The property market is subject to cycles of activity! The term property cycle refers to the time it takes a property to double in value.
Assuming a 7 Year property cycle; expect a time of no growth followed by a time of of little growth (totalling about 5 years). Depending on how far prices rose during the previous 2 boom years; the first 2 years of the new cycle may even see a softening or correction of prices from off the back of the high point in the last boom.
Over the past 8 years or so speaking with all types of people on the subject of investing in property, many, generally new to investing, ask me the “what if” questions. My broad base of experience has meant my answers have generally put their minds at ease. Two questions, however, that I lacked a good solid answer for were:
Well, with regards to Q 1, I still have no concrete answer for, and hopefully never will. With respect to Q 2, however, I can now (i.e. only now) say from experience… “It’s all ok”!
The Reserve Bank of Australia (RBA) will meet for the first time this year, next Tuesday. While it’s difficult to know exactly what they will do with official interest rates, I expect another generous reduction to be handed out; probably 1%; but certainly at least 0.75%.
One of the secrets of property investing is not to buy into up-market or highly expensive developments. Medium priced projects offer much greater potential for stable tenancies and percentage capital gains.
Our stocklist includes some fine examples in Queensland, Brisbane and the Gold Coast.
We believe the Gold Coast has exceptional potential and still looks cheap, but some clients find the Gold Coast a little above budget, so we have spent time sourcing some wonderful opportunities further north.
We have unearthed some fantastic opportunities in Northern Queensland – Cairns, Townsville and Hervey Bay – all with affordable prices, generous rental yields and the potential for serious capital growth.
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
@ $430 p/wk = Better Than 5% Rental Return
4 beds | 2 1/2 Baths | 2 Cars
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Features of this property:
A short stroll along the internal road to resort styled facilities include:
The desirability of this development includes the opportunity to cross a road and spend an hour or so on fantastic (and popular) walkways, boardwalks and bikeways that circle Lake Orr. Add to this being smack bang in the midst of the employment precincts of Varsity Lakes & the Robina CBD; one could almost justify leaving the car in the garage!
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!
Residential Real Estate Prices To Drop By Up To 40%; According To Some!
A History Lesson…
The worst excesses I have seen in the residential housing market was the selling of overpriced property through the 1990’s. Many people have heard of Two Tiered Marketing… where interstate and overseas investors paid a different price to what the locals were paying.
This practice came about as a result of greedy developers flooding markets, in particular the Gold Coast with more property than there was demand for. Driven by profit, rather than demand, the result was a massive oversupply of coastal high rises and Surfers Paradise became Renters Paradise. The law of supply and demand ensured that rents fell encouraging many disgruntled vendors to sell.
RP Data – Rismark Property Value Index Release
Released 01 October 2008
The national end of month property indices report released today by RP Data & Rismark International confirms that the supply and demand imbalance currently being experienced in the Australian property market has placed a floor under housing prices, resulting in minimal value falls.
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