Promoted by National Property Group.
National Property Group, a leading organization in the real estate industry, is revolutionizing the way investors navigate the perplexing market scenario characterized by soaring land values and stagnant house prices.
In recent times, an alarming trend has emerged, where house prices either remain flat or experience a decline, while land values continue to rise. Don Harb, the Chief Data Officer at National Property Group, has conducted extensive research and uncovered intriguing patterns that defy the conventional market correlations. Land values are surging at a significantly higher rate compared to house values, presenting an interesting challenge for investors.
In Australia, unimproved land value refers to the assessment of land without any structures, whereas house value encompasses the value of the property with all its additional structures and improvements. The former is crucial in determining the annual land tax payable by property owners, primarily focusing on rental properties while exempting primary residences in most jurisdictions.
Harb’s analysis focused on several suburbs with a substantial proportion of rental properties. For instance, Blacktown, a suburb in the western part of Sydney, witnessed a 5% increase in median house prices over the past five years. However, the median unimproved capital value experienced a staggering 33% surge during the same period.
Typically, as the unimproved land value rises, so does the land tax and rates payable, ultimately diminishing the rental yield for property owners. This scenario poses a challenge for property investors striving to generate positive cash flow from their investments. Consequently, it could result in higher rental prices and a decrease in rental availability for consumers, as investors seek better yields elsewhere.
National Property Group aims to assist real estate agents in guiding investors through this evolving landscape by offering alternative investment options, such as leveraging our state-of-the-art multi-lot mapping technology for knockdown rebuild projects. Moreover, our comprehensive property data platform empowers agents with valuable insights into areas that hold potential for capital growth.
In addition, real estate agents should consider collaborating with landlords and developers when exploring investment opportunities. Rob Flux, an expert from the Property Developer Network boasting an extensive network of potential and aspiring developers, emphasizes the importance of agents who comprehend the potential options. Flux categorizes these opportunities into three distinct categories: “Done with you” for passive investors, “Done for you” for semi-passive investors, and “Done by you” for active investors.
Establishing fruitful relationships with investors and developers is undoubtedly a long-term endeavor. By leveraging the power of National Property Group’s cutting-edge data platform, real estate agents and developers gain access to advanced tools that aid in assessing a property’s suitability for development. This invaluable insight enables agents to maximize their clients’ returns while skillfully navigating the dynamic changes in the market.