Prevention is better than cure!
Do you remember when the GST was introduced into Australia? It was July 2000. Since then, most working singles and couples could have managed to secure (at least) half a dozen well researched residential investment properties. If you did this; congratulations! No doubt, with falling interest rates and a seriously growing housing shortage… the global slowdown would be delivering you more benefits than challenges right now!
Reaction is all too common! Why wait for drastic times to push us to those “drastic measures” that the politicians keep spruiking?
Doesn’t it make more sense to conduct our financial affairs during the good times in preparation for those drastic times… that always find us sooner or later?
Now while we can’t change the past, it is unwise… perhaps irresponsible… not to learn from it!
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Do you love surprises? I don’t as a rule because they often come packaged up as problems!
The best thing we can do with a problem is rename it! It’s not a problem, it’s a “challenge”… and with every challenge comes an opportunity to grow!
“Those who remain flexible rarely get bent out of shape”!
When Katrina and I settled our last property purchase we were without a tenant for almost 4 weeks! Given the housing shortage, we were very surprised.
So why did it take that long for us to secure a tenant?
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It’s official. We now know what Australia’s best economic boffins think happened to the housing market in the first quarter of 2009 following a week of confusion (recall the ABS numbers conflicted with those of both APM and RP Data-Rismark).
In the RBA’s Statement on Monetary Policy released today, the RBA concluded (p33): “After falling modestly in 2008, nationwide housing prices were little changed in early 2009, although there is some variation in the range of available measures that use different techniques to control for changes in the composition of property transactions (Table 10).”
In Table 10, the RBA shows five different measures of house price changes in the March 2009 quarter.
Four of those measures – from APM, which uses a stratified median price index, and my company, RP Data-Rismark, which uses an hedonic regression technique – were positive or flat across Australia while one, the ABS’s stratified median price index (the one that the media has focused on), was down strongly.
The ABS’s index data does not sit well with the RBA’s conclusion that “nationwide housing prices were little changed in early 2009”.
>>> Business Spectator – The RBA’s view on house prices – Blog – Christopher Joye.
Australia is experiencing a population boom not seen since the 1960s – but it is not a baby boom.
High levels of immigration are fuelling record population growth.
Australia’s headcount increased by almost 400,000 last year to 21.5 million, fresh data from the Australian Bureau of Statistics (ABS) shows. More than half of the new arrivals, or just over 230,000 people, were immigrants. The rest were babies born in Australia. The federal government this week moved to reduce immigration, cutting the skilled migrant intake by 14 per cent in response to the economic crisis.
The rate at which the population is growing has surged 50 per cent over the last five years. It is now growing at just under two per cent a year. “The last time Australia experienced higher growth rates was in the 50s and 60s as a result of post war migration and high birth rates,” the ABS said in a statement.
Western Australia and Queensland attracted the most new people in the year to September 2008. Tasmania was spurned.
For people moving within Australia, Queensland was the mecca, while people from NSW appeared keen to leave their state.
Cathy Alexander, Sydney Morning Herald
March 18, 2009
March 18, 2009
Australia experiences high population growth: Australian Bureau of Statistics (ABS)
Australia is continuing to record high population growth, according to figures released today by the ABS.
A total population growth rate of 1.8% was recorded for the year ending September 2008, up from the 1.2% recorded five years ago. The last time Australia experienced higher growth rates was in the 50’s and 60’s (above 2%) as a result of post war migration and high birth rates.
As at 30 September 2008, Australia’s population had grown to 21,542,000 an increase of 389,000 people over the previous year. Australia’s net overseas migration contributed to more than half of this growth at 61% or 235,900 people. Natural increase (the excess of births over deaths) contributed 153,400 (39%).
In the same period, Western Australia continues to record the fastest population growth at 2.9%, followed by Queensland (2.5%), the Northern Territory (2.2%), Victoria (1.8%), the Australian Capital Territory (1.4%), New South Wales (1.3%), South Australia (1.1%) and Tasmania (0.9%).
Queensland and Western Australia received the most people from net interstate migration, gaining 22,700 and 5,600 people respectively from the other states and territories. The states that lost the most people to interstate migration include New South Wales (down 22,400), South Australia (down 4,700) and Victoria (down 2,400).
Keep this philosophy in mind the next time you either hear, or are about to repeat a rumour.
In ancient Greece Socrates (469 – 399 BC) was widely lauded for his wisdom. One day the great philosopher came upon an acquaintance who ran up to him excitedly and said, “Socrates, do you know what I just heard about Plato, one of your students?”
“Wait a moment,” Socrates replied. “Before you tell me I’d like you to pass a little test. It’s called the Triple Filter Test.”
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To make sense of the property market we must separate opinion from fact. Opinions will always be heard… just in greater numbers now perhaps. If you are prepared to “drill deeper” and dissect the evidence available; the facts will speak for themselves. There’s no reason for allowing the conflicting voices of opinion to keep you confused!
In the current round of Web Seminars we are offering, I highlight four key factors that are a MUST… if you expect to draw any credible conclusions.
1. Record Population Growth
2. Investors Have Fled The Market
3. Home Ownership Unattractive
4. New Construction Has Stalled Badly
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People renting houses can expect to pay increasing rents during the coming financial year due to a significant drop in lending for property investment according to Paul Bennion, Managing Director of tax depreciation specialists DEPPRO. Mr Bennion said that the latest ABS figures showed that lending for investment housing in Australia fell by nearly $5.0 billion or 23% to $16.2 billion during the September 2008 quarter compared to the September quarter 2007. “This major fall in property investment means that there will be fewer rental properties moving forward at a time when there is already a shortage of rental properties in many parts of Australia,” Mr Bennion said.
Over the past year, average weekly rents in many capital cities have increased by more than 10% and this trend is likely to continue due to this decline in property investment. “Investment in property has declined due to the growing economic uncertainty being caused by the global financial crisis. However, the good news for existing property investors is that they should receive rising rents while at the same time mortgage repayments will decline due to falling interest rates.”
Have you ever wondered why the things that evoke the most passion or emotion in us… are usually known by four-letter words? Some of these include love, hate, fear, work and of course… Golf! Another emotion-charged four-lettered word that causes most of us to break into a sweat… is DEBT!!!
Mostly, we are conditioned to fear debt and avoid it at all cost. So why does debt propel one family to great riches… and another to poverty? How come the majority of wealthy people quite adequately manage large amounts of debt? Can debt be a positive thing to help us get ahead… or is it always a negative thing to be avoided? Before we can accurately answer this, we need to clarify our definition of debt!
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Time used unwisely and spent without thought will make you a pauper and leave you with naught, but time that’s well spent will stitch upon stitch weave memories and dreams that will make your life rich.
Time is money, as they say. But yet many whittle away the hours without thinking of the value that has been cast away with every second. This does not mean that we should work each and every hour of the day. There needs to be an investment of time in leisure, fitness, relationships, further education and at times in doing absolutely nothing. Learn to say ‘no’ to the good in order to say ‘yes’ to the best. Invest in what is best for you and your life. Take time to smell the roses at times. When you work, work with all your heart and when you play, play with all your soul.
Happy Investing,
Nick Lockhart
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