A recent survey from the Bureau of Statistics and RP Data confirms my predictions for market activity in 2010. Upgraders will remain the largest buyer group, along with an increase in investor and downsizer activity.

The ABS Housing Mobility survey shows a massive 45% of Australian home owners feel their homes are too small. The survey was conducted when interest rates were twice today’s levels and upgrading was not financially viable for many home owners, but with interest rates now significantly lower it’s no wonder upgraders are active right now.

So what do these buyers want? In addition to a bigger property, they also want a better quality property that is close to shops, cafes and transport and in a quieter location with better security.

In previous posts, I’ve discussed the reasons why more investors will be in the marketplace next year. If you’re going to be one of them, you better take note of these valuable insights into what tenants want. The survey revealed the main reasons tenants are unhappy with their current homes: poor condition, lack of security, noise levels, traffic levels and not being close enough to shops and transport. In addition, 25% complained their property was too cold.

Based on this, I suggest investors consider the following when looking to buy in 2010:

• Good condition – if you buy an older style or run down house or apartment put some money into kitchen and bathroom renovations. You don’t have to do anything too flash, just ensure these rooms are modern, neat and tidy with lots of storage space. Once you have a tenant, keep the property in good working order.
• Good security – put a deadlock and chain on the front door and key locks on the windows.
• Quiet street close to shops, cafes, transport – avoid properties on main roads, they’re definitely convenient but noise and traffic are major issues for tenants. Look at leafy residential streets within a 10 minute level walk of shops, cafes and transport .
• North aspect – a perennial desire in real estate but not the be-all-and-end-all. Light and bright internal living spaces, balconies and backyards are the goal. A dark property is seriously depressing and they’re iceboxes in winter. Don’t go there – look for light! 
• For maximum capital gains, try to buy within 15km of your state’s capital city

As this is my first post for 2010, I’ll take this opportunity to wish you and your family a happy, safe and prosperous New Year.