Each Saturday morning I like to share some of the interesting property investment and economic articles I’ve read during the week.
I’ve put them here all in the one place for your easy reading.
Enjoy your weekend….and please forward to your friends by clicking a social link buttons on the left.
Why all the talk about a property bubble: Terry Ryder
It’s interesting how after two years of price decline or stagnation in our major cities, at the first sign of price recovery they’re out there talking up a bubble, say Terry Ryder in an article in Property Observer.
He says the cheapest talk comes from economists speaking about real estate, because supply (endless) is hugely in excess of demand (zero). There’s also a low price on the articles of most journalists about property because the demand is for a David Jones product but most of the supply is coming from Gone Bonkers.
Ryder explains that the trend evident in the figures from various research sources is one of big-city prices now starting to trend north, slowly.
Further to that, a number of forecasters are predicting rising prices in the near future. BIS Shrapnel is tipping growth in all eight state and territory capitals in the next three years, with the strongest to be in Perth, Brisbane, Sydney and Darwin, where the rises are expected to be solid but not spectacular.
National Australia Bank published its survey of Australian property professionals, most of whom are expecting moderate growth in the next 12 months.
So we appear to have a return to price growth, though small, with the prospect of more moderate rises.
But there’s no middle ground with media. It’s either boom or bust. Now it seems even the smallest rise in house prices instantly has the label “bubble” slapped on it. Alternatively, a cut in interest rates gives rise to fears of a bubble.
Ryder says that bubble talk has been around for the past five years. It started when a metropolitan newspaper journalist misquoted RBA governor Glenn Stevens and the mistake was repeated as fact by media outlets around the country. Economists and journalists have been promoting bubble talk ever since, although Stevens never said the words reported. It wasn’t merely a beat-up – it was a lie.
Despite all those dire predictions about a collapse in our home prices since 2007, mostly from publicity-seekers based overseas, the forecast implosion hasn’t happened.
So why are we talking about a bubble now, when capital city prices have barely budged after two years of mediocrity? Because we’re beset with writers and commentators who are shallow, lazy and like the sound of their own voices.
Read the rest of this article here
…..and they said the market would CRASH!
Another great Real Estate Talk show produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show.
This week Michael Yardney sets the record straight on all those experts who said the market would drop by 50 and 60%, Brad Beer explains more about depreciation schedules, Peter Wargent and Michael Matusik pick up on some of the traits of successful investors, Rachael Barnes shares her experience about agents who tell you things that don’t sound right and Tim Lawless tells us the Top 25 Rich suburbs in Australia.
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.
Shares or property – which is a better investment?
It’s a question that is often asked. What performs better? Shares or property?
According to RPData, on a capital appreciation measure over the past decade, the past half-decade, and over the past three years, residential property has well and truly outperformed shares.
Over the most recent twelve month period shares have outperformed the housing market
While the volatility of the share markets may appeal to some, it is the stability and resilience of residential housing that is likely to be one of the key reasons why investing in the housing market is a popular choice for mum & dad investors.
The best of times and the worst of times simultaneously for Queensland property market
Property Observer reports that Queensland has simultaneously reached both the bottom and the top of the property market, according to managing director of National Property Research, Matthew Gross .
His two-way bet stems from his view of the two-speed economy in Queensland.
“Many of Queensland’s regional centres have experienced demand at record levels, most fuelled by investors that have chased the next big thing. Some will have done very well, many may be okay but unfortunately, those late to the scene are probably doing the equivalent of sticking their fingers in a dyke trying to stop the flow of leak,” Gross says in his latest newsletter.
“South-east Queensland, on the other hand, has had some of the most diabolical trading conditions in memory. Now this is where I stick my neck out… I believe the worst may well be behind us. This doesn’t mean that the recovery is going to be quick or uniform. It will be like dropping a stone in a bucket and watching the ripples move out.”
The improvement is partly being driven by increasing levels of migration, Gross says, but also by limited building approvals.
“Whilst this is not good for the construction industry in the short term, it is setting up the preconditions for a shortfall in the residential sector. Rental pressure remains firm in many locations, this is likely to increase over the next couple of years,” Gross says.
