Last year I had a great year as a property investor.
Not because the real estate markets went gangbusters - although they more than held there own where I was investing - but because about a year ago I made it a personal goal to pay attention to fewer things.
Fewer forecasts, fewer predictions, fewer breaking news headlines.
It's been wonderful and it made a world of difference to me as an investor.
First, a story about why I did this.
You see…about a year ago I sat down with a group of my high net worth clients (some of them very, very successful investors) to talk about the year ahead in the property market.
And virtually every one of them was nervous.
Back then the media was already full of negative messages – the property markets were tumbling (or so they said - but that didn't happen everywhere did it?), negative gearing was going to be removed (but didn't happen did it?), the economy was slowing down and there were fears of a recession and house prices were still unaffordable.
Then there was talk of how Trump was treating China’s which could throw our economy into recession, the European economy being a basket case and overseas markets were in turmoil etc., etc.
Yet, despite all these concerns, Australia’s economy performed better than most other developed nations buoyed by solid population growth, historically low interest rates and while the value of many properties fell, especially in Sydney and Melbourne, the value of properties in certain locations more than held their own and in fact rose.
Over the year I completed and another property development that I've retained and which are giving me significant cash flow and in which I'd "manufactured" significant equity.
Just in case you hadn’t worked it out yet…
There is very little correlation between all the commentator’s forecasts and what the market actually does.
It's what we call "noise".
As we head forward into another year, you are about to be flooded with predictions about what to expect in 2020.
And this year they are likely to be very mixed - from a reasonable year ahead for property with the markets regaining most of their lost ground, to a terrible year with property values crashing!
I urge you to take them with a grain of salt.
Be very careful who you listen to, because this year is likely to be a very, very different year in property.
Here are three specific things you should consider:
I'm planning to continue to be an investor for the next three decades, at least.
You might be older or younger and have a different time horizon.
Most of those commentating on what to do in property have a completely different time horizon than either of us.
Saying "You should buy in this booming location" might be rational for one person, and totally bonkers for another.
We all have different goals, risk tolerances, and time horizons.
The best reason you should stop paying attention to media predictions and guidance is because the guy writing on line has no idea who you are, how old you are, how much you make, or what your bills might be.
Once you come to terms with this, you realise that the majority of predictions made by the media are probably not relevant to you.
People can't stand the idea that markets are random and unexplainable in the short run, so they try to attach meaning to every event.
Instead of reading explanations of what the property market is doing, I pay attention to what the market is doing in a historical context.
- Also read:Latest property price forecasts for 2024 revealed. What’s ahead in our housing markets in the next year or two?
- Also read:Here’s how to avoid these 12 common reasons property investors fail to build a Multi Million Dollar Property Portfolio
- Also read:Sydney property market forecast for 2024
- Also read:Boom to bust: What makes property prices rise and fall
- Also read:This week’s Australian Property Market Update – Latest Data, State by State November 28th, 2023
I’ve invested for well over 40 years now and I’ve paid the market a hefty learning fee.
As I said, this year the market will be very different.
How do I know?
Because I’ve lived and invested through more than 6 property cycles and while the cycles seem to be getting shorter the lessons are the same.
However today we get reports on daily house price index movements, weekly auction clearance rates, monthly changes in property values.
Trying to explain these short-term market moves gives us the impression that we can predict the future, which we can't.
Looking at market moves in historical context reminds us to keep things in perspective and ignore the noise, which we can.
Psychologist Philip Tetlock studies the science of forecasts.
One of his best findings is that analysts who are the most confident about their predictions have some of the worst track records, while those with the best are always questioning their beliefs.
The media love confidence and hate timidity, so the guy who yells the loudest gets the most attention.
Which explains another of Tetlock's findings:
Analysts with the highest media profiles have some of the worst track records.
I don’t know if you’ve noticed – it’s much the same here in Australia.
Look at what happened to all the predictions of those hot spots a few years ago and the year before and the year before that.
The landscape is littered with real estate casualties – where the value of some properties hardly rose in the last 7 years and others fell significantly.
And look at what happened to the predictions of all the property pessimists who keep warning our property markets are going to crash.
Instead of paying attention to strong, loud opinions, I suggest you give more weight to those who talk about why they could be wrong, what they've learned from past mistakes, and those who think in probabilities rather than certainties.
They are less entertaining, but more likely to offer good advice.
I’m going to share the lesson I learned, the mistakes I made and the successes I’ve had in my 40 years of property investment at my only round of national property seminars in 3 capital cities in March and April this year.
And I have organised a panel of experts including Dr. Andrew Wilson, Australia’s leading Property Economist, and Ken Raiss, director of Metropole Wealth Advisory to give you their unfiltered and unedited analysis of where we are heading as a country and how that will affect you, your family, your business and your real estate investments.
Click here now and get all the details and reserve your place.
The Rules of Property will be very, very different this year...but the grey hair, or no hair of our presenters proves a point - we've seen it all before.
If you had attended my seminars last year or the year before - and more importantly if you would have taken the correct action - you would now be sitting feeling pretty smug.
By the way…since I have no properties for sale, it’s always been easy to give independent unbiased facts about what’s going on.
Please remember, the future is coming and it looks nothing like the past few years.
We can't wilfully ignore the changes, but for those at this event, we will sure discover how to prosper in the next few years.
See you there - just click here now get all the details and reserve your spot and a FREE spot for a friend.