mrd

Cameron Atfield | SMH | The Age | The Courier Mail | Feb 1, 2012

Brisbane is growing faster than any comparable city in the world, according to a new report.

Brisbane will grow faster than any other ‘mature’ world city over the next eight years, according to an international study compiled by market analysts Jones Lang LaSalle.

The only other Australian city to make the list, which comprises of cities with a “mature property market” and a population of more than 1 million, was eighth-placed Perth.

The study, A New World of Cities: Redefining the Real Estate Investment Map, ranked Brisbane number one for expected gross domestic product growth from 2012 to 2020.

Sixteen of the top 20 cities were in North America.

The list ignores developing cities, which grow at a much faster rate.

JLL Brisbane-based research and consulting director Leigh Warner said it was not surprising the Queensland capital had come out on top, primarily due to the strength of the state’s resources sector.

A similar boom in Western Australia also contributed to Perth’s strong showing, he said.

“Not only is it creating investment that drives GDP, but it’s also driving population growth in both those markets, which is the ultimate driver of property demand across all property sectors,” Mr Warner said.

While Brisbane’s strong showing came as no surprise to Mr Warner, he conceded public confidence may not reflect the city’s strong showing.

“Even in the middle of the GFC, we put out a couple of papers on coal seam gas and the resources sector more generally and the impact it could have on this region,” he said.

“I’m certainly not surprised, but I guess it is a surprise to some when we’re seemingly doing so poorly in the residential property market at the moment and other visible aspects, like our retail property market.

“But certainly the office market is already a major beneficiary of the resources sector and has been recovering very strongly for over 12 months now.

“Usually the office market lags in economic activity, but in this case it seems to be leading because there’s a lot of up-front jobs creation through the resources sector.

“Hopefully that will flow through to broader jobs growth and lift other areas of the economy like retail, which is suffering at the moment.”

Mr Warner said emerging cities, such as those in the boom economies of China and India, were not included on the list.

If they were, he said they would dominate world growth.

“For property investors, a lot of them don’t want the direct exposure to an emerging market because there’s fundamental risks associated with investing in countries where there’s not even the basic security of property rights and you’re at the whim of an unpredictable central government with a lot of power,” Mr Warner said.

“So there’s a lot of risk inherent in direct investment in emerging countries, so looking at where to invest – and this is something that a lot of investors coming through our office are doing – they’re looking for the markets that have the exposure to those (emerging) markets, like Perth and Brisbane.

“… There’s a lot of investors looking for those mature cities that are more secure as an investment, but with an indirect exposure to the Asian growth story.”

However, Mr Warner said there were challenges associated with such growth.

“If we don’t keep up in terms of infrastructure delivery and accommodating a large population, then there is a real risk that the cost of living would go up quite significantly,” he said.

“But in the end, it all comes down to how well we manage it. There’s also magnificent opportunities in how we capitalise in terms of state revenue from this mining boom, so if we use that wisely and spend it wisely then we can all benefit from it.”

Lord Mayor Graham Quirk said he was “delighted” with JLL’s assessment of Brisbane’s commercial growth opportunities.

He said the report showed Brisbane was on track to be one of the world’s most prosperous cities.

Read more…

Reading yesterday’s article (Sydney Morning Herald, The Melbourne Age, Brisbane Courier Mail and others) titled: ‘Growth Spurt Puts Brisbane On Top Of The World’ along with a dodgy seminar I attended on Tuesday night has inspired me this week; where my focus is on Brisbane! Before I give my controversial 20 cents worth on the guru (charlatan actually) that I listened to on Tuesday night check out the following pics showing the evolution of Brisbane since the late 1800′s. Compare pics of Queen St and Customs House in 1898 with that of  today.

Brisbane CBD in 1883

Brisbane Customs House in 1898

Be sure and read on… I couldn’t help but let loose with my ideas – and if I offend anyone; too bad!  Read more…

The cat is out of the bag with how well Brisbane property is expected to go!

In recent months mrd has released numerous opportunities in the Brisbane market; but two in particular stand out (one on the North Side and one on the South Side of Brisbane).

Nick  formed a syndicate of investors before approaching one of these developers and managing to secure a deal that is too good for us to advertise here or publicly give details on our website.

Soon after this we were approached by the developer of the Brisbane South Side project and Nick shared with him the success of the North Side syndicated deal, suggesting that if he wanted our help he would need to offer something similar; which he has!

Both of these property opportunities are in prime locations that tick all the boxes! Both opportunities are almost fully subscribed.

Up to five investors (only) can still take advantage of one of these offers and also pick up the Qld Building Boost of $10,000.

