Latest news with #PropertyInvestorsCouncilofAustralia
News.com.au
05-05-2025
- Business
- News.com.au
Most common property investment myths busted
Whether you are just starting out as an investor or you are unsure where to begin, it's helpful to do as much research as possible – especially when there are a whole host of myths floating around. Here are some of the most common misconceptions about property investing and the reasons they aren't true. MYTH 1: PROPERTY PRICES ALWAYS GO UP Prices don't always go up, says Property Investors Council of Australia chair and co-host of the Property Couch podcast Ben Kingsley. Instead, they tend to go up and down in cycles, driven by the economic activity related to that particular market – namely job opportunities – which drives demand for housing. 'An example of that would be a place like Broken Hill,' he says. 'Their property prices peaked many, many decades ago, right in the middle of their mining boom.' MYTH 2: IT'S BETTER TO BUY NEW VS EXISTING While a brand new house might be appealing in terms of liveability, it doesn't make for a better investment decision, Kingsley says. 'Promoters and property spruikers will get you connected to the freshness, the emotional, seduced nature of a fresh, new property,' he says. 'The reality is, it's the land that appreciates, it's not the improvements, ie., the dwelling.' 'You're looking for that land to asset ratio where the percentage of the value is more locked up in the land than it is in the improvement in the land.' That doesn't necessarily mean a larger land size, he says, explaining that location of the land is also important. MYTH 3: OFF MARKET EQUALS OPPORTUNITY A lot of buyers see off market properties as being good opportunities since there is usually less competition from other buyers, however, they don't always equate to being good deals, says The Investors Agency CEO Darren Venter. He says it's important to be careful when doing due diligence and to look for things that may detract from the value of the property, such as electrical transmission lines, proximity to council housing and whether it's located in a flood zone. 'In a lot of instances, off market properties can hold these traits, where the sellers agents know that an off market title has a bigger attraction to property buyers,' he says. 'So people pretty much let go of a lot of criteria and due diligence looking because they've heard that it's off market.' MYTH 4: ALL PROPERTY TYPES HAVE THE SAME GROWTH There are several factors that determine price growth, but if you understand the principle that it's the land where the property is located that goes up in value over time and the dwelling itself that depreciates, 'the reality is that the different types of properties that you pick potentially run the risk of not performing as well as other well-located properties,' Kingsley says. The amount of value you have in the land content can be affected by current and future supply as well as scarcity – which is why purchasing units in a medium to high density setting may be a risky move. 'Apartments saturate themselves very, very quickly and easily,' Venter says. 'I would stay far away from apartments and units. The value is always going to be in the land because the land is where the demand is grown from the transactions that happen inside the area where the properties are being purchased.' He says demand for apartments is generally far lower than housing demand across the country. 'The vacancy rate for housing sits at around 1.1 per cent. The vacancy rate for units sits at around 2.5 per cent,' he says. 'When there's less demand, there's essentially less competition, which drives price.' FACT VS FICTION Property Investors Council of Australia Chair Ben Kingsley suggests keeping these three simple principles in mind when researching property investing in order to help you sort out fact from fiction and keep any spruikers at bay: 1. Supply is the enemy of capital growth 2. Economic activity is essential to drive demand for population and thus housing
Daily Telegraph
27-04-2025
- Business
- Daily Telegraph
Exposed: suburbs with highest tenant damage, rent loss claims
They're the suburbs around the country where owning an investment property has become riskier because of extreme weather events, more tenants defaulting on rent and malicious property damage. Exclusive insurance claims data from Allianz has revealed the capital city suburbs that had the most landlord insurance claims over recent months, pointing to a growing problem for landlords. The study, which examined claims across NSW, Victoria, Queensland and South Australia, indicated some of the areas with the highest rental returns and most accessible prices also attracted more frequent claims. Tenants in these areas were reported to be more likely to skip on rental payments or inflict property damage, while some areas were often frequently in the line of natural disasters. MORE: Aussie landlord's horror after 12 homes stolen Nathan Birch, director of property management firm Blink, said the reward for buying homes in many of these riskier areas was better capital growth. 