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5 INCREASING RENTS
TAFE property and investment coordinator Peter
Koulizos doesn’t worry so much about the vacancy
rate. However, he does see small cash signs when
the actual rent for an area starts rising.
“Rising rent is a good indicator because there
you’ve got people who want to live in the area and
are willing to pay a bit extra each time,” he says.
“Generally people who rent can’t afford to buy so it’s appealing
to people who are willing to pay extra for a property.”
Not surprisingly, SQM Research says Sydney was the
outperformer of the capital cities over the past year, with a 2.3
per cent increase in asking rents for houses and a 3.6 per cent
increase in asking rents for units.
Hegney adds rents increase for two reasons – they follow
values up or there’s just not enough properties available.
6 INCREASING WAGES
Koulizos says people who can pay higher rent are
usually people who have increasing incomes.
“Increasing incomes and wages is one thing I
look for on the ABS (Australian Bureau of Statistics)
website,” Koulizos says.
“It’s a very good indicator as to whether a suburb
is becoming a hotspot.”
The best way to tell if wages are increasing faster than normal
is by comparing them to the rest of the state and country.
“If wages in the state increase by 10 per cent, I’m looking for
suburbs that have had wage increases more than that,” he says.
The last Census was in 2011 and the one before was 2006.
By 2015, this data could well seem a little old, but Koulizos
points out it will still usually provide a trend.
“If I go back to 2001 and have 10 years’ worth of data, that
gives me a really good indicator about the trend,” he says.
The easiest way to find this exact information is to go to the
ABS website, click on ‘Census Data’ then type the suburb name
in ‘QuickStats search’. Under ‘families’ you can scroll down to
find ‘weekly incomes’.
Going off Koulizos’ suggestion and searching for Marrickville
reveals the median weekly income for couples with children in
the last Census was $2603 and for those without children it was
$2386. This compares with $2310 for couples with children in
NSW and $2081 for couples without children, again indicating
couples in Marrickville earn more than the average NSW couple.
Lomas says supply and demand also plays a part when it
comes to wages.
“When those who have settled in an area begin to earn more
they begin to look to upgrade,” Lomas explains.
“If this is coupled with an insufficient supply, pressure is placed
on available housing and prices rise.”
Koulizos adds visiting the suburb will also give small but
For example, are there shops with well-dressed people or is the
area full of graffiti? Are the front gardens nice and neat or are
they strewn with rubbish?
Another indication of rising wages is the type of cars
“Small BMWs and Audis are an indicator of an upwardly mobile
demographic,” Koulizos says.
“Suburbs that have big, black BMWs, Lexus and Audis are
already expensive suburbs. But the smaller Audis are from an
aspiring class and might be in areas of Sydney like Alexandria
Koulizos adds a walk down the main street should reveal
if there are shops with ‘for lease’ signs or if there are
“Are there mainly $2 and bargain shops? Is it a Vietnamese
bakery with white sliced bread for $1 or a Michel’s Patisserie
that sells cheesecake for $6.95 a slice?” he says.
“Is the newsagency selling the Financial Review newspaper
and Australian Property Investor magazine or are they selling
New Idea? Also look at the pub – is it full of blokes and big
screen TVs with racing and footy, or is there a jazz band in the
courtyard and a range of boutique beers?”
7 RISING CONFIDENCE
Confidence might not come with statistics or data
but it can add pressure on a suburb. You can pick
up the vibe if cafés are packed and if newspapers
are full of positive property-related stories.
“If people are feeling happy it almost doesn’t
matter what’s happening, they’re going to buy,”
But what about a loan? It’s all good and well to feel happy and
want to buy but if you can’t borrow, forget it. As confidence
rises, the economic mode can shift and banks are willing to
Koulizos says the ability to borrow money is what facilitates
“It doesn’t matter if interest rates are five per cent, if the banks
are tight with who they lend to or make you increase your
æIf you see an increase in sales activity, and I mean a
strong one, the next thing that follows in a three to
six-month window is a price increase.Æ Gavin Hegney
Wages have increased in Marrickville, Sydney.
BOOM SECRETS \\ COVER STORY
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