One year ago Nick wrote an article titled “The Property Investor’s Tipping Point“.  We saw exactly that situation – mixed messages throughout 2011 – but it now seems the messages are more and more becoming positive with fewer and fewer sceptics talking down Brisbane.

Most of the pundits are saying that the Brisbane market has bottomed out and will now begin to steady, ready for its upward swing.

If you have any interest in finding out more about one of these five offers; or about (Brisbane) property in general, make contact with us today >>> here

Read more…

By Martin Bell

The media is awash with people willing to make predictions about the property market in 2012 and beyond. From those who are optimistic to those who are on the ‘bursting bubble’ bandwagon.

As the Danish physicist Niels Bohr once said “Prediction is very difficult, especially about the future” (funny I never imagined he had a sense of humour). While we don’t claim to have a ‘crystal ball’ there does seem to be a gradual turn in the tone of the media articles in the past month (the significance of which Nick pointed out in his article last year titled ‘The Property Investors Tipping Point’).

We are always interested in vacancy rates as these show the scarcity of suitable accommodation. Historically a drop in vacancy rate is often a prelude to increasing property prices (it’s simple supply and demand).

A vacancy rate of around 3% is considered to be a ‘balanced market’. Recent reports show the Brisbane vacancy rate is now just 1.8% in some areas.

• An article last week quoted Dean Yesberg (Ray White Brisbane CBD principal) as saying “January has been absolute pandemonium”. “We have multiple people lining up for properties, multiple inspections at the same time and multiple applications going on properties”. He said one and two-bedroom apartments were the most popular and on average there had been a recent 5 per cent increase in rents.
• According to the Sunday Mail, while rents in mining areas were extremely high (and many would argue unsustainable) Brisbane has also seen increasing rents (which of course is a follow on from the lower vacancy rate). Inner-city Fortitude Valley house rents rose 112 per cent. Renters in nearby New Farm were slightly better off with a 52 per cent spike. Unit rents in Hendra (Brisbane’s inner north) were up more than 44 per cent. These figures will of course vary slightly from one month to another, across different suburbs and product types (units, townhouses etc).
• These increasing rental returns and reduced vacancy rates attract more investors and increase demand for property. Coupled with population growth this will be reflected in higher property values. The latest State Government statistics (Gold Coast News 30th January 2012) predicts “Brisbane is expected to need an extra 102,000 homes by 2031″.
• In the Sunday Mail on New Year’s day Adam Gray from DTZ blamed simple economics – too many people and not enough homes - “We are not adding much supply but we have added more than 100,000 people in the past 12 months”.
• All this is also supported by the Housing Industry Association (HIA) report from September 2011; forecasting a supply shortage of dwellings Australia-wide . It was interesting that their table of short supply anticipated for 2020 that Brisbane was number one and Gold Coast number three.

See Australian Housing Shortages by 2020 >>>here

See Also…

• Landlords Have Their Pick Of Tenants
• Strong Fundamentals Mean There Is No Australian Housing Bubble
• Gold Coast Real Estate
• Test Of Faith For Property Believers
• Coast Suburbs Packed To The Rafters

To discuss any aspect of your existing investment property portfolio, current market conditions, financing strategies or current unique investment opportunities go >>>here

Happy Investing,

Nick Lockhart
Our Customer Care Program works for you… because investing is personal!

By Larry Schlesinger
Monday, 30 January 2012

There is no Australian housing price bubble, says ANZ in its latest assessment of the Australian property sector.

In its January assessment of the property market, the bank argues that gains in house prices over the past 25 years have been driven by increases in household income and lower interest rates.

The bank forecasts house prices will remain on hold or fall slightly in 2012, but will not crash.

“A combination of lower interest rates, falling house prices and rising household incomes has improved Australian house purchase affordability over the past 12 months,” say report authors David Cannington, senior economist at ANZ, and Paul Braddick, head of property research at ANZ.

“Despite the continued concerns about significant Australian house price overvaluation from some commentators, housing market fundamentals remain supportive,” they say.

According to ANZ’s analysis, all the growth in Australian house prices since 1986 can be explained by gains in average household incomes and a structural decline in the cost of borrowing.

“Cross-country comparisons using partial valuation measures are commonly used to contend the case of overvaluation of Australian house prices. That is, suggesting actual house price growth in Australia has run significantly higher than justified by explained price growth,” says ANZ.

However, international house prices, rental yields and house price-to-income ratio comparisons compiled by ANZ suggest that Australian house prices have not deviated from international trends.

ANZ forecasts housing affordability to improve in 2012 following recent improvements due to softening house prices, rising household incomes and lower mortgage rates.

Among the factors ANZ says will continue to support the housing market is net migration, which is starting to rebound after the recent slowdown and combined with weak housing construction will add to the pressure building within the housing sector.

