedding new light on the best types of property to use; traditionally investors have preferred house & land to townhouses or units but recent research shows that units and town house capital growth is keeping pace traditional house and land.

September 2009 saw stronger-than-expected gain in building approvals driven by a 14.6% rise in apartment approvals. Private sector houses rose by 0.3% in the month. Apartment approvals are notoriously volatile and have can large impact on the aggregated data, so it’s worth looking at the trend data to gauge the strength of the upswing.

Trend building approvals were up by 2.0% in September and have been showing monthly gains of at least 2% since March, although the strength of the upswing seems to be slowing with trend monthly growth easing from 3.1% in April.

The housing finance data shows that first home buyers have been a key driver of the pickup in building approvals in the first half of this year and the phasing down of the grant is probably responsible for some of the easing in recent months. Of course lack of finance availability for small developers, the well-publicised bottlenecks around the local government approval process and developer infrastructure charges have provided some headwinds to the broader upswing as well.

At Premium Finance Services we have always focussed on population growth and level of construction to identify, from a financial perspective, the lowest risk markets for residential property investment.

With strong population growth continuing to outstrip the pace of housing construction residential property is considered the most appropriate and lowest risk investment for wealth creation. The shortage in housing is placing upward pressure on rents and the CPI which all bodes well for property investors. The ABS reported that rents rose by a solid 1.2% in Q3 2009, although it appears that rental price pressures are slowly easing, with quarterly growth easing from a peak of 2.2% in Q208. This is probably due to some renters becoming first home buyers, but it could also be due to an increase in the household size.

Current market trends and recent ABS statistics still point to South East Queensland being the best (highest growth, and lowest risk) investment market over the next 15 – 20 years. With the correct finance structure from Premium Finance Services many new clients are finding they can halve the cost of owning a new investment property meaning their wealth creation plans are back on track after the disastrous performance of most superannuation funds.

Tags: Brisbane, Melbourne, Premium Finance, Premiume Finance Services

This entry was posted on Monday, November 16th, 2009 at 6:27 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.