Saturday Summary – the most interesting property investment articles I’ve read this week (2013/05/11)

There are more property investment 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 interesting 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.

Metropolitan vs country property investment risks

Regular Property Update blogger Peter Wargent writes  the reason he prefers metropolitan property investments to regional real estate can be summed up in one word – RISK

If you pick a hot regional market or mining town to invest in you might do well in the short-term.

Property is not a short-term investment, however, and you should aim to own property in markets with a diversified range of industries and forms of employment. There is absolutely no point in picking a market which is hot for 6 months while a mine is being constructed if prices then ease again immediately thereafter.

Property is a long-term investment and you need to own quality, desirable properties where the population and demand is growing rapidly but the supply of land for release is constrained.

If you speculate in cheap regional markets at today’s elevated levels of leverage, you are introducing  a significant risk – in my opinion.

 

How to make money in today’s property market!

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:
Michael Matusik explains a bit about where we are in the property cycle
Louis Christopher from SQM Research says it is not always possible to make money in this market.
Ken Raiss from Chan & Naylor takes a conservative view on making money
Michael Yardney for Metropole Property Strategists says that many investors misunderstand the rule of ‘you will make money when you buy a property’.

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.

 

10 Melbourne Markets That Haven’t Grown In A Decade

Considering how well the Melbourne property market has performed over the last decade it probably surprised some readers when Your Investment Property Magazine points out that a number of well-known suburbs failed to grow over the last decade.

Suburb

Average Annual Growth rate

POINT COOK (U)

-1.1%

SOUTHBANK (H)

0.3%

WOLLERT (H)

1.0%

PARKVILLE (H)

1.1%

PRINCES HILL (H)

1.5%

SOUTHBANK (H)

1.9%

DOCKLANDS (U)

2.2%

SEDDON (U)

2.3%

CARLTON (U)

2.4%

KEILOR DOWNS (U)

2.5

 

They say:

An average annual growth rate of less than roughly 3% can often mean that price growth has underscored inflation and that property prices have actually fallen in real terms.

For Western Melbourne’s Point Cook, the figures show a market that continues to struggle. The suburb is the only unit market in all of Melbourne to record a negative average annual growth rate, suggesting there is limited demand for properties there.

Median unit prices in the suburb are also lower today than they were in 2002, at their peak price point, and lower than the median unit price in 1999.

Owing to the huge supply, or rather, oversupply, of properties that came onto the market during Melbourne property’s last boom in 2009/10, it is also no surprise that the areas that saw the largest portion of development – Docklands and Southbank – have also remained flat.

 

The five things the real estate industry doesn’t want you to know

Barry Goldman of Leda Real Estate shares 5 real estate industry myths in Property Observer:

1. Winter and Xmas are not good times to sell your house.

In today’s digital world anytime is a good time to sell as there are buyers in the market all the time. The best time to sell your house is when you need or want to sell your house.

2. The agent knows the best time to open your property for inspection.

Most commonly the key driver to recommended open house times is simply what fits neatly into the real estate agent’s schedule, and is not defined by what is the best time for the client to showcase their property to best effect.

3. The best way to sell your home is by auction.

You can quite often achieve a very good result from auction, but to take the position that many agents do – that every property should go to auction – is ridiculous.

4. Only agents know the market value of your home.

The last decade has seen many new avenues open up to sellers, where information that used to be only available to the industry is now available to all. Today, anyone with access to the internet can find out the sales details of a property sold in their area, and get a very good feel for the market and sales expectations.

5. The more you spend on marketing costs the better the sale price.

There is no question that the marketing of a property is crucial, but the marketing spend that goes into inefficient advertising channels will not result in a better sales price. In this day and age, spending marketing dollars in newspaper classified advertising needs to be seriously questioned if recommended by an agent. Much of these advertisements include significant branding for the real estate agency, and we know that 87% of all potential buyers are actively searching online.

 

What’s the most common job in Australia?

Who do you think is the real face of the Australian workforce?

According to the official figures reported in news.com it’s retail sales workers who have the most common job in Australia.

Census data shows there are 556,403 retail sales workers in the country. 68% of them are female.

But what’s life like for our most common worker?

Australian Bureau of Statistics data shows sales assistants earn $421.60 a week on average.

For full time employees, of which there are just 172,441 (or 31 per cent of all retail sales workers), the most lucrative job is in motor vehicle sales, with an average yearly earning of $68,260.40.

This is followed by computing and telecommunications sales persons on $52,780, checkout operators and office cashiers on $43,482.40, and general sales assistants on $42,962.40.

 

Some of the most ridiculous start up ideas that eventually became successful

Quora ran an inserting blog a while ago.

They featured some great startup enterprises that were the result of ideas that would have seemed ridiculous if you had heard them prior to seeing them working.

Ask yourself, if you were a venture capitalist pitched one of these ideas, what would your reaction have been?

  • Facebook – the world needs yet another Myspace or Friendster except several years late. We’ll only open it up to a few thousand overworked, anti-social, Ivy Leaguers. Everyone else will then join since Harvard students are so cool.
  • Dropbox – we are going to build a file sharing and syncing solution when the market has a dozen of them that no one uses, supported by big companies like Microsoft. It will only do one thing well, and you’ll have to move all of your content to use it.
  • Amazon – we’ll sell books online, even though users are still scared to use credit cards on the web. Their shipping costs will eat up any money they save. They’ll do it for the convenience, even though they have to wait a week for the book.
  • Virgin Atlantic – airlines are cool. Let’s start one. How hard could it be? We’ll differentiate with a funny safety video and by not being a**holes.
  • iOS – a brand new operating system that doesn’t run a single one of the millions of applications that have been developed for Mac OS, Windows, or Linux. Only Apple can build apps for it. It won’t have cut and paste.
  • Google – we are building the world’s 20th search engine at a time when most of the others have been abandoned as being commoditized money losers. We’ll strip out all of the ad-supported news and portal features so you won’t be distracted from using the free search stuff.
  • Github – software engineers will pay monthly fees for the rest of their lives in order to create free software out of other free software!
  • PayPal – people will use their insecure AOL and Yahoo email addresses to pay each other real money, backed by a non-bank with a cute name run by 20-somethings.
  • LinkedIn – how about a professional social network, aimed at busy 30- and 40-somethings. They will use it once every 5 years when they go job searching.
  • Firefox – we are going to build a better web browser, even though 90% of the world’s computers already have a free one built in. One guy will do most of the work.
  • Twitter – it is like email, SMS, or RSS. Except it does a lot less. It will be used mostly by geeks at first, followed by Britney Spears and Charlie Sheen.

 

Blogs you may have missed this week:

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

This week’s property market trends | RPData

The unfortunate truth about investing

5 great habits property investors can learn from Warren Buffett

The Diffusion of Innovations & what it means for property investors

RBA paves the way for steadier dwelling price growth

Want to change?

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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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