'They tend to outperform the market,' he said. 'You may pay more in repairs but the owner can make more when they sell. It's not a (clear cut) thing.' The Allianz data showed the most common landlord insurance claims in each state were for storm damage, burst pipes, malicious damage and lost rent. But there was also great variance in the types of landlord claims made across areas, with each state seeing unique trends emerge in the types of areas where claims were higher: VICTORIA See the Victoria suburbs with the most claims Victorian landlords were making vast numbers of insurance claims across some of Melbourne's most investor-heavy suburbs, with increased rental protections being blamed. Allianz data showed more landlords were looking to recover financial hits on their homes in affordable areas like Hoppers Crossing and Frankston. With the insurer revealing unpaid rent was among the top reasons for claims, industry experts have warned it's adding fuel to the state's property investor exodus. MORE: John Howard's hidden homes shame Separate data from Ray White showed landlords were selling up at a significant rate in many of the suburbs. Property Investors Council of Australia director Ben Kingsley said most of the places with high claims were outer or regional areas known for relative affordability, meaning in many instances tenants were in more fraught financial situations — making claims for lost rent more likely. However, with Victorian investors also now facing an increasingly difficult task to move tenants on if they stopped paying their rent, Mr Kingsley said many landlords were selling instead. 'Government (is) choking the private rental investor out of this market,' he said. NEW SOUTH WALES See the NSW suburbs with the most claims Cheaper Western Sydney and regional NSW suburbs have become some of the riskiest areas to be a landlord despite being increasingly popular with property investors due to the higher rental returns. The data from insurer Allianz laid bare the more challenging markets to be a landlord at a time when still elevated interest rates have been encouraging many landlords to exit the rental market. Suburbs with the most landlord insurance claims tended to be in gentrifying lower socio-economic areas. There were also a mix of new development hotspots with higher claims and where rents were relatively high. insurance expert Tim Bennett said landlord claims tended to be larger for older homes, which often had 'hidden risks'. Areas where renter turnover tended to be higher also attracted more claims as moving tenants created more wear and tear, Mr Bennett said. 'Socio-economic factors can play a role,' he said. 'Places experiencing economic stress may see more incidents of missed rent repayments or tenant-related damage.' SOUTH AUSTRALIA See the SA suburbs with the highest claims Many of South Australia's riskiest markets for landlords were areas regularly featured in property investment hotspot lists, suggesting hidden traps for investors. Four of the five SA suburbs flagged by Allianz as attracting the most landlord insurance claims were located in Adelaide's northeast. It's a market where investors have been chasing positive cashflow over recent years, with new landlords often attracted to low median purchase prices and higher rental returns. Tenant-related claims were the most common in parts of Adelaide, according to Wayne Johnson, EBM Property Insurance state manager SA. 'The main areas of concern in those places is rent default,' Mr Johnson said. 'Then there's tenant damage and then there's legal liability, where the tenant hurts themselves, or worse.' Mr Johnson said that areas such as Elizabeth had suffered socio-economic decline over the years since major employers such as Holden scaled back operations or closed down. QUEENSLAND See the Queensland suburbs with the most claims Cyclone claims rated in the top five most common claims for Queensland, according to Allianz. But Brisbane claims were often for lost rent and suburbs with more affordable home prices tending to attract more claims. Bold Property Management director, Alison Farrell said from her experience in the Brisbane market, at least 80 per cent of landlord insurance claims were for rent arrears with a value between $2000 and $5000. 'We see more claims in low-to-mid-range rentals in outer suburbs,' she said. 'Higher income tenants will not rent in lower socio-economic areas generally, so landlords can only select from applicants that actually apply. The pool is what the pool is.' Ray White Collective principal Haesley Cush said claims for houses tended to be higher than for units. 'Since 2011 we've also faced a number of weather events that have contributed to the number of landlord insurance claims,' he said.
News.com.au
26-04-2025
- Business
- News.com.au
Exposed: suburbs with highest tenant damage, rent loss claims
They're the suburbs around the country where owning an investment property has become riskier because of extreme weather events, more tenants defaulting on rent and malicious property damage. Exclusive insurance claims data from Allianz has revealed the capital city suburbs that had the most landlord insurance claims over recent months, pointing to a growing problem for landlords. The study, which examined claims across NSW, Victoria, Queensland and South Australia, indicated some of the areas with the highest rental returns and most accessible prices also attracted more frequent claims. Tenants in these areas were reported to be more likely to skip on rental payments or inflict property damage, while some areas were often frequently in the line of natural disasters. Nathan Birch, director of property management firm Blink, said the reward for buying homes in many of these riskier areas was better capital growth. 'They tend to outperform the market,' he said. 'You may pay more in repairs but the owner can make more when they sell. It's not a (clear cut) thing.' The Allianz data showed the most common landlord insurance claims in each state were for storm damage, burst pipes, malicious damage and lost rent. But there was also great variance in the types of landlord claims made across areas, with each state seeing unique trends emerge in the types of areas where claims were higher: VICTORIA See the Victoria suburbs with the most claims Victorian landlords were making vast numbers of insurance claims across some of Melbourne's most investor-heavy suburbs, with increased rental protections being blamed. Allianz data showed more landlords were looking to recover financial hits on their homes in affordable areas like Hoppers Crossing and Frankston. With the insurer revealing unpaid rent was among the top reasons for claims, industry experts have warned it's adding fuel to the state's property investor exodus. Separate data from Ray White showed landlords were selling up at a significant rate in many of the suburbs. Property Investors Council of Australia director Ben Kingsley said most of the places with high claims were outer or regional areas known for relative affordability, meaning in many instances tenants were in more fraught financial situations — making claims for lost rent more likely. However, with Victorian investors also now facing an increasingly difficult task to move tenants on if they stopped paying their rent, Mr Kingsley said many landlords were selling instead. 'Government (is) choking the private rental investor out of this market,' he said. NEW SOUTH WALES See the NSW suburbs with the most claims Cheaper Western Sydney and regional NSW suburbs have become some of the riskiest areas to be a landlord despite being increasingly popular with property investors due to the higher rental returns. The data from insurer Allianz laid bare the more challenging markets to be a landlord at a time when still elevated interest rates have been encouraging many landlords to exit the rental market. Suburbs with the most landlord insurance claims tended to be in gentrifying lower socio-economic areas. There were also a mix of new development hotspots with higher claims and where rents were relatively high. insurance expert Tim Bennett said landlord claims tended to be larger for older homes, which often had 'hidden risks'. Areas where renter turnover tended to be higher also attracted more claims as moving tenants created more wear and tear, Mr Bennett said. 'Socio-economic factors can play a role,' he said. 'Places experiencing economic stress may see more incidents of missed rent repayments or tenant-related damage.' SOUTH AUSTRALIA Many of South Australia's riskiest markets for landlords were areas regularly featured in property investment hotspot lists, suggesting hidden traps for investors. Four of the five SA suburbs flagged by Allianz as attracting the most landlord insurance claims were located in Adelaide's northeast. It's a market where investors have been chasing positive cashflow over recent years, with new landlords often attracted to low median purchase prices and higher rental returns. Tenant-related claims were the most common in parts of Adelaide, according to Wayne Johnson, EBM Property Insurance state manager SA. 'The main areas of concern in those places is rent default,' Mr Johnson said. 'Then there's tenant damage and then there's legal liability, where the tenant hurts themselves, or worse.' Mr Johnson said that areas such as Elizabeth had suffered socio-economic decline over the years since major employers such as Holden scaled back operations or closed down. QUEENSLAND Cyclone claims rated in the top five most common claims for Queensland, according to Allianz. But Brisbane claims were often for lost rent and suburbs with more affordable home prices tending to attract more claims. Bold Property Management director, Alison Farrell said from her experience in the Brisbane market, at least 80 per cent of landlord insurance claims were for rent arrears with a value between $2000 and $5000. 'We see more claims in low-to-mid-range rentals in outer suburbs,' she said. 'Higher income tenants will not rent in lower socio-economic areas generally, so landlords can only select from applicants that actually apply. The pool is what the pool is.' Ray White Collective principal Haesley Cush said claims for houses tended to be higher than for units. 'Since 2011 we've also faced a number of weather events that have contributed to the number of landlord insurance claims,' he said.
