When Is A Property HotSpot Luke Warm

I read an article today naming Cremorne on Sydney’s north shore as this week’s HOTSPOT and if you look at recent figures you have to agree:

  • Median 12 month growth:10.46%
  • Median 3 year growth: 15.74%
  • Median 5 year growth: 32.74%

However the 10 year average growth is only 4.07% and if you take the average inflation rate since 2004 is around 2.75% then the real return is only 1.32%.  You can then add the rental yield which is claimed at 4.09% gross, so net will be around 3.50% so actual return over 10 years is 4.82%, not much different to what you would have made on cash….. I read elsewhere some advice that the old adage that “time in the market” is not as valid as many believe and that “timing the market” over a short term 3 year  predictable forecast is much more important and likely to result in better returns.  On that basis it may be that Cremorne should have been on the radar 3 years ago rather than today.