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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 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.

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Why house prices are set to jump 10 to 15pc

Ina n recent article in the Australian Financial Review David Bassanese explains why he believes house prices may rise by 10% to 15% next year, and it all revolves around affordability.

he says that assuming per capita household incomes grow by around 4 per cent and mortgage rates drop another 1 percentage point, home repayment levels would drop to 20 per cent below their long-run average by next year.

He then goes on to explain that if the required home loan repayment is relatively low, house prices (all else constant) will tend to be move up.

In fact this is exactly what caused the property boom of the mid-1990s

There are some interesting concepts in this article including the author’s mesure of affordability.

Read the full article here…

 Rubbery figures quoted on positive geared property

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 he has a heap of great guests:

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.

How the 2011 census shows Australia’s housing market is undersupplied.

There’s been lots of debate recently about whether our housing markets are undersupplied or oversupplied. More confusion was created when the census data showed there were fewer Australian households than previously thought.

I won’t even get into the argument of where they all went but in a recent article Angie Zigomanis, senior manager of BIS Shrapnel suggests that we do have a housing shortage.  

He says that based on the 2011 census data, BIS Shrapnel’s estimate of the deficiency at June 2011 is 37,000 dwellings, concentrated in New South Wales, where the number of households appears lower than it otherwise would be due to people being forced to squeeze into the existing dwelling stock.

Of course a  national deficiency of 37,000 dwellings at 2011 was insufficient to drive any upturn in dwelling construction in 2011-12.

However, declining new dwelling completions, even at the lower level of new household formation rates derived from the 2011 census, have fallen below underlying demand in 2011-12, and a rising deficiency is now emerging. As the deficiency continues to rise, it will first be seen in vacancy rates (already evident in Brisbane and Perth), before flowing through to rental growth, construction, and some level of price growth.

Yes the property cycle is moving on. You can read all the details behind these findings here...

Australia has an oversupply of 60,000 dwellings: Michael Matusik

Just to confuse you, in contrast to the article above, property analyst Michael Matusik believes we have 60,000 too many dwellings.

He has been arguing for some time that the undersupply argument is a myth and explains why in this article.

Why are we Aussies so glum about our economy?

In a recent blog Peter Switzer  wrote;:

When I was in Italy a few months ago, where I was staggered by how buoyant retail sales looked in places like Milan, in the space of 10 minutes waiting on the phone to talk to a radio host, I jotted down 20 reasons why Aussies might be gloomy.

Try these:

1. First homebuyers were asked to help the economy out when the GFC struck and were encouraged to borrow on low interest rates and with the boosted grant and as soon they shouldered the debt, up went interest rates.

2. Investors who lost 50 per cent of their portfolio’s value in 2007-09 need to see a 100 per cent rise in the market to get even but the increase has only been around 30 per cent.

3. Super trustees have endured lower balances since 2007 and the improvements have been hardly great.

4. Retirees are so scared of stocks they are chasing term deposits, which do not generate enough return to ensure their nest eggs will grow sufficiently.

5. Business confidence readings show it’s way below trend.

6. Business loan interest rates are at high levels and loan availability is extremely low for many borrowers.

7. Banks are not passing on rate cuts in full.

8. Europe spooks us via the stock market daily.

9. China’s hard landing talk comes through regularly.

10. The carbon tax causes rising power bills.

11. The high dollar hurts exporters, tourism operators and local import competitors.

12. Retailers are battling the internet and the fact they have to charge the GST unlike foreign rivals.

13. The RBA’s rates were too high until recently.

14. House prices have been falling for many homeowners.

15. Petrol prices are historically high.

16. When national growth numbers were unbelievably good, New South Wales grew at only 0.7 per cent and Victoria at 2.6 per cent.

17. Manufacturing is contracting and at a three-year low.

18. Consumer confidence remains negative and below the long-term trend.

19. Leadership in Canberra could be better.

20. And the media is preoccupied with stories like this.

I think gloominess is quite understandable to anyone who lives in the real world.

How to be Unhappy

The pursuit of happiness is as old as modern civilization writes Chris Guillebeau.

Books, elixers, religions, and philosophies are all devoted to it. Happiness is a quest, an obsession, and a universal aspiration.

But what does it take to be unhappy?

In some ways, it’s easier than happiness itself. New research and much life experience offers a simple recipe for genuine discontent.

1. Buy things you can’t afford or don’t want.
Either choice is a sure fit for unhappiness. When you buy things you can’t afford, you go into debt, which limits the other choices available to you. When you buy things you don’t want, you lie to yourself about the real source of your unhappiness.

2. Compare yourself to others.
The love of comparison is the root of much misery. Therefore, judge your success or worth based on other people, especially those with a different background from you. Do this on a continual basis, always looking for a new idol or competitor in which your ideal unhappiness lies.

3. Take no joy in the journey.
Focus only on the destination without appreciating the ride. Fail to celebrate small successes, and neglect to pause for reflection on how far you’ve come.

4. Respond instead of initiate.
Take no responsibility for your schedule or preferences. Let other people set the agenda for your life. Take the lead for your schedule from your Inbox, voicemail, or someone else’s demands.

5. Allow other people to determine your values and priorities.
Set no compass point for your life. Drift in the wind. For best results, allow your values and priorities to shift as you waver between bosses or role models.

6. Refuse to challenge yourself.
Take it easy and settle into routine. Choose to believe that all stress is bad and seek to live as relaxed a life as possible.

7. Whine and complain to anyone who will listen.
Explain how the world isn’t fair and how you would do things differently if you were in charge. Bonus: this practice also allows you to contribute to other people’s unhappiness.

8. Focus only on yourself.
Refuse to forgive. Hold on to grudges. See the worst in people. Do not give out free lunch.

9. Settle. Accept things as they are no matter how unsettling they might seem. It could always be worse, right? Live in the complacency of your situation and refuse to fight for something better.

Happiness may require more than pithy quotations on Twitter and a good sleep cycle, but unhappiness is fairly simple.

What can you add to Chris’s list please comment below…



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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 1 comment

  1. Avatar for Property Update

    October 5, 2012 @ 10:39 pm przekaźniki czasowe opóźnionego załączania

    Hi there, i read your blog from time to time and i own a similar
    one and i was just wondering if you get a lot of spam feedback?
    If so how do you stop it, any plugin or anything you can advise?

    I get so much lately it’s driving me crazy so any help is very much appreciated.

    Reply


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