News.com.au
26-04-2025
- Business
- News.com.au
Where Melbourne landlords are making the more insurance claims, and choosing to sell up
Victorian landlords are making vast numbers of insurance claims across some of the city's most investor-heavy suburbs, with increased rental protections being blamed. Allianz data shows more landlords are looking to recover financial hits on their homes in affordable areas from Hoppers Crossing and Werribee to Cranbourne and Frankston. With the insurer revealing unpaid rent was among the top reasons for claims, industry experts have warned it's adding fuel to the state's property investor exodus, and that they are now worried landlords could soon be hit with higher insurance premiums — or the risk that underwriters could stop backing them for broke tenants. Separate data from Ray White shows landlords are selling up at a significant rate in many of the suburbs, with investors the seller for 43 per cent of auctions they held in Melton South in the past year. In 2024 that figure was 31 per cent. More than a third of sales in Melton and Craigieburn were also investors in the past 12 months, with both areas also recording an increase from a year prior. Property Investors Council of Australia director Ben Kingsley said most of the areas with high claims were outer or regional areas known for relative affordability, meaning in many instances tenants were in more fraught financial situations — making claims for lost rent more likely. However, with Victorian investors also facing an increasingly difficult task to move tenants on if they stopped paying their rent, Mr Kingsley said many had been choosing to sell up instead — marking an unintended consequence of government policies intended to protect renters. 'I think it's another piece of evidence that the government are choking the private rental investor out of this market,' he said. 'And, as more claims come in as a result of not being able to remove difficult tenants, that will increase landlord insurance policy costs (higher premiums) — which will be passed on to the tenants.' Mr Kingsley added that there were also risks of insurance premiums rising as a result of growing numbers of claims, while particularly problematic areas might also run into issues getting landlord insurance coverage at all. 'We have already seen this with climate risk,' Mr Kingsley said. Real Estate Institute of Victoria chief executive Kelly Ryan said it wouldn't surprise her if landlords were claiming on insurance for lost rent. 'There's a misconception around investment property owners being wealthy, they are not,' Ms Ryan said. 'If someone doesn't pay rent, it puts them under huge financial stress. 'And it is incredibly onerous, and almost impossible to have someone evicted for not paying rent.' Consumer Affairs Victoria advice to landlords stipulates a tenant cannot be given notice to vacate until rent is at least 14 days late, and a further 14 days notice must be given to the tenant. However, if the tenant chooses not to vacate an application must be made to the Victorian Civil and Administrative Tribunal, who if they agree, will provide a warrant for eviction to the police to execute. Mr Kingsley noted that most landlord insurance policies had a six-week minimum for missed rent, which was likely to be triggered more frequently under the state's current situation. Allianz Australia's Matt Anderson said most claims in Victoria related to burst pipes, malicious damage and rent. The most common claims were for less than $2000, with those in the range of $2000-$5000 the next most frequent. Mr Anderson noted that while most claims would only require regular and thorough inspections to progress, issues with rental losses could need documented history of a tenant's payments in a rental ledger to ensure things proceeded expeditiously. Finder insurance expert Tim Bennett said landlords wanting to avoid having claims rejected needed to ensure they had met all their obligations around maintenance and alerting their insurer to changes that might impact its risks. Where landlords make the most insurance claims, and sell Top 10 areas Allianz landlords are making claims, and what share of Ray White's auctions investors account for in these areas. 1. Hoppers Crossing — 13% 2. Werribee — 13% 3. Craigieburn — 37% 4. Cranbourne — (no auction data) 5. Melton — 34% 6. Narre Warren — (no auction data) 7. Melton South — 43% 8. Wyndham Vale — 16% 9. Berwick — 5% 10. Frankston — 17% Source: Allianz, Ray White Mr Bennett said insurance premiums could vary from location to location, so it was worth investors assessing this prior to purchasing. In the Frankston area, FosterFroling Real Estate boss Adrian Foster said his agency's rent roll had gone from 1500 homes down to 900 as landlords sold up, with many frustrated that it was now 'ridiculously hard to get a tenant to VCAT for not paying their rent'. 'Every day, I get a landlord who says they are sick of not making money and they want to sell,' Mr Foster said. 'And I would say Victoria probably has the highest number of claims for insurance, because it's so hard to get money back off tenants. 'I think this will end up in tragedy for the state.' The agent estimated that as many as one in five investors in his area did not have landlord insurance.
