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.
Sydney to streak ahead in house price forecasts
The Australian report the latest forecasts form BIS Schrapnell:
The soaring Sydney property market will achieve growth of 20 per cent over two years to send the median house price well above $1 million, new research suggests.
Prices are also set to take off in Brisbane, but growth will be much more subdued in Melbourne and Adelaide, and prices will fall in Perth, according to forecasts from BIS Shrapnel.
The economic analysts said there are housing shortages in Sydney and southeast Queensland, and while housing construction activity has lifted, there is limited scope for a long run of growth in construction.
Sydney house prices have grown by almost 14 per cent in the year to February, according to Australian Bureau of Statistics data, and BIS Shrapnel expects annual growth of 13 per cent for the 2014/15 financial year, which would take the median price just past $1 million.
A further seven per cent rise is forecast for 2015/16.
Brisbane prices are expected to post six per cent growth in the current financial year and eight per cent growth in 2015/16, taking the median price close to $600,000.
Housing construction activity is a key factor in the price growth, rather than falling interest rates, BIS Shrapnel said.
State by State Property Market Roundup Featuring 6 Experts
Details of this week’s show:
In today’s show we look at our property markets state by state in our annual market wrap.
- We asked our experts to tell us what’s on the horizon with development and infrastructure in their state, any issues that might impact the market in those areas, if there are any areas showing potential for investment and also any areas to avoid and why.
- As we have done in the past, you will also hear them describe what you can buy for $500,000 and where to look.
- Our experts include Peter Kalizos, Damian Collins, Michael Yardney, George Raptis, Shannon Davis and to wrap it all up Dr Andrew Wilson takes an overall look at the national property market.
Arnold Schwarzenegger turns property investment expert: His six tips for success
Arnold Schwarzenegger built his fortune on property investment according to SmartCompany.
“I made my first million in real estate, not in movies,” the former bodybuilding champ told a real estate agents’ summit in Brisbane last week.
Here’s six tips for success Schwarzenegger shared with the audience:
1. Have a vision
2. Don’t listen to the naysayers
Schwarzenegger told the summit there will always be people who don’t believe in your idea, whether in the public arena or your personal life, but you won’t achieve your goal if you always believe your critics.
3. Think big
4. Work hard
Schwarzenegger told the room there is no substitute for hard work when it comes to achieving your goals.
5. Don’t have a Plan B
Schwarzenegger believes people who always have a Plan B or backup plan are in some ways becoming their own naysayer.
6. Give something back
During his seven years as governor of California, Schwarzenegger did not take a wage, instead choosing to give his salary of hundreds of thousands of dollars back to the state.
Why the Sydney construction boom is not a worry
The Sydney economy is arguably the strongest in the country at the moment, albeit there’s not a great deal of competition for that mantle at the present time writes regular Property Update Blogger Pete Wargent :
One of the key drivers of employment lately has been construction.
Unlike Melbourne, Sydney has had an ace up its sleeve being a dwelling and infrastructure deficit meaning that it can construct a high volume of dwellings.
The Sydney skyline is packed with cranes at the present time, which is helped to offset weakness in engineering construction elsewhere in the state as ever fewer new mining projects pass feasibility.
Despite this, there is no looming oversupply of dwellings in Sydney except in a few small pockets, such as the inner south.
In part, this is because much of the visible construction close to the city is actually commercial in nature.
Banks are cleaning up by crushing savers
Robert Gottliebsen writes in Business Spectator that since mid-December the banks have lowered their term deposit rates by between 0.7 and 0.9 per cent — that’s equal to about a quarter of a percent rate reduction per month for three months. And in doing so they are cleaning up:
I cannot ever recall the banks slashing already low deposit rates so dramatically and at virtually three times the rate of the Reserve Bank’s official rate reduction.
But they have found that nervous bank depositors have so far taken rate reductions on the chin and the level of deposits in most banks is rising, or at least steady.
Business is not investing because of poor economic conditions and the Canberra chaos, so business transactions and deposit accounts carry large sums in banks, which are not interest-rate sensitive.
For savers, the banks reckon that by delivering a huge and sudden fall in deposit rates, they will clean up no matter which way the trapped depositors move.
Most will again just cop it. Others are panicking because they have just seen their low incomes slashed by between a quarter and a third.
And guess what they are doing in response? They are now desperately trying to restore income by chasing bank shares and bank hybrids.
Of course, the higher bank share prices and better support for hybrids has the banks smiling.
Others are going out and investing in houses and therefore borrowing, so again the banks are happy.
In effect slashing the bank deposit rate has become a significant force behind the latest leg of the sharemarket boom and the housing boom. And to the extent that the Reserve Bank governor blew the right interest rate whistle, he is part of what is happening
3 reasons to live where you love and buy where you can afford
Penny Prior gives some reasons in Switzer why it may make sense to become a renting investor.
While buying a home where you want to live may be unaffordable for many, often hey can rent there and buy elsewhere. I fact she did exactly that because…
1) It’s affordable
I didn’t have a Sydney loan of over half a million, which there was no way I could afford, and I was getting an income from my property which was pretty much covering the rent I was paying myself.
I was also eligible for all the tax deductions that come with owning an investment property.
2) You can build equity that might enable you to buy where you love eventually
With interest rates as low as they are, you can really make a dent in an affordable mortgage.
3) Or it may turn out that you are able to live where you’ve bought
Any good property investor will tell you to know your market, and buy a property that suits that – i.e. don’t buy a unit in an area that is primarily young families. Buying a place that you find appealing and liveable, however, isn’t a bad way to go about investing.
Weekend video: How much is a trillion dollars?
One trillion is the new billion. No longer is overseas government spending talked about in terms of a mere ten digits.
With the recent flurry of overseas government spending, we are going to need another three zeros to make sense of it all.
One trillion dollars is a number that few people can comprehend, let alone your standard nine digit calculator.
So what does one trillion dollars look like?
Watch this short video and find out…
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: