Today I’d like to share my thoughts on how the property markets are changing and give you some ideas of how to make the most of the new property cycle that’s unraveling in front of our eyes.
This message is timely for you if you’re:
- A beginner to property investing and not sure where to start but you don’t want to make the same mistakes most beginners make.
- An established property investor, but you’re stuck and not sure how to move to the next level.
- An experienced property investor who wants to use property renovations or development to take your investment to the next level.
- You’re an investor who understands the importance of capital growth but also wants strong cash flow to support your property portfolio.
You’d have to be living under a rock not to realise that we’ve moved into a new phase of the property cycle.
The fact is … “a rising tide lifts all ships”.
Most properties increased in value over the last few years, yet some investors learned the hard way how a select group of properties increased in value much, much, more than others.
Another saying (from Warren Buffet) is: “When the tide goes out you see who’s swimming naked.”
I guess what I’m getting at here is that over the next few years we can’t expect our property markets to perform as strongly as they have in the past few years.
This means as some sectors of property falter, those investors with the wrong strategy, the wrong properties or who aren’t prepared, will be caught with their pants down.
The type of growth we have experienced over the last few years, especially in Melbourne and Sydney, and to a lesser extent in other capital cities, is unsustainable.
You can’t have ongoing double-digit capital growth with inflation under 3% and interest rates as low as they are.
That is just setting ourselves up for a property crash.
In fact the latest figures released by CoreLogic show how fragmented our property markets are.
Across the capital cities, the month-on-month results ranged from a 2.4% rise in Melbourne dwelling values, through to a 1.9% fall in values across the Hobart market.
And the largest and most expensive capital city housing market, Sydney, posted a month-on-month gain of just 0.1% in September.
Of course there is not one “property market” in Australia, nor is the one property market in Melbourne, Sydney or any other big city.
So when the stats come in showing there is minimal capital growth, that takes into account those suburbs they have high growth yet the overall average is dragged down by suburbs where property values are dropping.
I would describe their property markets as follows:
It’s a bit like me putting one hand in a bucket of cold water and the other hand in a bucket of hot water and saying on average I feel comfortable.
There are still some hot segments of the property market and some areas where prices are falling.
And I see the fragmentation of our markets increasing even more over the coming year.
Clearly this means that property investors can’t buy just any property.
You’ve probably heard me say that less than 5% of the 350,000 or so properties for sale in Australia at present are “investment-grade properties.”
I’d suggest that this figure has dropped and less than 1% of stock on the market is “investment grade” – the type of property that will give you wealth producing rates of returns in the medium to long term.
This is creating interesting times with strong competition for certain types of property and one of the reason certain sectors of the market are still strong.
The recent property boom also created a whole new generation of new property investors, but if history repeats itself as it most certainly will, many of them will fail.
Many are buying the wrong properties, or the types of properties that will suffer the most when interest rates rise.
On the other hand…
This is a time of great opportunity for other investors…
Especially for those who know how to use the techniques of property renovations and development to “manufacture” capital growth and rental returns.
You can’t expect the market to do the heavy lifting for you anymore, that’s why you have to use advanced techniques such as renovation or development to create your own capital growth and strong cash flow.
And that’s why I am extremely excited about this year’s Property Development & Renovations Workshop, which I’m holding in October.
It’s where I’ll show you “real world” methods that work – not Reality TV methods that look good but lose money.
My team at Metropole are currently involved in over 50 residential development projects, and last year alone our renovations team completed 73 renovations.
This is what I call “real world” knowledge
These are the people who will be teaching you what really works, as opposed to what they show you on reality TV.
I also want to extend my personal invitation to you to join us and meet the best line-up of real estate experts ever assembled for an advanced property conference in Australia.
My workshop is Australia’s longest running 3 day property workshop.
This is a training event – NOT a sales event – that’s why it comes with a proven 13 year history and my personal money back guarantee.
This is your opportunity to spend 3 days with some of the sharpest minds in property in Australia today.
It’s a chance to learn from a faculty of experts who have been successfully involved in property renovations and development for over 25 years.
As I was starting to explain…
The current property environment means a group of smart investors will move to new levels by having better skills, unique strategies and intelligent planning.
I think that the current market will give some investors the opportunity to move up to the next level and become an active participant in their property investments creating their own capital growth and positive cash flow.
It’s a time for learning and growth and a time to re-invent your real estate investment techniques.
It will give smart investors a chance to take advantage of the next phase of the property cycle.
After joining us at this workshop you will come out knowing exactly what works in the current property investment environment….
We’ll show you what to buy and where as well as how to add value and manufacture capital growth and rental through property renovations and development.
Over the last 13 years I’ve spoken to investors who wanted to join us at my Property Development & Renovations Workshop recognizing it’s Australia’s leading real estate training, yet they’ve put it off and said – “I’ll go next year”.
Well this year is the year you should come to our workshop.
We won’t be running this again for another 12 months.
Please click here to find out all about this year’s workshop, learn how others have benefited and read my personal money back guarantee.
Joining us the weekend after will give you the opportunity to boost your investment property portfolio and take advantage of the advanced techniques such as property renovations and development as well as intelligent use of options to enable you to achieve strong cash flow from your investment properties, so there’s never been a better time to hold our annual workshop.
At my Property Development & Renovations Workshop you will be exposed to the best minds in real estate.
You will hear from people who are actively involved in the real estate market for a living and who have successfully completed hundreds of property development and renovation projects.
This is not a time to listen to theorists; you need “Real World” advice.
You’ll also hear about advanced tax strategies for Australia’s top property tax accountants and legal aspects from a top property lawyer.
Start right now – click here NOW to check out more details and grab one of the last few discounted early bird spot.
But please give yourself the chance to assess this opportunity properly – it will take about 10 minutes to read all the information.
Also published on Medium.