“While housing construction continues to weaken under the cloud of negative market sentiment and softening prices, forward indicators suggest the recent slowdown in net overseas migration will continue to reverse,” say Cannington and Braddick.

“This renewed housing market tightening will add further upward pressure on rents, household size and provide a fundamental support to flagging market activity, especially for the first-home buyer market.”

However, there will be no marked improvement in new home building in 2012, according to ANZ.

“Soft house prices, weak housing market sales activity and tight credit conditions have dampened residential developer sentiment. Despite the recent interest rate cuts, weak housing market sentiment will continue to weigh on residential development activity through 2012,” says Cannington and Braddick.

via Residential – Strong fundamentals mean there is no Australian housing price bubble: ANZ.

Last week the International Monetary Fund (IMF) updated its ‘World Economic Outlook’ reporting a cut to their world growth forecast for 2012. They expect Europe will fall into a mild recession which will affect other parts of the world including the USA, emerging markets, and developing countries. Projected growth in the advanced economies has been revised down to 1.2 percent this year and 1.9 percent in 2013.

Never Let The Truth Get In The Way Of A Good Story

Different people/groups may ‘spin’ these figures in a variety of ways… but let’s simply take an objective and sober look at the facts.

• For all the talk this report has incited of ‘another global recession’… the same report says global economic growth in 2012 will be 3.3 percent! Dissecting the differences between individual regions and countries paints a positive outlook for Asia… and those countries tied to it.
• 2012 – 2013 growth in emerging and developing economies is expected to average 5.75 percent; down from the 6.75 percent growth in 2010 – 2011
• Despite a 0.75 percentage point downward revision, developing Asia is still projected to grow most rapidly at 7.5 percent on average in 2012 – 2013
• Economic activity in the Middle East and North Africa is expected to accelerate in 2012-13
• Most oil-importing countries in the region face muted growth
• The impact of the global slowdown on sub-Saharan Africa has to date been limited to a few countries, most notably South Africa, and the region’s output is expected to expand by about 5.5 percent in 2012

When reading editorials or listening to TV programs that report on what the IMF said… it’s important to be mindful of what their report actually contained. The points above should be comfort enough for those fortunate to be living in this great country we call Australia; but here’s some more nonetheless:

• “The adverse spillover effects are expected to be the largest for central and eastern Europe, given the region’s strong trade and financial linkages with the euro area economies”
• “The impact on other regions is expected to be relatively mild, as macroeconomic policy easing is expected to largely offset the effects of slowing demand from advanced economies and rising global risk aversion. For many emerging and developing economies, the strength of the forecasts also reflects relatively high commodity prices”

Like me you want to navigate your way through these challenging times and come out the other side better off. I see MORE opportunity to progress financially than in years gone by – we’re facing the perfect storm!

1. Sections of our property market have bottomed and are just beginning to rise – that’s a buying opportunity
2. Interest rates are low and dropping – this will increase demand for property and push prices higher
3. Australia’s population is growing yet new housing numbers consistently fall short – limited demand MUST result in higher prices

I’ll stop there although I could go on.

Swimming is great but care needs to be taken to avoid drowning… so too with investing. At mrd we only recommend the responsible use of the right kind of debt. Don’t make avoidable mistakes… talk to us first!

The Downside Of A Buyer’s Market

In a buyers market when prices are down… so too are valuations. In my experience this is when valuers are at their ‘worst’, making it difficult to access and use existing equity. For those in a position to take advantage of a buyer’s market… DO IT – THERE’S NO BETTER TIME!

Your Next Step

Step one is to have your current position assessed by someone whose motives are not self-centered. NB: Don’t pay to have this done – you don’t need to! For those with the borrowing capacity, buying conditions and some buying opportunities make now a great time to be considering your next investment.

• Heather from mrd finance… along with one of our property mentors will happily (and professionally) assess your current position before discussing your options with you. To request this support simply complete a “My Starting Point” assessment form >>>here.
• Alternatively… contact us with your question(s) on ‘anything property’ >>>here

Read more…

On Tuesday week the Reserve Bank of Australia (RBA) will meet for the first time since early December to decide what to do with interest rates. In my opinion it is not a matter of IF they put rates down again… but by how much. As I sit here right now I cannot think of any half-decent argument for keeping rates on hold so I’m predicting another drop. I’ll even go out on a limb and suggest that they should bite the bullet and drop them by 50 basis point (or a full half a percent).

BUT… I do not believe the banks will pass the next rate cut on in full; making the argument for an even bigger rate cut (say 60 or 65 basis points) justifiable. What the RBA is more likely to do, however, is go beyond the usual 25 basis points in February (but not more than 50 basis points) and then when the banks don’t pass it all on to consumers… follow it up with another rate cut in March or April.

