mrd

It has certainly been a roller coaster ride for “Financial Markets” since the second half of 2008 – and it’s not over yet! I quickly learned to turn a deaf ear to the continual flow of property market pessimism – I hope you did too.

Surprise, surprise… those loudest warnings of a property market crash have come from those with vested stock market interest.

I’ve been saying it for three plus years so this week I’m going to let Terry Ryder do the ‘speaking’. Terry has three decades of experience as a journalist, author and researcher specialising in residential property. He is a columnist for The Australian newspaper and is regularly interviewed about real estate issues on radio stations around the nation and has appeared on TV programs such as 4 Corners, Today Tonight, A Current Affair, Your Money Your Call, Property Success, Extra and 60 Minutes (NZ). In September 2011, Terry said:

After all the warnings, property stays solid while the share market collapses.

In the week ending Friday 5 August, the Australian share market dived. In three days over $100 billion was wiped off the value of Australian shares.

The decline on 5 August alone was 4%, the biggest one-day decrease since the GFC impact in 2008. It was generated by events in the US, including a downgrade of its security rating.

The significance of this is that few economists or share market analysts warned us it was coming.

By contrast, the same people have been battering us with predictions of declining house prices. According to the more strident talking heads in the media, our homes are over-valued and a US-style collapse is imminent.

They’ve been telling us that for three years.

But the forecast apocalypse hasn’t happened in real estate. Instead, it’s happened in the share market, and no one told us to expect it.

Perhaps analysts should stick to their specialties. Some advice on impending trends with shares would have been handy, given that so many Australians have their retirement savings trapped in the share market via their super funds.

Economists and share market commentators should leave real estate analysis to specialists who understand the market. For the past three years, genuine real estate analysts have been forecasting steady markets and they have been proven largely correct.

NB: I’m not taking a cheap shot at the stock market as a legitimate investment vehicle… just the so-called experts who led people up a garden path with fear and false property market predictions. Their shallow arguments were never justifiable; as I am on the record (since 2008) saying. It bothered me over the years because of the many people who have sold property to avoid a crash. In their attempt to avoid loss, well-meaning people have become the biggest losers – largely due to the media giving the most attention to those who were wrong!

FACTS

• If you’re a property renovator, trader or speculator – GOOD LUCK
• Those who follow the mrd “set ‘n’ forget… for busy people” ™ buy and hold strategy can rest easily knowing that residential property is very forgiving – it never goes back to zero. If you make mistakes – just wait! If the market turns against you for a season – just wait!
• Don’t be deceived into chasing quick riches; that’s not what investing in property is about
• Grow in your understanding of, and respect for, debt
• Investing into residential real estate – over time – absolutely can turn your dreams and goals into your reality

About a month ago I made mention of a syndication deal I was putting together to take to and offer the developer building on Brisbane’s North side. The offer was made two weeks ago today and it took me 11 days to reach agreement but what we have secured on behalf of a number of mrd clients is a fantastic deal. Congratulations to all those who are part of this group! With just 28 working days left to be eligible for the Queensland Government’s $10,000 building boost grant… if you want to consider joining this group you will need to let me know personally. There is no mention of this offer on my website as the offer is not being made public. So… if you are even considering a property purchase that ticks all the boxes you need to enquire >>>here.

Interest rates have come down again!

Would you like an end of 2011 financial health check… and discover how much you may be able to borrow? If so complete an mrd “My Starting Point” Assessment form >>>here.

From all of us @ mrd… we wish you and your family a very Merry Christmas and a HUGELY prosperous 2012! Read more…

Take out public holidays you now have “Just 28 Working Days To Qualify For The Grant”!

Qld Building Boost grant offers you $10,000

… but only if a contract is signed by 31st January!

Find Out All About It Here!

Located in an area that is undergoing major redevelopment and earmarked to become a major regional centre. Just minutes from historic Guildford, and a part of the Swan Valley, Viveash sits right next to Midland and benefits from the revitalisation of the area and is just 20 km east of Perth CBD.

Much of the plan for future development of Midland is centred on Transit Oriented Development principles. PRD research has shown that the top of the list for 57 per cent of house hunters is access to public transport. Read more…

By Terry Ryder, 12 December 2011

The two weakest city markets this year, Perth and Brisbane, are poised for a change in status.

I expect them to emerge as the strongest city markets next year.

The two cities have much in common: boosted by the emerging resources boom, both have seen CBD office vacancies contract and demand for industrial property grow. Both are seeing growing airport traffic from fly-in-fly-out workers.

Both are seeing improving sales volumes and rising rents for residential property.

The next stage is an increase in prices.

>>>> Perth and Brisbane to benefit from boom.

“I Find It Extremely Difficult To Be Brutally Honest” when communicating with such a large group of subscribers. I’m very aware of how easily something written can be misinterpreted… so, with that as my ‘disclaimer’, I’m going to try!

