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We all know of the huge economic and social impact the baby boomers generation have had on modern day society. It has underpinned and driven many industries… from baby food in the 1950′s to cars, houses and employment in the 70′s and cosmetic surgery and the health industry today.

While this rise of a concentrated population group will continue to make its presence felt; it is really quite “irrelevant and insignificant” when compared with the impact the resources boom is about to unleash on us.

The demand from China now and India in the not too distant future simply cannot be ignored. A simple look at the population of the world’s three most populous nations tells a story in itself.

1. People’s Republic of China 1,323,902,000
2. India 1,133,037,000
3. United States of America 304,117,000
4. By comparison to China and India, the USA looks tiny
5. In fact, if you add together the populations of USA, Russia, Japan, Germany, France, UK and Italy, you get to just over half the Chinese population
6. If you added Australia’s entire population to that of China, the Chinese population would move from 1.3 billion to err… 1.3 billion
7. China alone represents 20% of the world’s population; I think you get the point
8. China + India + Urbanisation x 2.5 billion people = 1 Great Big Resources Boom

… and in my opinion. Queensland and Western Australia will reap the long term huge flow on from this resource boom. While their property cycles tend to alternate, Western Australia has just come to the end of a property boom and Queensland is on the next up cycle… I believe both these states will significantly out perform the others over the longer term.

Happy Investing,

Nick Lockhart

The Business section of todays GC Bulletin comments on the development in Robina and in particular the $110 million “Rocket” 16 story commercial building with its associated retail space. Along side the Rocket will be the residential complex of The Wharf, now over 90% sold.

The suburb of Robina is reported to have a population of over 30,000 with an average income above the average of the Gold Coast. 43,000 Gold Coasters, representing an annual spend of $750 million, live within a 5 minute drive, with 157,000 people within 10 minutes.

The CG Bulletin today comments that the 2005 plan for SE Queensland needs to be revised urgently. It allowed for growth of 250,000 people to 2025 and that now looks like it will be 600,000 taking the area to 4.3 million!

The Minister for Infrastructure and Planning , Paul Lucas, said “The key top SE Queensland future is making better use of our urban areas, including higher densities ” (units and townhouses etc)

An astute investor tends to buy investment properties in those areas that offer higher consistent Capital Growth (and by default, a lesser rental return).

These properties are usually negatively geared, leaving a cashflow shortfall between rental income and outgoings; covered by tax savings and owner contributions.

Contributions from investment property owners are often the subject of misunderstanding by those less informed investors.

I believe building an investment property portfolio ought to be viewed much the same way as one would building a business; with a defined strategy to manage overheads and any cashflow shortfall.

Let’s look at 3 ways to attack this shortfall, so as to allow you to not lose sight of the main goal – Capital Growth!

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When researching an area in which to invest, the fundamentals that support its long term capacity to grow; and by grow I mean double in value every 7 – 10 years at least, is vital when making a well informed low risk investment decision.

Population growth is one of those factors that underlie and sustain an area’s price growth potential. Supply and demand will always be the major determining factor for price movement. So what we want to see is a place people want to live and are moving in droves creating a problem for councils and governments! New planning needs to take place, infrastructure spending is required and managing the growth in relation to urban development, transport, environment etc. is critical.

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When purchasing a property with two or more people, the proposed purchasers must nominate as to whether they will hold the property as Joint Tenants or Tenants in Common. The question should not be taken lightly as the legal consequences of adopting either alternative may be considerably different and it may be a costly exercise to rectify the situation should it come to litigation or the necessity to alter the nature of the holding for any reason.

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As with most things in property investing you are dealing with a free and open market. Within this market the forces of supply and demand will always apply. Obviously, if there is a shortage of properties available for rent and an increasing tenant pool, rents will rise and vacancy rates will fall. While the rental market in general is very tight at the moment with insufficient properties available for rent there are isolated areas where this is not the case in the short term…

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Some folks are waiting for inflation fears to disappear and the world economy to be in the right state, with stable interest rate levels… before they will consider an investment opportunity.

Others want to land the perfect job or a perfect cash-flow business before they will get serious about securing their financial futures.

Fearful, they may end up with the ‘tenant from hell’ or crippled by procrastinitis (someone who means to do something… but never quite manages to get around to it!) Mr & Ms Average continue to sit on their hands!

Whether it is taking those first steps towards commencing an exercise program, an educational course or preparing for our retirement… there will never be the perfect opportunity.

There is an old saying… ‘Seek opportunity by the beard because it has a bald behind!’

Yesterday is history and who knows what tomorrow may bring… successful people seize the moment and the opportunities that present themselves each day!

Remember, the door to opportunity is always labeled ‘PUSH’.

Happy Investing,

Nick Lockhart

Billion dollar figures released this week in Stocklands Southern Gold Coast report have prompted City Hall Officials to formally announce Robina as the Gold Coast’s new CBD. The suburb is set to replace Southport after reports showed more than half of all last years commercial growth on the Gold Coast was in Robina. The strength of this growth has developers predicting that the suburb and surrounds could run out of vacant land within five years. Robina Land Corporations current project ‘The Rocket’ is set to relieve some of the commercial demand by bringing a further 12,500sqm of office space to the district.

Recent developments within the area include the expansion of Robina Hospital, Robina Town Centre, Queensland Rail Extension to Varsity Lakes and Skilled Park Stadium. With the soon-to-be built club training facility ‘Titansworld’, plus its already established shopping, residential and recreational precinct, Robina has truly become the suburb to both live, work and play. (myrobina.com.au)

Renting a 3 bedroom house in Cairns now costs as much as Sydney.

The cost of renting a 3 bedroom home in Cairns has risen by $45 since March 2006 and the median rent for a 2 bedroom unit has increased $50 (25%).

The Tenants Advisory Group president, Ted Morris , is quoted as saying that it is set to go even higher – “it could increase 50% to 60% any time.” (newsltd.com.au)