My disclaimer, however, is that while I have been consistently right with what SHOULD happen (as proved over time)… the RBA board doesn’t always ‘get it ‘ at first. So let’s sit back and see what they do. Either way, I am again on the record for you to ‘judge’ over the months ahead.

Please send me your question about ‘anything property’ and/or ‘anything economics’ >>>here Read more…

mrd has secured an exclusive offer that matches and surpasses the Qld Building Boost of $10,000

Brisbane Poised For A Change In Status

“…boosted by the emerging resources boom Brisbane has seen CBD office vacancies contract and demand for industrial property grow and is seeing growing airport traffic from fly-in-fly-out workers… sales volumes and rising rents are being seen…

…The Next Stage Is An Increase In Prices..” – Terry Ryder

Stunning Three Bedroom, Two Bathroom Townhomes In A Boutique Project Of Just Eleven Large Homes… but Limited (two only) Spots Available!!!

Stop Procrastinating!

Position Yourself Now For The Next Price Move

For more information:

• Go >>>here
• or call 1300 883 854

Read more…

The New Year is a time of reflection and goal setting. I’d like to use a parable to share the truth that “There Is No Such Thing As Standing Still”. Happy New Year by the way; I trust you and your family had a pleasant Christmas break and are looking forward to an exciting and prosperous 2012.

Many people have heard of the parable of the talents but for those who haven’t it is essentially the story of a man preparing to leave on a journey who entrusts his wealth to three servants; dividing it on the basis of their abilities. The first receives five (units of currency), the second two and the third one. In modern terms we could say he apportioned $500,000, $200,000 and $100,000 respectively.

Servants one and two set about investing and doubled his money while the third, motivated by fear, simply hung on to the $100,000 (dug a hole in the ground and buried it actually). Inflation reduces the real value of money over time… hence the expression ‘if you’re not moving forward you’re going backwards’; there is no such thing as standing still.

Ponder these:

• Fear is nothing more than faith in a bad outcome
• Optimists and pessimists both hold expectation for a future they can’t yet see
• By definition you cannot overcome if there was no chance of defeat
• Every winner was a possible loser

I hold the view that long-term success (at anything) is ONLY enjoyed by those who push through the tough times. I’m not impressed by the ‘overnight success’ but I am by those who pass the test of time; still standing! Single parents, athletes, business people, accident victims and everyday ordinary people face adversity in the pursuit of their goals. Subject to attitude; the very same obstacles become stepping-stones for some but ‘tomb stones’ for others.

Throughout the 10 years of mrd’s existence I have attempted to evenly split my teaching between (1) the nuts ‘n bolts of (safely and responsibly) investing in property and (2) helping people stay the course when the going appears to be getting tough… the biggest battle is often in a person’s mind!

The Global Financial Crisis (GFC) and now the situation in Europe are classic examples. Doomsayers and fear mongers have repeatedly warned us of an imminent property crash. These self-appointed experts (NB: from other industries) were wrong; time and time again. I’m not suggesting sticking your head in the sand and thinking nothing can go wrong… just that if you are an investor you are ‘playing in the big league’ and you need to be a professional in what you do. Any athlete, musician, parent, CEO (or whatever) that acts from fear rather than responds from knowledge will never be the best they could have been.

Seasons & Cycles

There are four seasons in a year (or in Melbourne in a day); so it is with life. Tough times (in a marriage, the economy, a business or a career etc) pass. The ‘trick’ as I once heard Pat Mesiti say is “When you’re going through hell; don’t stop”!

In the parable I referred to above, slave # 3 reacted to (was gripped by) fear, resulting in a strong rebuke and being called “evil and lazy” by his master. He had the original $100,000 taken from him and given to the servant who had turned $500,000 into $1,000,000. Bob Brown and the Australian Greens would not be happy about that. They’d rather penalise the successful risk taker (via higher taxes) to reward the person controlled by fear. Good luck lifting the living standards of the whole (and by default individuals) by incentivising mediocrity and laziness.

Where To From Here?

In 2012 you are faced with exactly the same decisions as you were in January 2007, 2008, 2009, 2010 and 2011. Will you will turn on the six o’clock news, hear of  the challenges in Europe and sit on the sidelines for another year… or you will look for knowledge and opportunity and take action? Whether with property or not… I sincerely hope you do ‘something’ because there is no such thing as standing still!

For a complimentary financial health check and the opportunity to have your potential borrowing capacity assessed, complete an mrd ‘My Starting Point’ assessment form >>>here

To speak with a property mentor about property opportunities (including Federal or State Government grants), leave your question(s) >>>here

Read more…