The bankruptcy rate has dropped to pre-2005 conditions, and the Reserve Bank is in a stimulatory frame of mind, with a possible extra 50 basis points in cuts to come, Gross says.
He says that the conditions for recovery are there, but not every region will experience the return.
“Areas like the western corridor that have significant supply are likely to experience a more modest improvement in the next two years, though the rail and improved amenity continue to make this a region with sound prospects into the future,” Gross says.
“The inner suburbs of Brisbane are experiencing higher demand. The Sunshine Coast and Gold Coast are starting to pick up, but this is often on the back of mortgagee sales which have set back new projects at least two years. As this stock is finally absorbed into the market, developers will again start to build again”
Source: Property Observer
DO NRAS Properties make good investments?
If you’ve been following my blogs for a while you’ll know I’ve often suggested avoiding NRAS properties.
While I am not criticising the NRAS scheme itself, investors need to be wary of the property marketers that try to make the scheme look like a good investment product. It is not.
In a recent article Xavier Perronnet warns investors of the traps of investing in NRAS properties
He says : Investment schemes that are heavily marketed off the back of cash incentives and tax benefits are nothing new. In recent times we have seen a number of investments that have been sold with a focus on up front benefits only to be a disaster down the track.
Upfront cash benefits are great, but they must be viewed as a bonus. The quality of an asset should be assessed in isolation of any incentives. If the investment asset does not grow in value, or worse has the potential to lose money, then why bother? In some cases keeping your money and just going on a nice holiday is a better option.
For more reasons why these don’t make good property investments read the full article.
Be Happier: 10 Things to Stop Doing Right Now
According to an article in Inc, sometimes the route to happiness depends more on what you don’t do.
Happiness–in your business life and your personal life–is often a matter of subtraction, not addition.
Consider, for example, what happens when you stop doing the following 10 things:
Taking responsibility when things go wrong instead of blaming others isn’t masochistic, it’s empowering–because then you focus on doing things better or smarter next time.
And when you get better or smarter, you also get happier.
No one likes you for your clothes, your car, your possessions, your title, or your accomplishments. Those are all “things.” People may like your things–but that doesn’t mean they like you.
When you’re afraid or insecure, you hold on tightly to what you know, even if what you know isn’t particularly good for you.
An absence of fear or insecurity isn’t happiness: It’s just an absence of fear or insecurity.
Holding on to what you think you need won’t make you happier; letting go so you can reach for and try to earn what you want will.
Even if you don’t succeed in earning what you want, the act of trying alone will make you feel better about yourself.
Interrupting isn’t just rude. When you interrupt someone, what you’re really saying is, “I’m not listening to you so I can understand what you’re saying; I’m listening to you so I can decide what I want to say.”
If something is wrong, don’t waste time complaining. Put that effort into making the situation better.
Everyone is different: not better, not worse, just different. Appreciate the differences instead of the shortcomings and you’ll see people–and yourself–in a better light.
Criticizing has a brother. His name is Preaching. They share the same father: Judging.
The higher you rise and the more you accomplish, the more likely you are to think you know everything–and to tell people everything you think you know.
The past is valuable. Learn from your mistakes. Learn from the mistakes of others.
Then let it go.
We’re all afraid: of what might or might not happen, of what we can’t change, or what we won’t be able to do, or how other people might perceive us.
So it’s easier to hesitate, to wait for the right moment, to decide we need to think a little longer or do some more research or explore a few more alternatives.
Meanwhile days, weeks, months, and even years pass us by.
And so do our dreams.
Don’t let your fears hold you back. Put your fears aside and get started. Do something. Do anything.
Otherwise, today is gone. Once tomorrow comes, today is lost forever.
Today is the most precious asset you own–and is the one thing you should truly fear wasting.
Read the full article here
Blogs you may have missed
If you didn’t have a chance to read my daily blog, here’s a list of the blogs you missed this week:
SUBSCRIBE & DON'T MISS A SINGLE EPISODE OF MICHAEL YARDNEY'S PODCAST
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
PREFER TO SUBSCRIBE VIA EMAIL?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.