Many investors choose capital cities because of their size and because of the great variety of industries that are available in them. But you know, there are many big regional cities in Australia that offer great investment opportunities as well. For example in Queensland, you got cities like the Gold Coast with around 700K people, Sunshine Coast is around 300K. In Victoria, Geelong’s got 200K people. (Read More…)
If you are starting out as a property investor, sure there are some risks and it can be daunting. But it also can be an exciting time and an opportunity to secure not just income now, but security in retirement.
Hello! It’s John here and this video is going to tell you a little bit about shooting star housing markets. They blaze brightly for a year or two and then they disappear from view altogether. And at the moment, Sydney star is pretty bright, there has been a lot of price growth with all the attention focused on Sydney and people wondering why it hasn’t occurred in other capital cities to that extent. When you look back at the history of the housing markets, from 2002 onwards, what we discovered there is that every capital city has had a turn as being the leading city. That is the growth generator in each year, it’s been different. (Read More…)
Hi it’s John here, and I would like to tell you a little bit about why virtually all of the property forecasting methods that the investors rely on are wrong – and it is because they are looking in the wrong direction. (Read More…)
Hello it’s John here with this tale of 2 visionaries. One was right, and one was wrong. One was listened to and one was ignored. And the consequences were disastrous for the people involved.
Now the first one was Henry Hellyer and he was a surveyor who came out from England and surveyed the north-west of Tasmania in the early 1800’s. He came to the conclusion that the land was imminently suitable for farming. A lot of immigrants came out from England and started farming in the north west of Tasmania. The problem was that he had completely misread the climate and the land. It was unsuitable for farming, bitterly cold, snowing and blizzards for much of the year. He’d just arrived luckily at a time when that wasn’t happening. The settlers who arrived there and set up their villages and towns lost everything. The outcome of that was that Henry Hellyer himself committed suicide as a result of what had occurred.
Now the other visionary was George Goyder. He surveyed much of the north of South Australia in the mid to late 1800’s. He saw that the land was not suitable for farming and he advised the government not to allow for farmers to move into the area. But after a number of years of really high rainfall, the government ignored his advice and allowed farmers to move north of the line he called Goyder’s Line which meant that was an area where the rainfall meant that it was not an area suitable for farming. So the good rainfall meant that the farms prospered, towns were settled and then of course the rain stopped and the area turned back to desert and the towns were abandoned.
So Goyder was right, but people lost everything because they didn’t listen to him. And in the case of Hellyer, he was wrong but people lost everything because they did listen. So what does this mean for property investors? Well it means that you’ve got to look very closely at the claims you hear about the benefits of a certain area for investment. Look very closely at the claims – are they valid? Look at the track record of the people making the claims to make sure that they’ve got a good track record. Look at the evidence they produce to substantiate their claims, is it real, hard evidence? Don’t be mislead by emotional appeals – always look at the facts and that way you’ll be sure to avoid the sorts of mistakes that the people who followed Hellyer and who didn’t listen to Goyder fell into.
Hello this is John with the story about the caterpillar and the butterfly. One of my children’s favorite stories was always ‘The Very Hungry Caterpillar’. It’s a story of how the caterpillar ate and ate and ate, consuming everything and then eventually it made a cocoon and then of course turned into a beautiful butterfly. There’s always gasps of amazement no matter how many times they’d heard the story when that happened and the beautiful butterfly emerged.
It occurred to me that the housing market is a bit like that as well. There are many, many suburbs and towns around Australia which are like hungry caterpillars. Prices are falling, they’re eating up investors’ funds, rental yields are low and there’s large rental vacancy rates. But sometimes these markets can change, and they can change within a few years into beautiful butterflies. What you need to look for when you’re looking at these sorts of areas, are areas where prices have been falling or demand has been low but where something is changing; the dynamics are changing. It could be that there’s an increase in overseas tourism. It could be the number of retirees moving into the area is rising or it could just be a new holiday-maker place that people are moving to. This creates work for people and of course as work is created more people move in and so the demand for housing rises and of course with retirees moving in, you find that price growth occurs as well. Then when people least expect it, suddenly this housing market which was a very hungry caterpillar consuming investors’ money suddenly turns into a beautiful butterfly with high price growth and soaring yields. So look for those changes in markets and when they occur you may well have found your own beautiful butterfly.
The Greek tragedy that is unfolding in Europe is unlikely to have any lasting economic or financial damage to Australia. But it could have an unexpected effect on our housing markets, and that’s due largely to the fact that when economic condition deteriorate, jobs dry up, salaries are cut and so on. What do people do? Well they leave.
Australia’s housing market has largely been based on arrival of people from overseas countries under such circumstances in the past. Now for example, after the First World War we first of all had a huge influx of soldiers arriving back from the war and they started families, and housing prices started rising. The same thing happened after the end of the Second World War. There was a huge lift in house prices as the soldiers returned and wanted to start families. They were assisted by Wart Service home loans… in fact housing prices double in just 2 years after the end of the Second World War. Then suddenly, the price growth stopped and this was because a large number of people were now arriving from other countries from war-torn Europe. These people had to rent as they couldn’t afford to buy, so what happened then was that rent started escalating dramatically and prices stopped going up. That continued for a number of years until those people could afford to buy their own homes.
This is what we may be seeing again with the arrival of a large number of Greeks coming as they escape the turmoils in their country. What impact that is likely to have on the Australian housing market depends on where these people go. I think in the main they will be young, educated, cosmopolitan Greeks who will seek an urban lifestyle – new well-appointed units which they will rent for a while, probably close to the CBD. So in Sydney & Melbourne, you’ll likely see an increase in rental demand from the very areas that are most at risk of suffering rent surpluses right now. So this is excellent news for our housing market, and it’s of course great for the young people who are coming here from Greece who are starting their new life as well.
That’s the impact, as I see it, that could happen. It’s a great one for housing markets that are currently at risk. Until next time, ‘bye’ from John.