From childhood I was taught that ‘your word is your integrity’. Doing the right thing when faced with decisions; not what’s convenient or profitable is not just to the advantage of the other person… it’s to yours as well. Just as the law of gravity guarantees that when something is dropped from a height it falls to the ground… there are many (perhaps less obvious) powerful laws at work designing the sort of future you and I are destined to live out.

I’m writing this article from a private Villa in Bali. I’m here celebrating 25 fantastic years of marriage… and Katrina’s here for the holiday (ha, ha). The Balinese are largely Hindu and believe in Karma – i.e. do good and good comes back to you; do bad and bad comes back to you. As a Christian I have a very similar belief but call it ‘sowing & reaping’. Forrest Gump famously said ‘life is like a box of chocolates’ but in reality it’s more like an empty garden bed. Born equally we venture through life constantly facing decisions… often very tough ones. The words we speak, the actions we take and the way we treat others along the way represent the sowing and cultivating of life’s seeds. Today’s experience reflects yesterday’s seeds and to change what you experience ‘tomorrow’ you have to change what you do today. Anyone can build a beautiful garden… but it will take planting the right seeds and tending to it… life is just like that.

Giving is the path to receiving just as loving others (I mean the real, unconditional kind) is the way to find love… and being a friend to the friendless will result in people wanting to be around and supportive of you. Like most Westerners in Bali I enjoy the thrill of negotiating a great deal when buying from the locals, but what I have enjoyed more so is seeing the reaction from locals when ‘showered’ with random act of kindness.

We have had a driver this week. A beautiful man with a wife and three young boys all living in a boarding room that costs him AU$50 a month to rent. The income he earns is dependent on the number of tourists he can find to drive around Bali and is used to support his immediate family as well as his parents and siblings back in his home village. Katrina and I enjoyed bringing him in from the car park and including him when we dined in a beautiful restaurant. Buying groceries for his wife and treats for his kids and paying him many times more than what was required was significantly more rewarding than ‘screwing’ the best possible deal from a poor and desperate man. It really is far more blessed to give than to receive… and the law of sowing & reaping (as with gravity) makes the whole experience a win/win.

The primary reason I started mrd back in 2002 was because of conflict! On the one hand I found it hard to contain my excitement for how property investing (done properly) could lift ordinary people from financial mediocrity to a place of significance. On the other hand I was disgusted at the greedy, manipulative and self-centred methods employed by many property marketers. I concluded that if selling investment property could be a win/win and done with integrity then I was in… if not I would rather go and do something else altogether. The only way to control that outcome was to start my own (radically different) business.

For almost a decade now my goal has been to create an environment where you would feel comfortable to engage, ask questions, be mentored and learn – at your own pace – safe in the knowledge that we will never interpret your desire to learn as a licence to sell to you. The short-term survival of my business requires property sales… but its long-term survival requires a win/win experience. That is, if a transaction is not in the interest of a client then neither is it in ours!

Like you, I want to succeed, comfortably provide for my family and create enough wealth so as to make a difference in the lives of many. My team here at mrd is both qualified and capable in helping you do likewise.

Now To Being Brutally Honest!

My level of knowledge and understanding goes way beyond property; I know what I’m talking about! While I didn’t see the GFC coming (who did), since then my summary of the economy has been pretty spot on. My calls for interest rate cuts at various times have proven to be either exactly right – or where the RBA took contrary action time has justified my position and shown them to have moved too slow. I guess what I’m saying is “My economic assessment has been repeatedly right when those of most economists weren’t”. That’s not an attempt to big note myself but to reassure you – especially at a time when so many people are left confused by the mixed messages being reported – that when dealing with mrd you are dealing with a company that not only cares but understands!

On September 28th last I wrote…

“My opinion… the Reserve Bank (RBA) should have dropped official Interest Rates last month by as much as 50 basis points – or ½%.”

This would have:

• Boosted consumer confidence
• Boosted spending and given retail a shot in the arm
• Created more jobs as money is freed up to flow through the economy
• Caused the Australian dollar to fall (sooner and further); which in turn is good for tourism, manufacturing, agriculture, mining (and other export markets)

The argument of whether the RBA should be focussed primarily on curbing inflation or stimulating the weaker parts of the economy will go on. Thus far they have been more concerned with the inflation side of the equation. I disagree with their judgement and still expect that they will move to drop rates soon – perhaps as soon as next Tuesday at their ‘October 2011 meeting’. I will be surprised and disappointed if one or two downward rate movements (totalling 50 basis points) don’t happen before Christmas… as will retailers and those in tourism.

I stand by my statement of late September! The RBA should have moved to lower official interest rates by 50 basis points (or ½%) at their meeting on the first Tuesday in September. As we move into 2012 and beyond I will continue to give detailed commentary, not just on the property market, but local and international economics… as these are all inseparable. In the mean time when I say that now is the time to seriously consider talking with us about your next investment purchase that is because I sincerely believe that to be true. But if you’re not convinced and think otherwise… we’ll have to wait and let time prove one of us right!

