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.
Busted: why investing in units isn’t always as smart as you think
If you’ve been following my blogs you’ll know that I think apartments often make the best property investments.
While over the last few years apartments, in general, have had better capital growth and rental returns than houses, not all apartments make good investments. This article in Your Investment Property Magazine warns of some risks to watch out for:
Risk 1. Some unit markets are oversupplied
Risk 2. Some apartments are too small for tenants
Risk 3. Avoid units in high rise blocks
Risk 4. Steer clear of off the plan purchases
Risk 5. Watch out for units that rely heavily on their position in the block.
National Property Lowdown – Spring 2012
Another great Property Uncut show produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show.
This week we will visit every State and Territory in Australia and even look at the New Zealand market as we discuss each area with a specialist who can tell us about the mood, the sentiment and how buyers and sellers are feeling.
You will hear how some areas are booming while others are struggling. There are areas where prices have fallen and others where sellers are flushed with multiple offers, which is pushing prices up.
Join us on a journey this week as we start in South Australia and finish in New Zealand. We check in with 10 market specialists to give you the most accurate and comprehensive lowdown on the property market.
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.
Australia escaped the GFC through saving and hard work, not luck
In an article in Property Observer, Mark Bouris, head of Yellow Brick Road writes that it has become the norm to read about our great luck as Europe and the United States wrestle with soaring debt and high unemployment, and Australia just sails through.
But he thinks that Australia’s excellent response to the GFC is as much about individual austerity and sacrifice as it is about exports to China and economic management.
There are a number of factors operating on our economic wellbeing right now that average Australians deserve a pat on the back for.
For a start, we are saving again. While the Australian household savings rate fell below zero in 2003, it started rising slowly from there and then made a big comeback after 2008. The current savings rate in this country is around 9.6% – much healthier than the 4.3% in the US and 3.3% in Canada.
Australians deserve praise for responding this way during a crisis.
During the post-GFC fallout, Australian household debt-to-disposable income also reduced slightly from 135.3% to 134.5%. It doesn’t seem that healthy, but it certainly looks healthier than the US and UK, where it’s over 160%, or Canada, where it’s 152%.
“Lucky country” notwithstanding, paying down expensive debt and securing cheap debt is smart, and it’s what Australians have been doing. Credit card spending has slowed since 2008, and at the same time Australians have been shoring up their mortgage positions. Around half of Australian mortgage holders are now ahead on their repayment schedules, and the ratio of mortgagees who are on schedule is well over 80%. It’s a very healthy picture.
In Australia, the Fitch agency ranks mortgages holders at around 1.5% delinquency, while in the US, the mortgage delinquency rate is at 7.58% of mortgage holders who are at least 30 days in arrears.
It’s an enormous difference and is partially underpinned by unemployment numbers: 5.2% in Australia, 8.3% in the US.
Property investors needs realistic expectations
There’s an art to buying investment property. This article in the Sydney Morning Herald ask a group of experts (including myself) where to look to get the best results.
It concluded that while property prices may be treading water, a good investment can still be found if investors are realistic about the prospects for price growth.
This article explains how pockets of Sydney are performing well and gives an inspiring case study of Maria and Yuri who built a portfolio of 4 investment properties over the last few years.
Revealed: The locations pegged as worst for mortgage delinquencies
Smart Company recently ran an article saying that the country’s tourism hotspots and coastal areas are continuing to suffer, with these suburbs appearing as some of the worst in a new list of locations ranked by mortgage delinquency rates.
Queensland has been pegged as the worst state in the new Fitch Ratings report, with its tourism hotspots having had an effect on the property market for several years now.
However, Fitch Ratings analyst James Zanesi told SmartCompany this morning the situation should improve over the next six months as rate cuts from the RBA flow through into consumers’ pockets.
Queensland remains the worst performing state. It carries a 30+ day delinquency rate of 1.86% as of March 2012, up from 1.7% in September 2011 and above the national average of 1.6%.
The national rate of 1.6% is also up 18 basis points since September 2011.
“For the first time since this report was first published, (November 2007), most of the 10 worst performing regions are in Queensland rather than New South Wales,” the report states.
The 20 worst performing postcodes by value:
- Nelson Bay, NSW – 2315
- Hoxton Park, NSW – 2171
- Surfers Paradise, QLD – 4217
- Eagle Vale, NSW – 2558
- Budgewoi, NSW – 2262
- Arncliffe, NSW – 2205
- Rooty Hill, NSW – 2766
- Cessnock, NSW – 2325
- Helensvale, QLD – 4212
- Macquarie Fields, NSW – 2564
- Tweed Heads, NSW – 2485
- Waterford, QLD – 4133
- Pacific Paradise, QLD – 4564
- Crestmead/Marsden, QLD – 4132
- Beaudesert, QLD – 4285
- Carbrook, QLD – 4130
- Greenacre, NSW – 2190
- Green Valley, NSW – 2168
- Palm Cove, QLD – 4879
- Casuarina, WA – 6167
Which will be the world’s richest country in 2050?
If you enjoy peering inside the minds of the world’s super rich Business Insider recently took a spin through the 2012 “Wealth Report ” compiled by Citibank and Knight Frank. It’s an analysis based partly on interviews with the super rich (people with more than $25 million in investable assets.)
Yes, the report contains musings on why yacht sales are down and the pros and cons of buying a sports franchise. But that’s not the most interesting part.
The study predicts that Singapore will be the world’s richest nation by 2050 .
And by that, they mean its per capita GDP at purchasing power parity. (For those who skipped economics class, this attempts to more accurately measure the average income by considering inflation, cost of living and exchange rates.)
According to Citibank’s 2050 prediction, the top five countries by this measure will be:
1. Singapore: $137,710
2. Hong Kong: $116,639
3. Taiwan: $114,093
4. South Korea: $107,752
5. And sliding in at number five, the only non-Asian nation, the U.SA.: $100,802
But there are glaring questions about these numbers, which are based on Citibank’s own analysis.
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