WEEKEND READS: Catch up on the most interesting articles I’ve read this week

There are more interesting 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 ones I’ve read during the week.

So pour yourself a mug of strong brew and get ready for some weekend reading ….and please forward to your friends by clicking a social link buttons on the left.

Perth property prices predicted to perform particularly poorly

Perth is set for a “prolonged slump” due to an oversupply of property and a weak economy, according to one market analyst.

Simon Pressley said Perth sales volumes peaked two years ago and the numbers since have steadily declined.

The level of new supply in the pipeline is at record levels, while Perth already has the highest vacancy rates of all Australian capital cities, he added.

“Values are likely to end this year below where they started the year,”

“Something significant will need to come from left field to stimulate housing demand otherwise Perth looks headed for a prolonged slump,”

Scrapping schedules | Apartment oversupply |  Pro’s and Con’s when buying off the plan | plus lots more

Another great Real Estate Talk show  produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show do so now by clicking here.

Details of this week’s show:       

In this week’s show Brad Beer explains how when you are renovating you may be able to get a tax benefit from what you throw away. It is called scrapping and could make a huge financial difference to the reno.

Over the last few weeks we have tried to show you how you may just be your own worst enemy because your personal preconceptions influence your success as an investor.  In his fourth and final part of the series on cognitive biases, Michael Yardney will share a few more helpful pointers on why investors often get it wrong and what you need to do to get it right.

Buying off the plan – before anything is even out of the ground –  has become increasingly popular. We take a look at the pros and cons of buying off the plan with George Raptis.

Angie Zigomanis from BIS Shrapnel flags that there is an oversupply of units in the Melbourne market already.

You may have to sell a property in your portfolio that isn’t performing all that well or maybe it’s because you need to free up some capital to invest elsewhere. Whatever the reason its likely there will be a tenant in the property. So do you sell with them in there or market the property while it’s vacant? A good question that we get an answer to today.

Also today, Results Mentor Simon Buckingham tells us why he thinks investing for the long term is the worst piece of advice he has heard.

Gen X and Y, it’s time to toughen up

Malcolm Maiden writes in The Age about the common belief that Baby Boomers had it too good and Gen X & Gen Y are having it hard.

Life hasn’t been a cakewalk for the boomers, and it isn’t hell on earth for their children

And…Housing affordability is not the worst it has been.

You have probably seen reports recently that house prices have returned to record highs as a percentage of household income.

The dollar value of debts that are being taken on to purchase homes is also therefore at record highs.

However as the chart shows, the relative cost of servicing home loan debt is lower than it was in the 80s and early 90s because home loan interest rates have fallen.

It is actually in line with the average since 1980.

In 1989 an average Sydney house cost $170,000, and an average Melbourne house cost $132,000.

Average annual earnings were about $26,400, and mortgages were priced at 17 per cent.

Today, the median Sydney house costs about $873,000, the median Melbourne house costs about $610,000, average earnings are about $77,000, and the mortgage is about 5 per cent.

sat sum

 Aussie investing until 2055

There been lot’s written about the latest Intergenerational Report over the last week, and of course I’m not surprised that regular Property Update Blogger Pete Wargent  provided a great summary including the investment trends ahead of us over the next 40 years.

You can read it on his blog here.

Melbourne: the world’s sixth most expensive city

Melbourne may bask in the title of the world’s most liveable city, but The Age reports that this comes at a price.

The latest global cost-of-living survey by The Economist Intelligence Unit ranks Melbourne as the world’s sixth most expensive city.

It remains a more affordable city to live in than Sydney – but only slightly. The NSW capital ranked fifth in the survey.

The long-term rise in the relative cost of living in Australia, driven by sustained strengthening of the Australian dollar, has cemented the positions of cities like Sydney and Melbourne as top-ten staples,” the report says.

“This comes despite the fact that 10 years ago both cities were cheaper than New York.”

Based on surveys conducted in March and September last year, the average cost of a one kilogram loaf of bread in Melbourne was $4.22 in US dollar terms, compared to $4.96 in Sydney.

The average cost of a bottle of wine in Melbourne was US$23.32, up from US$22.28 the previous year and US$19.45 five years earlier.

The average price of a litre of unleaded petrol also rose year-on-year, from US$1.35 to US$1.42.

Surat Basin towns are dying the death of a thousand cuts as miners leave in droves

The Courier Mail reports that things are only going to get worse for Surat Basin towns and their property markets with an estimated 1000 jobs soon to be lost in towns such as Dalby, Chinchilla and Roma.

The increasing exodus of workers, investment and money from the mining towns has left houses empty and businesses struggling, with many of those left behind wondering what to do next.

The effects of the mining construction boom have mainly been felt in the real estate sector, where rents and house prices doubled from cashed-up workers arriving in the town.

Long-term residents said many pensioners had been forced to leave because of high housing prices and now that prices had fallen some weren’t coming back.

One real estate agent said “a hell of a lot” of property was on the market – about 400 houses were for rent or sale and buyers were scarce.

Five Tips for Savvier Consumption of Financial Media

Josh Brown, a New York based financial advisor, was asked to contribute five tips on how consumers can be savvier in their consumption.

Here’s what he came up with:

1. Remember that everyone has a bias or agenda. Everyone (me too! and you!).

2. Don’t confuse someone else’s time frame for your own.

3. Know that 95% of what you read is contextual information, not actionable (which is perfectly fine).

4. Ignore all forecasts and price targets, except for entertainment purposes.

5. Hierarchy: Books > Articles > Blogs > Tweets

Weekend video: ‪ Bar Magician Flies Through Amazing Tricks

This ex-Marine turned “ghetto Houdini” is a magical must see! Watch as he wows the crowd with his mind-blowing bar magic–and makes Howie Mandel’s pen disappear up his nose!


Blogs you may have missed this week:

If you didn’t have a chance to read my daily blog, here’s a list of some of the blogs you missed this week:

The Opposite of Spoiled: A Better Way to Talk About Money

Why do people really hate bankers?

The 7 steps to buying an investment grade property

4 tenant ‘deal breakers’ and 5 ‘must haves’ you need to know about

Property bubble alert




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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

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