Saturday Summary – the most interesting property investment articles I’ve read this week (2014/02/01)

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.

John McGrath’s 7 rules of property investment

Property Observer recently summarised real estate guru John McGrath’s rules of property investment. There’s some great advice here:

1. Have a plan and be disciplined in your approach

2. Research, research, research

“Make sure you know more information than anyone else on the planet about properties that fall into your plan.”

3.  Adopt a capital growth strategy

“I recommend you focus more on capital growth. The yield is important, it needs to pay the mortgage but for me the capital growth is where you’re going to get the best bang for buck.”

4. Location, position, aspect

‘It’s not only location but position and aspect.”

5.  Don’t focus on bargains – they rarely have a future

“… I get scared when a friend calls up and says ‘I bought this great bargain today’. I say ‘my god where is it’. I’d much rather you said ‘I went to an auction and I bid against 12 other people and I paid a little bit more than I thought I might have to but I bought a great home in a great street. That makes me a lot happier.”

6. Utilise the power of leverage but never overstretch

7.  Buy hold and keep buying

 

What’s ahead for 2014 | Granny Flats | Renovation trends | A Super scam

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:
Cherie Barber takes a look at what the reno trends will be this year
Alastair Walsh gives you the top four reasons for and against granny-flats
Michael Teys tells us the main offenders and the risks unit buyers subject themselves to without much protection
Ken Raiss, discloses some detail about a super scam that involves 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.

 

Brisbane To Outshine Other Capitals In 2014

Raine & Horne Queensland general manager Steve Worrad was quoted in Your Investment Property Magazine suggesting Brisbane is well-placed to be the strongest capital city property market in 2014 after trailing growth in Sydney and Melbourne last year. He said:

“ Activity in Brisbane is already up 25% in some areas compared with the same time last year.[sam id=36 codes=’true’]

It’s on the basis of tight supply and growing demand that we expect property values in Brisbane to grow by 7%, and more in some cases, during 2014.”

Demand for Brisbane property is being driven by investors, and empty-nesters shifting from interstate.

Property prices in the southern capitals enjoyed a robust 2013, with the median house price in Sydney, for example, between $665,000 and $712,000 depending on who you listen to, while the median house price in Brisbane is an affordable $445,000.

This gives Sydney retirees, especially, scope to sell a family home tax-free, and make a lifestyle shift to Brisbane and add the difference to their retirement savings.

Whether they’re working the mines in Western Australia or on an investment banking desk in Sydney, Brisbane’s lifestyle and affordable property prices will attract more fly-in fly-out workers in 2014,”

Pete Wargent’s  gives 3 reasons the Reserve Bank can’t overlook the inflation genie

The other day regular Property Update blogger Pete Wargent explained how the recent rise in inflation could affect the RBA’s thinking on what should happen to interest rates. It’s an interesting blog worth reading, which he summarises:

Of course, housing markets, and particularly dwelling construction, will be one element considered by the Reserve Bank at its meetings in 2014. Further, the financial crisis has shown the Central Banks would be foolish to turn a blind eye to asset price bubbles in order to concentrate solely on an inflation target.

If you take a read of the Minutes of a Monetary Policy meeting, you will see that a broad range of issues are considered under the broad headings of International Economic Conditions, Domestic Economic Conditions and Financial Markets.

An inflation targeting Reserve Bank must consider the current and future trajectory of the inflation rate, and therefore if we have another strong core inflation print on 23 April, one would have to assume that the top of the inflation target band would be in danger (the most recent prints are following an upwards trend) and therefore interest rate hikes may follow.

It will be interesting to see how 2014 pans out. Future markets seem torn, and on balance, suggest that perhaps a cash rate stick at a generational low of 2.50% is the most likely outcome for some time to come yet.

 

Australian banks rush to lend $28.7 billion to Chinese borrower

The Sydney Morning Herald reports:

Australian banks’ lending to Chinese borrowers has soared by 75 per cent in a year, as the industry rushes to lift its exposure to Asia’s powerhouse economy.

The value of loans to Chinese borrowers on the books of Australian banks swelled by $US12.3 billion to $US28.7 billion during the year to September, figures from the Bank for International Settlements show.

China now rivals Singapore as a key foreign market for Australian bank loans, trailing only New Zealand, Britain and the US.

Hong Kong – a critical gateway for institutional lending into China – is also playing an increasingly important role, with exposure of $US20 billion.

The rapid growth is occurring as domestic banks eye Asian customers – primarily institutional borrowers – as a growing source of future profits.

ANZ has been the most aggressive in its regional expansion, setting the goal of obtaining 25 to 30 per cent of its profits from overseas, mainly Asia, by 2017.

But the trend also ties Australia more closely to weaknesses in China’s still-opaque financial system, which have been on full display recently, as regulators try to rein in the country’s enormous shadow banking system.

 

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:

What causes housing markets to boom and bust? – John Lindeman

Here’s why Australian house prices have not corrected yet.- Pete Wargent

Look what’s happening in our capital city property markets – Adelaide

10 reasons your investments could be doing badly

What’s Happening to Property in the Mining Towns? Louis Christopher

What’s next for property prices? They will rise, but not everywhere. Pete Wargent

[post_ender]



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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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