“Nick, I would like a no pressure, no obligation opportunity to have ‘My Starting Point’ assessed to enable me to explore what may be possible for my family going forward. I understand that mrd will treat me with the utmost respect by giving me the freedom to come at all this in my time as I grow in confidence and comfort”. Request this >>>here

Read more…

There are now just 53 days to go; time is running out to get your $10,000 Qld Building Boost grant; even less when you take out the Christmas break!

NB: Fully executed contracts must be exchanged by 31st January 2012

Queensland Government’s $10,000 Building Boost!

Find Out All About It Here!

Michelle Collins | Sunday Mail 4/12/2011

UNITS continue to outperform houses in Brisbane, according to the latest market research from property analysts RP Data.

RP Data analyst Cameron Kusher said Brisbane house values had increased at an annual rate of 8.2 per cent on average over the past decade compared to annual growth of 9.2 per cent on average for units.

“The superior performance of units is partly due to the fact that values were lower to start with but it also indicates that medium and high-density housing is growing in popularity,” he said.

He attributed the popularity of units to price and rental returns.

“Units offer owners the opportunity to live in locations of the city in which they would otherwise not be able to own a detached house,” Mr Kusher said.

“As cities continue to grow, location becomes increasingly important.

>>>> Unit values outperform houses over the long haul | Reviews and Recommendations | Courier Mail.

An old man lived alone in the country. He wanted to dig his tomato garden, but it was very hard work as the ground was hard. His only son, Vincent, who used to help him, was in prison. The old man wrote a letter to his son and described his predicament.

Dear Vincent,

I am feeling pretty bad because it looks like I won’t be able to plant my tomato garden this year. I’m just getting too old to be digging up a garden plot. I know if you were here my troubles would be over. I know you would be happy to dig the plot for me.

Love, Dad

A few days later he received a letter from his son… Read more…

If normally you switch off to economics, politics and investment commentary make an exception this time. More and more people are “Switching To Self Managed Superannuation” and the reasons are compelling. You have probably either accumulated a large super balance or will do over the coming decades making this a potentially valuable read.

To find out if self managed super is a viable option for you go >>>here

Even though Australia’s unemployment rate will rise slightly next year due to the turmoil on European financial markets, continuing strong economic growth is predicted; 4% in 2012 and 3.2% in 2013. Public debt remains low at just 22.4% of GDP and when compared with countries in the North Atlantic zone it’s easy to see that Australia is in very good shape; Japan’s public debt is 225.8% of GDP, Greece 144%, Italy 118.1%, UK 76.5% and USA 58.9%.

I’m yet to meet anyone who doesn’t want the results successful investing brings… just plenty not willing to do what it takes. With knowledge and understanding risk diminishes and opportunity surfaces. Success in business requires you adapt with changing conditions and investing is really no different.

At the risk of some repetition let me share my considered views on the economy again… and how you can position yourself for prosperity.

Europe will go into recession and thus the USA will do likewise. Weaker demand for Chinese produced goods from Europe and the USA will cause a slowing in Chinese manufacturing. China’s demand for Australian resources will soften (although only ‘somewhat’).

The Board of the Reserve Bank of Australia (RBA) has shown itself to be paranoid of high inflation; they’re quick to raise interest rates to slow the economy. As a slowing in China takes a little heat (and I do emphasise little) from our resource sector inflation will drop and so will interest rates. Wayne Swan’s announcement this week to cut government spending and deliver a budget surplus in 2012-13 adds to my argument for an interest rate cut next Tuesday… but being the ultra conservative bunch that they are the RBA Board may hold off until they next meet in February 2012.

Self Managed Superannuation Funds (SMSF)

We keep hearing that a person’s greatest assets are (1) Their home and (2) Their superannuation. That’s a worry when figures across all industry and retail funds from the past 10 years reveal average superannuation returns of just 3.3% per annum! That’s basically the same as the average inflation rate. No wonder what started as a trickle has become a steady flow into SMSF.

The rush into SMSF is not just because people want to invest their retirement savings in bricks and mortar and put distance between them and the uncertainty of the financial markets but because of the ability to leverage up to 80%. Did you know that legislation was altered in recent years and it is now possible for a SMSF to borrow up to 80% of the value of a new residential property. Now, up to four people with a combined super balance of between $100,000 and $150,000 can consider a median priced residential property as an alternate to shares in companies that they have absolutely no control over. Remember, when an asset valued at $500,000 doubles in value the additional half a million dollars of new wealth belongs to the person or entity named on the title-deed; regardless of how small the initial deposit used to secure the asset was! That’s the power of leverage.

Read more…

Have you had your Property Strategy Blueprint Consultation?  Watch a short demonstration >>>here Read more…