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.
Top performing suburbs in 2015
Dr. Andrew Wilson, chief economist of the Fairfax / Domain Group, forecasts another strong year for the Sydney property market with 7-10% dwelling price growth across the board.
However he tips Sydney inner west to outperform with 10-12% house price growth this year. He selected 13 suburbs that he forecasts will record 15% plus house price growth during 2015.
They are (in alphabetical order):
- Burwood Heights
- Canada Bay
- Croydon Park
- Five Dock
7 reasons why property values won’t collapse | Why most renovations fail | Something you need to know about asbestos plus more
Details of this week’s show:
- Michael Yardney tells us the 7 reasons he thinks prices will not collapse but in fact will continue to grow.
- We ask finance broker Andrew Mirams if brokers can be financial planners as well?
- Jane Slack Smith reveals why most renovations fail to make a profit and she shares her years of experience so you can avoid it from happening to you.
- Brad Beer has some great news about how you can make money from removing asbestos from a property. Another reason not to fear properties with asbestos.
- We have some compelling reasons why you shouldn’t get a real estate agent to bid for you at auction.
Why Australia may not have a recession
Alan Kohler writes in Business Spectator that:
Whether or not Australia has a recession this year or next seems to now depend entirely on the housing sector and that, in turn, is being driven almost entirely by population growth.
It’s all about population growth. On a per capita basis, Australia’s housing starts have been in trend decline for 40 years and the number is now roughly half what it is was 1973.
It means that the most important part of last week’s fourth Intergenerational Report was its population growth forecast: 1.6 per cent per annum for the next decade.
This compares with the forecast of 0.8 per cent per annum population growth in the first IGR in 2002.
The new forecast equates to about 400,000 people a year, of which 215,000 will have to be migrants.
That means about 200,000 houses and flats will have to be built each year for the foreseeable future.
The RBA says we can ride out recession
The Australian reports if worst came to worst Australian households and our banking system could ride out a recession:
The Reserve Bank has punctured doomsday scenarios of a recession causing widespread mortgage defaults and bank collapses, with financial stress-testing of households showing they have become more resilient over the past decade.
Its research shows the vast majority of households would ride out a severe recession without getting into financial difficulty and, although banks would suffer losses, their survival would not be in jeopardy.
“Despite rising levels of household indebtedness in aggregate, the distribution of household debt has remained concentrated among households that are well placed to service it,” a new Reserve Bank study concludes.
The rapid rise in household debt and the current house price boom in Sydney has led to concerns that, after 22 years of almost continuous economic growth, a severe recession causing a jump in unemployment would set off a wave of housing defaults threatening the capital base of the banks. Australia’s major banks have relied overwhelmingly on lending to households to drive their growth over the past decade.
Queensland market on the move
The (REIQ) Queensland figures are also a little skewed – given the truly desperate state of some regional Queensland markets, Brisbane is doing a little better than the statewide figures suggest.
If we blank out the noise generated by the other capital cities in the chart below, we can see that since hitting their most recent trough in June 2012, Brisbane dwelling prices have recorded 10 consecutive quarters of steady dwelling price growth totaling 13 percent.
I’m all in
Barry Ritholtz blogged this great graphic below showing the behavioral market psychology of share investors and how they get it wrong.
Property investors can also learn a lot from this:
Weekend video: Humans Need Not Apply
This video is a little long, but is fascinating – start watching and see if it catches your attention. It’s all about how technology is changing how we live and how it will continue to do so.
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:
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