Saturday Summary – the most interesting articles I’ve read this week (2014/08/09)

There are more interesting articles, commentaries and analyst reports on the Web every week than anyone could read in a month.

Each Saturday morning I like to share some of the ones I’ve read during the week.

Enjoy your weekend…and please forward to your friends by clicking a social link buttons on the left.

The Hard Truth: Successful Investing Involves a Lot of Luck

Morgan Housel writes in Motley Fool that of all the traits needed for success — hard work, intelligence, creativity — the most overlooked is luck.

Now that’s interesting isn’t it? He explains:

Bill Gates went to one of the only high schools in the United States that had a computer. Warren Buffett was born in a capitalist country.

Donald Trump had a wealthy father. All of these guys earned their success, but in slightly different circumstances outside of their control, things could have turned out far differently.

To put it another way: People with just as much ambition and intelligence are broke nobodies only because they were born in a different time and place.

The best and worst property advice | The ‘Cash Flow Kid’ | Asking Prices

Another great Real Estate Talk show  produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show.

Details of this week’s show:
Nathan Birch tells a remarkable story about starting his investment journey at 13
I tell you the best and worst advice I’ve ever received about property investment
Cate Bakos might have the answer to why agents list properties with no price

You should definitely subscribe to this weekly audio program. Click here. It’s free and you can listen on the go on your smartphone, iPad etc.

Credit growth up to near 6 year high

In his blog regular Property Update Blogger Pete Wargent discussed another marker of the strength of our property markets quoting the Reserve Bank Financial Aggregates which showed credit growth of 5.1 percent for the past year, the highest rate of credit growth half a decade.

Pete explains:

In terms of percentage credit growth, there was a good deal of excitement back in 2012 about the lowest growth rates on record which could stymie any housing market recovery.

What this commentary overlooked, apart from the fact that as we’re coming from a higher base lower credit growth than times past is inevitable, was the role of cash buyers, overseas buyers and most importantly of all the lag effect of interest rate cuts.

When the effects of rate cuts gradually started to flow through, house prices started rising and now too are transaction levels, building approvals, dwelling commencements, construction activity and building work done.

Housing credit growth is now rising strongly for owner occupiers and even more strongly for investors.

National housing sentiment 2014

Realestate.com.au recently conducted their 2014 National Housing Sentiment Survey and found the financial position of Australians has improved in the past six months,

It shows 60% of Australians believe their household savings are in a better position now than they were in 2012.

Gen Y is more positive about their finances than other generations – but they are getting some help from mum and dad, with 16% offered financial assistance to buy their first or next property.

Overall, Australians are feeling less positive about housing affordability this year than in 2013, with 63% saying affordability had deteriorated and 59% expecting this to continue.

But we’re not letting our home ownership dreams hamper our love of travel. HASI shows 77% of home owners who were hoping to buy another property also wanted to travel overseas in the next five years.

HASI tests Australians sentiment towards housing affordability by measuring four key areas which impact attitudes towards the property market. These are:

  • Experience of financial position
  • Experience of affordability
  • Outlook on financial position
  • Outlook on affordability

The mean (or average) ratings across these areas is used to calculate the index.

This year’s results show sentiment towards housing affordability has returned to 2012 levels.

Japan is a demographic downward spiral.

As a property investor you’d understand the importance of a growing and wealthy population on our economy and property markets.

The Economist writes that Japan is heading in the opposite direction – it is in a downward demographic spiral:

Last year just over 1million babies were born, far fewer than the number needed to maintain the population, which is expected to drop from 127m to around 87m by 2060. Why are young Japanese so loth to procreate?

The spiral of demographic decline is spinning faster as the number of women of child-bearing age falls. In May a report predicted that 500 or more towns across the country will disappear by around 2040 as young women migrate to bigger cities.

The workforce is already shrinking, imperiling future growth. In recent years governments have embarked on a plethora of schemes to encourage childbearing, including a “women’s handbook” to educate young females on the high and low points of their fertility, and state-sponsored matchmaking events.

Fun weekend video: The Test

Enjoy this fun video and test your observation skills. I watched it a few times and I’m still not sure I understand what went on.

10 Things Smart People Don’t Do.

According to Lifehack.com, “smart people” have a lot of traits in common including the fact that they definitely do not do these 10 things:

  1. They don’t let past stumbles dictate their present state.
  2. They don’t focus on the negative.
  3. They don’t run from their problems.
  4. They don’t worry about what other people think about them.
  5. They don’t waste time.
  6. They don’t expect instant gratification.
  7. They don’t focus on things that are out of their control.
  8. They don’t spend time with people who bring them down.
  9. They don’t display arrogance.
  10. They don’t go a day without giving thanks.

Blogs you may have missed this week:

If you didn’t have a chance to read my daily blog, here’s a list of some of the blogs you missed this week:

How wealthy is the average Australian?

The importance of the final inspection

It’s a good time to look at fixed rates | Jane Slack-Smith

How to find the next property hot spot

Interstate movements remain at low levels

It’s a matter of building confidence



Want more of this type of information?


About

Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's been once agin been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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