Master Class:

The Big Shift in the Australian Property MarketWith Sam SaggersFrom Richardson & Wrench Projects

and Investments

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their property portfolios

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Visit www.realestateinvestar.com.au for a free 21 day trial

Master class webinars• Designed to share knowledge

• Desire to provide extra value to our clients

• Great for both new and experienced investors

• Plenty of opportunity for Q&A

• We run these regularly throughout the year, and sometime involve our partners to provide additional insight and offers

Todays topics1. A national capital cities market overview

2. Why the future of Australian real estate is the “Dawn of Design”

3. What the five biggest trends will be for real estate in 2016 – and how you can take advantage of them

4. How to get in first for priority pre-releases

Plus a Live Q & A session following the Webinar

General advice disclaimer

Material contained in this presentation is an overview only and it should not be considered as a comprehensive statement on any matter nor relied upon as such. This presentation contains general information only and does not take into account your personal objectives, financial situation or needs and you should consider whether the information is appropriate to you before acting on it. Both superannuation and tax laws are complex and subject to change. Before acting on any information you should consider seeking advice from a financial adviser and your accountant before making any financial decision in relation to any matters discussed in this presentation.

Audience poll:

What type of property investor are you?

Audience poll:

When are you planning to invest next?

Into the Future

How will property change?

The future of real estate.

Sam Saggers

Managing partner R&W Projects and Investments

153 years old

Australia’s oldest real estate group – with 105 offices across Australia

What we do know about real estate!

• In general, if we choose a great location property tends to go well

• If a city is booming, generally all properties catch the wave

• People like renting close to transport, jobs and convenience

We also know if you stick to the cities you win

Why people like property

The 5 major disrupters to 2016• The Australian property market will cool not

crash from massive run away bull's

• The Federal election will slow buyers down until the winner is revealed

• Architecture and quality will define success in an oversupplied market

• Globalisation of real estate has just begun. You will see more investment and more supply – more than ever before.

• Yields are following under supply

$250,000,000

We also know…There are 4 forms of capital growth

1. Growth from the right dwelling

2. Growth from the suburb

3. Growth from the market, i.e. Sydney, Brisbane etc.

4. Over market value growth, comes from desirability. People pay more for what they can’t have.

1. Wrong dwelling, right suburb

2. Suburb growth is all about improvement & change

3. Market growth

4. Desirability drives prices beyond market value

R&W Starlight 2015 Andrew Cocks

Let’s start with the market

Counter Cycle Rising

Market

Brisbane

Expansion

Bottom of Market

Sydney

PerthMelbourne

Adelaide

Source: marketview

So what would $700,000 buy me?

Sydney – 1-bedroom unit in Gordon, Lower North Shore 16km to CBD

Melbourne – 2-bedroom unit in Toorak – 7km to CBD

Perth – 2-bedroom unit in East Perth 3km to CBD

Brisbane – 3-bedroom unit in Kangaroo Point – 2km from CBD

Location • You can change anything about property

but you can never change its location.

Audience poll:

Which City do you plan to invest in next?

Market driven by quality

How? What? Where?

Purpose

Investor buying on logic

Renter, renting on amenity, design and location

Demand for your property has to outweigh supply

Owner-occupier buying at auction

Investor reaps the rewards

The living experience for the occupant has to be the highest priority

Winners and losers

$125,000 increase in flat markets

Cracking the Rubik’s Cube of designSpending around $600,000

Assessing design1. Great fixtures and Fitting2. Parking and Storage3. Aspect or outdoor living4. Internal amenity and or walking distance to5. Daylight, light and ventilation 6. Space and Volume 7. Pedigree of builder, developer & architect.

Or fixtures and fittings like this

So a property that looks like this! Has space and has volume

Daylight and ventilation

Or has an aspect like this?

Or amenity like this?

Most apartments or homes fail to capture a heavy

market Dead pot plant in the corner and nothing entrance

Cashflow and rents

Fact- Losing rental demand- Rents compressing in favor of better property- Not attracting the best tenants - Not attracting the longest tenants- Suffering longer vacancies

CostRental compression and vacancy cost secondhand properties around a loss of 2 month vacancy and a 25% compression.

On a $400 property now renting for $300 = $8,400 per annum.

Fact - Winning low end demand- Rents compressing in favor of better property- Not attracting the best tenants - Not attracting the longest tenants- Suffering longer vacancies

Cost

Rental compression and vacancy cost first investment grade properties around a loss of 1 month vacancy and a 12.5% compression.

On a $400k property now renting for $350 = Loss = $3,800 per annum.

Fact - Renting fast - Rents expanding- Attracting the best tenants - Attracting long leases - Left over pool of tenancy

Cost- No vacancy- Rents risen past normal by up to $50 a week - Meaning $2,600 surplus a year

The supply chain – how to avoid issues across

Australia

R&W Starlight 2015 Andrew Cocks

$190,000 in9 months of ownership +14 months

off-the-plan

R&W Starlight 2015 Andrew Cocks

Do you have a property plan or a strategy?

R&W Starlight 2015 Andrew Cocks

Hope and pray investor• Does not understand the limitations of their situation• Buys at the top of the market• Pays too much• Makes emotional decisions• Hope and pray• Give up when the going gets tough and blames others

R&W Starlight 2015 Andrew Cocks

Informed investor• Clear plan and strategy• Knows the limitation of their resources and plans accordingly• Recycles their equity quickly• Knows where to invest based on facts and figures• Balances cash flow and equity growth

Register for a callback & your bundle pack valued at $875

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The town plan bundle

“If you want to be great at real estate. You have to learn the Town Plan. The town plan reveals where we should buy and how to buy within suburbs in every city. It’s the how, what, when, where and why of real estate”

• Two complimentary tickets to R&W and Tim Lawless next RP Data CoreLogic economic event in your city.

• Two complimentary books on property. Posted to your home.

• Two complimentary tickets to discover the town plan of Sydney, Melbourne, Brisbane or Perth - your choice (flights not included).

• Design a property well manual.• Data report on a capital city of your

choice.

The bundle

R&W Starlight 2015 Andrew Cocks

info.realestateinvestar.com.au/rw

Q&A

Register for your free investors bundle plus R&W consultant call

info.realestateinvestar.com.au/rw

Clint GreavesCEO Real Estate Investar

Sam SaggersManaging Partner R&W

Projects and Investments