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Saturday Summary – the most interesting property investment articles I read this week

Each Saturday morning I like to share some of the interesting property investment articles I’ve read during the week with you.

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 button on the left.

Residential property investment outperformed all other asset classes for past 10 years:

Investing in property over the last two decades has delivered strong compared with shares and other asset classes, according to the latest Long Term Investing report from fund manager Russell Investments.

The fund manager says taxation policies have been a key factor in the sector’s long-running attractiveness.

Over the past 10 years to December 2011 residential investment property has outperformed all other asset classes at the lowest and highest tax rate at 7.2% p.a. and 5.8% p.a. respectively.

Read more…

The foundations to build a strong property portfolio

Another great show produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show.

This week he has a heap of great guests:

  •  Ken Raiss from Chan & Naylor will take us through self managed super funds.
  • Michael Yardney from Metropole Property Strategists explains the 4 best pieces of advice you are likely to hear about formulating a plan.
  • George Raptis from Metropole Properties Sydney will discuss planning the next most vital part about setting up a successful property portfolio – after formulating the plan. George will give us the 3 key areas to study and what to look for to avoid the big pitfalls.
  • Ken Rockley features in this week’s case study. Ken takes us into the world of commercial property investing.  Listen to his story about how he has become the ‘accidental investor’.

You should definitely subscribe to this new weekly program. Click Here It’s free!

Video of the week – RPData’s Australian Housing Market Update

In their latest property market update video RPData explain that our housing market remains soft despite the recent  rate cuts.

The RP Data-Rismark May Home Value Index results confirmed a further drop of -1.4 per cent for capital city home values indicating that the housing market has not responded to the latest round of interest rate cuts.

The latest drop brings the cumulative decline to -2.2 per cent over the first five months of 2012 and overall values are down -5.3 per cent over the past twelve months. This short video gives a good explanation of what’s going on….

To watch it click here 

John McGrath’s Market Review – Winter 2012

In his winter market update, property icon John McGrath explains that:

Overall, the market is not in a bad state but people continue to wait for positive signs.

This has been a protracted and agonising period of uncertainty. The constant flow of good and bad news both at home and overseas continues to undermine confidence.

Once we see some positive and sustained economic change overseas, I believe our property market will begin a long and slowish recovery over a three to five year timeframe.

The flipside to a market downturn is the exceptional opportunity it presents to buyers. Affordability has grown significantly with the recently released HIA-Commonwealth Bank Affordability Index showing an improvement across the capital cities for the fifth consecutive quarter in March.

The best time to buy is when others aren’t.

Markets have a herd mentality and following the crowd gives people a much needed sense of security especially in this time of economic volatility. Buyers need to be brave – this is exactly the type of market they will look back on and say  ‘I wish I’d bought in 2012.’

Read more…

Is the housing market set to make a comeback?

RPData says: the short answer to that question would be maybe/sort of but the long answer is much more insightful.

Consumer sentiment data for June released by Westpac and the Melbourne Institute this week showed that overall confidence remained quite weak however, the time to buy a dwelling index increased by 8.2% (This sub-index of the broader Consumer Sentiment Survey does show some volatility, so we would need to see a few months of positive trend before relying on this indicator).

It appears that the lower interest rate environment is having a more positive impact on respondent’s perception of the property market and the ongoing weakness in equities markets is also probably helping.

Each quarter the consumer sentiment survey asks the question about the wisest place to save.  In June, 25% of respondents felt that real estate was the wisest place up from 18.6% of respondents in March.  Again, this data seems to suggest that lower mortgage rates are making real estate a more attractive investment prospect.

Read more…

Throwing money at housing is no cure

Michael Pascoe writes about yet another contradiction to ponder about our economy: of the two biggest purchases most Australians make, one is going gangbusters while the other is flat and getting flatter. Go figure.

And the one that is booming is guaranteed to be a completely dud investment, rapidly and inevitably losing value by double digits a year, while the laggard historically has done quite well, appreciating well ahead of inflation.

No prize for guessing the first is car sales running at near-record levels while the second is moribund housing.

We’re happily putting the pedal to the metal where the rubber meets the road, especially for the gas-guzzling SUVs, while refusing to invest in a new home.

Oh well, worst comes to worst, you can always sleep in your truck.

Read more…

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About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


'Saturday Summary – the most interesting property investment articles I read this week' have 2 comments

  1. Avatar for Property Update

    June 24, 2012 @ 12:18 pm Michael

    Hi Michael,

    Thanks for another interesting article.

    If you read through to the end of the first article link (Residential property investment outperformed all other asset classes for past 10 years: Russell Investments) you find the following:

    ““The investment fundamentals of residential property are becoming less attractive compared to listed shares,” says Greg Liddell, Russell’s director of consulting and advisory services.

    “The main risks for residential property relate to relatively high valuations and the prospect of further deleveraging by Australian households.

    “Low rental yields will make it difficult for residential property to outperform listed shares as an investment over the next decade,” he says.

    At the Prime Minister’s Economic Forum in Brisbane yesterday, Westpac boss Gail Kelly said compound growth in house prices were over for good and Australia would not see another housing boom.”

    I’d be interested in your take on the above. I know there are a lot of “fear-mongers” out there, but I don’t know what agenda Gail Kelly would have in stating that there will never be another housing boom when she is in the business of trying to sell loans?

    Reply

    • Avatar for Property Update

      June 24, 2012 @ 12:28 pm Michael Yardney

      Thanks for the comment Michael
      The fact that Russel Investments recommends shares doesn’t surprise me – they’re in the share business. It must really annoy them each year when they release this annual report and find property wins out.
      As for Gail Kelly’s comment – there is no doubt that overall, we won’t have double digit growth for some time. To say never, ever again is quite bold.
      But that doesn’t mean some areas won’t experience strong growth and that you can’t “manufacture” capital growth through renovations or development.
      Of course you make your money in 4 ways in property:
      1. Capital growth
      2. Rental Returns
      3. Tax benefits.
      4. Manufacturing growth through value add
      A good invetsor takes advantage of all 4 of these.

      Reply


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