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.
So enjoy for some weekend reading…and please forward to your friends by clicking the social link buttons on the left.
The property predictions that never came true
Ever noticed property hounds love to gaze into crystal balls?
Not surprising, perhaps, given the very concept of buying property to build wealth does require future thinking.
However, not every forecast is – or was – on the money.
And sometimes a scary-sounding prediction can affect change that is, arguably, positive.
Running out of land
Remember the choke-on-your-crumpet headline “Home sites ‘will run out in 1990’”?
It ran in The Age on July 23, 1975.
The bold prediction was based on reports by Victoria’s (now-disbanded) Town and Country Planning Board, in which the board forecast Melbourne would run out of developable land within 15 years as the city had only 38,500 ha left … apparently it needed 23,000 more to keep up with population growth.
The board recommended the state “open up” new urban corridors in Berwick, Cranbourne, Langwarrin, Pakenham, Plenty, Carrum Downs and Werribee. Guess what?
The government of the day agreed, removed a development freeze on the land, and the city’s footprint spread deep into the southeast, north and west.
Housing prices to nosedive
Jump forward 24 years to 1999.
As the 20th century neared its end including one of its most epic prediction fails … (did anyone see a Y2K bug?) … the property sector dined on one of its most high-profile forecast fails.
Back in November 2008, as the property market recoiled from the global financial crisis, University of Western Sydney associate professor of economics and finance, Steve Keen and Macquarie Group interest rate strategist Rory Robertson made a bet based on Keen’s claim house prices would fall by 40%.
Well, housing prices didn’t nosedive as Keen – known as “The Merchant of Gloom” – had predicted.
In fact they rebounded.
Keen, the prediction bet loser, had to walk 200km from Canberra to Mount Kosciuszko wearing a shirt printed “I was hopelessly wrong on house prices! Ask me how”. (Image source: www.abc.net.au)
Overseas analysts’ lack of faith
It seems there are plenty of offshore hounds happy to foresee an almighty collapse of the value of Down Under dirt.
Do you remember US self-claimed real estate analyst Jordan Wirsz predicting Aussie home prices would fall by 60% in early 2012?
What about US property-market commentator Harry Dent who – in February 2014 – forecast a 30%-50% fall in Australian housing prices within a year or two?
Their big bust claims were reported in Australian newspapers and online property market sites at the time, and widely rebuked by local market observers.
Sell your property on your own | Negotiation tips | Prepare for the worst | Our “World Cities” | Get a foot on the property ladder
Another great Real Estate Talk show produced by Kevin Turner.
If you don’t already subscribe to this excellent weekly Internet based radio show do so now by clicking here.
Details of this week’s show:
- Michael Yardney reminds you to prepare for the worst, while hoping for the best – in other words maximise your upside while at the same time covering your downside
- Shayle Woods shares her experience and has some tips on what to do and what not not to do if you decide to go it alone
- Shannon Davis has some more negotiation tips and outstanding advice if you don’t want to pay too much for your next property purchase
- Greville Pabst joins us to say that he is not concerned about the potential for an oversupply of units in Australia
- Cohen Handler take a look at some market trends and we set out to bust some popular beliefs
- Nicole Haddow talks about how difficult it is for your people to get a foot on the property ladder
EOFY stock fizzle
Pete Wargent rounds up the EOFY with this stock market summary.
We capped off the June 30, 2015 end of financial year yesterday, and in truth FY2015 proved to be a bit of a fizzer for generic stock market returns.
It had looked at one stage through the third quarter as though the ASX 200 would breach the 6,000 level, leading to a strong year for share markets.
It was not to be in the end, with the final quarter of the financial year see a dismal correction of well over 7 per cent.
The index therefore finished the financial year just 1.2 per cent higher than where it began it.
Over the past decade the index is 27.6 per cent higher, with some serious volatility along the way.
Vacancy rates hit a six-year high in Perth
Smart Property Investor writes that Perth investors may struggle to secure quality tenants, with properties becoming harder and harder to rent.
According to data released by the Real Estate Institute of WA, the vacancy rate for rental accommodation across Perth reached 4.9 per cent in the three months to May.
That compared to a rate of 4.2 per cent for the June 2014 quarter and 3.2 per cent for the June 2013 quarter.
There are currently 8,147 homes looking for tenants – a 39.9 per cent increase on the 5,824 vacancies in the June 2014 quarter.
REIWA president David Airey said the oversupply had been created by a slowdown in population growth and a significant amount of newly constructed dwellings coming to completion.
“The competition among property owners is having an effect on price, with the metropolitan median rent dropping by $5 on the March quarter to $425 per week, which represents a cut of $25 on the same time last year,” he said.
Perth’s median rent peaked at $475 per week in the middle of 2013, but has since fallen by $50, or around 10 per cent.
According to Mr Airey, the long-term equilibrium ofPerth’s vacancy rate is 3 per cent, meaning the current rate signifies about 60 per cent more properties on the market than usual.
Mr Airey called on landlords to ensure properties were well presented and priced right to meet the market.
“Owners need to be realistic about the current market in order to attract and maintain good tenants,” he said
Weekend Video: Sad Cat Diary – A hilarious diary of the ‘tough’ life of our pampered pets
This is an oldie but a goodie! Anyone who is lucky enough to own a fur-baby can relate to this video!
Blogs you may have missed this week: