There are more property investment articles, commentaries and analyst reports on the Web every week than anyone could read in a month. Each Saturday morning I like to share some of the interesting ones I’ve read during the week.
Enjoy your weekend…and please forward to your friends by clicking a social link buttons on the left.
The numbers don’t stack up for property investment in remote locations: Pete Wargent
There may have been marginal capital growth in apartments over the years, but it’s not the growth periods in these low-demand or speculative regions that worries me.
It’s when the downturns hit, and according to SMH dwelling prices fell by 30% or more in Cairns through the Global Financial Crisis (GFC), wiping out the previous gains. According to SQM Research asking prices have continued to fall over the past four years. Parts of the Gold Coast suffered a similar fate through the GFC.
The opportunity cost of taking heed of this bad advice had you taken it would have been been nothing short of immense. In that time you could simply have invested in a few quality, well-located properties in Melbourne or Perth (or pretty much any capital city) and secured your financial future.
Property investment is a long-term game, so keep it simple and invest in suburbs where the demand is continuous and growing.
Falling interest rates not good for everyone
Another great Real Estate Talk show produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show.
Details of this week’s show:
Does more room in a property equal higher value? James Freudigmann from Propell Valuers explains his view.
Drops in interest rates may be good for those paying off a mortgage, but for first home buyers, it’s not good at all. Catherine Cashmore tells us why.
Plenty more in this week’s show so make sure you tune in.
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 much difference do school zones make?
Domain reports that home buyers are prepared to pay a premium to live in the catchment zone of certain good public schools.
Daniel Godoy, sales director of First National in Carlingford, in Sydney’s northwest, says being in a particular primary school catchment can add $40,000 to the price of a home in his area.
Does this matter if you’re a property investor? Of course it does because the article goes on to say:
“They’ll even rent in there so as they can at least get their children into those schools, so it is quite a big factor.”
I’ve found families who want to get their children into a good public school but can’t afford to buy a house in “the zone” are prepared to rent a house or townhouse and pay a premium to enable their children to get a good education. Being close to good schools has always been one of the amenities I’ve looked for.
Parents are prepared to drive to work, but they want their children to have an easy safe walk to their school.
Boomers put super squeeze on first home buyers
[sam id=32 codes=’true’]One of the reasons apartments in Sydney’s better suburbs are performing strongly is that Baby Boomers are buying up big according to this article in Domain. They say:
Wealthy baby boomers are snapping up apartments across Sydney to bolster their self-managed super funds, helping to dash the hopes of frustrated first home buyers.
Agents estimate super fund buyers have doubled since last year – some snapping up whole apartment blocks – as the numbers of first-timers in the market drop to a trickle.
Tips for buying before auction, John McGrath
With auction clearance rates high, particular in the Sydney and Melbourne property markets, buyers often wonder should they try and snare the property before auction.
John McGrath recently gave his top tips for buying prior to auction at Switzer.com.au
- Tell the agent you’re interested and ask if the vendor is willing to sell privately. If the agent gets a flood of offers after the first open and you haven’t made yourself known to them as a serious buyer, you might not get the chance to make an offer
- Let the agent know you have pre-approved finance. This is a very important signal that you’re a serious buyer
- Offer a price that is close to your walk-away figure. Vendors will only entertain the idea of selling prior if a premium price is put forward. As with all negotiations, the vendors will assume your first offer isn’t your best so leave some wiggle room
- Waive your right to a cooling off period to show you’re a serious buyer
- Do more than a verbal offer. The best way of showing you’re serious is by signing the contract and attaching a cheque for the deposit. Alternatively, put your offer in writing and mention you have your finance approved
- Offering odd amounts is a great tactic especially after making a couple of lower offers. For example, rather than offering $460,000 or $465,000, offer $463,500. An odd amount suggests there’s some logic to your offer and it also implies that you’re at your financial limit
- Be prepared for a situation where you and another buyer are at the same price, so it will come down to a race to exchange. If neither of you are willing to offer more, it will be a matter of who can get themselves organised and in a position to sign the contract first
How do you like change?
Most of us don’t like change, but to be successful you will need to embrace change according to author Sam Arbesman in this interview with Farnam Street:
People who cannot deal with change are going to be at a huge disadvantage in the world.
These type of people might not have been disadvantaged in previous generations, where change proceeded rather more slowly, but as the many fundamental changes around us — in what we know and in what the world likes — continue to accumulate, we often have to deal with large numbers of these changes in a single lifetime.
In the book, I chronicled the large number of computational information storage technologies (ranging from floppy disks to the Cloud) that I have used over the course of three decades, which is a far cry from the one or two that people of the Middle Ages might have used for storing information (books and scrolls).
Those who can’t adapt will have a great deal of trouble in this world.
Blogs you may have missed this week:
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.
NEED HELP LISTENING TO MICHAEL YARDNEY'S PODCAST FROM YOUR PHONE OR TABLET?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
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.