Saturday Summary – the most interesting property investment articles I’ve read this week (2014/03/01)

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.

Property Investors Get Duped: Tax Fraud Scam On Rise

Your Investment Property reports that the NSW Fair Trading Minister Stuart Ayres has issued a warning regarding tax scams in which property owners are duped into giving out their details, which are then used by scammers to assume the identity of the owners and sell or re-mortgage their property.

Ayres said the scam letter offers landlords living overseas the opportunity to claim a tax exemption on rental incomes.

“The scam email advises agencies of managing landlords to forward forms to them to complete and return to the scammer,” he said. “The forms require detailed personal information as well as photocopies of passports and mortgage account numbers.”

Peter Cutajar, legal counsel for insurer First Title, said recent years have seen an upsurge in this kind of property fraud – much of which goes unreported.

“There’s certainly been an increase. There are organised crime groups now involved in this whereas before it was much more disorganised,” said Cutajar.

“When there’s a bank involved they’ll often settle without it being reported because obviously this kind of thing could cause some reputational damage for the bank.”

In a recent example in Perth, scammers made off with nearly $500,000 after selling a defrauded property.

 

Busting Harry Dent’s Property Bubble | Population growth areas | Property Options

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:
Rob Balanda explains the difference between taking an option on a property and having the first right of refusal
Harry Dent will explain more about the property market bubble while we also seek the opinion of two other learned gentlemen Frank Gelber from BIS Schrapnel and Michael Yardney
Michael Matusik talks about areas around the nation that record in excess of 1,000 new residents a year

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.

Are we in for a recession?  – Pete Wargent

With all the talk of property bubbles and recessions regular Property Update expert Pete Wargent’s gave his thoughts on the economy with lots of statistics and graphs in his Escape the Rat Race blog here.

He concludes:

Looks like the recession will just have to wait a while

Is Harry Dent’s Bubble full of hot air?

Property Guru John McGrath joins the local experts who poo pah US based Harry Dent’s predictions of an Australian property bubble that is about to burst.

In his regular Switzer column he gives a few reasons why Australian property prices will stay strong – both now and into the future:

1. The Great Australian Dream of home ownership lives on.
Sure, many Gen Ys don’t want to tread the traditional path of buying a first home on the outskirts – instead they’re investing there just to get a start in the market.  It’s the shape of the dream that’s changing, not the dream itself.

2. We have a tax system that supports investment. Negative gearing, depreciation and so on.
When the market cycle hits bottom, it’s the investors that pick it back up while yields are high. It happens in every cycle and right now, 1 in 2 buyers in NSW and around 1 in 3 buyers in other states are investors.

3. Dent argues a China bust would hurt our property market.
Sure it would. But it won’t be the catastrophic event he predicts. We’re already going through a mining investment slow down because China isn’t buying as much.
And we’ve got record low interest rates and an RBA jawboning to get the dollar low enough for other sectors of the economy to fill the void.
This is a world class economy and we’re preparing for imminent changes.

4. Sydney is a huge international city.
Sure, real estate is expensive but it’s not impossible, there are still plenty of opportunities.
And when it does get tough, markets evolve. Undesirable areas undergo change and gentrification – look at Redfern in Sydney.
People adapt!

5. Dent specifically points out that coastal real estate markets are the most in danger.
Australia has an aging population and we’re going to see great growth in coastal locations over the next 20 years as more seniors take up the traditional Aussie dream of retiring on the coast.

6. The ability to buy real estate through self-managed super funds has opened up a whole new market for Australian property.
This trend is only just getting going and it will encourage more investment in real estate well into the future.

7. Chinese interest in Australian real estate is rising. It’s going to be a key influencer in our prestige market recovery with plenty of room left to run given China’s burgeoning middle upper class.

The worst thing scaremongering can do is scare people away from great opportunities. History tells us there is no reason to doubt the tenacity of our property market following its outstanding long term performance.  Stick to your game plan!

Australia’s property market is worth $5 trillion

News.com.au  report that data released by the Australian Bureau of Statistics showed the total value of residential property in Australia hit five trillion dollars for the first time in the December quarter.[sam id=41 codes=’true’]

The statistics show the value of residential properties rose to $5.02 trillion in the December quarter, up from $4.83 trillion in the September quarter.

They also show that the average price of Australia’s 9.3 million residential properties is now $539,400, up from $496,800 in the December quarter 2012.

Chinese money is driving a housing glut

Business Spectator suggests that when you buy residential real estate in inner city and suburban areas in Sydney and Melbourne where Chinese buyers are active, the price is often 10 or 20 per cent higher than ‘non-Chinese’ areas.

They say:

Behind that difference are call-centre engine rooms creating strong demand. It is also a market that carries hidden dangers.

One of the potential problems is that the Chinese developers concentrate their efforts in smaller geographical areas of Sydney and Melbourne, where they are building a vast number of one and two-bedroom apartments. There is a good market for these apartments, but they have limited appeal once a couple begins to have children.

I can feel a looming glut.

 

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’s Happening To The Luxury End Of The Property Market – Chris Joye

[Video] The latest property news with Kevin Turner | 26th February

Some of the many mistakes I’ve made in the last 17 years of investing. – Pete Wargent

18 Things Happy People Avoid Doing

Michael Matusik’s Summary Of What’s News In Property This Week

1,000 reasons why Brisbane has entered the next phase of the property cycle. [infographic]

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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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