2013 and investing in property
Our predictions for the year 2013/4 is that this is the year to invest in property - fundamentals required for successful Investing are aligned and the fact that most property markets across Australia have already bottomed out.
Blogger: Stephen Lazar, properT networker
Considered or are considering investing in property then avoid the fear of missing out by starting your research today. It is still a buyer’s market on the cusp of becoming a seller’s market giving the Vendor the upper hand in maximising his profits at your expense.
Securing property is based on market fundamentals and the early indicators visible during 2012, that will continue on through 2013/4, were visible to those looking!
Whilst you preferred to pay income tax and not make a decision to invest in property based on what you were hearing and reading … the positive facts on the ground affecting the value of property were and are already in play.
An astute investor determines their reason(s) WHY they want to invest; they review the numbers and underlying facts and make an informed decision without emotion. The only emotion is linked to their reason ‘what this investment will do to their lifestyle and financial planning goals.’
Whilst 80% of want to be investors are on hold, the astute 20% make decisions. Anthony Robbins quotes : "A real decision is measured by the fact that you've taken a new action. If there's no action, you haven't truly decided.”
Isn’t it ironic that those that need to create some semblance of wealth are always those that continually look for the reasons why they should not make an informed decision? The market is too high, the market might crash, I am going to wait and see what happens … excuses to avoid making a decision leads to being in the exact same position that they were and will always be. Insanity is quoted as “Doing the same thing and expecting different results.”
The fact of the matter is that anyone and can find a way to invest in property, they just need to acknowledge that if they don’t do something they will be far worse off in life than if they did which requires a burning desire and goal to commit towards.
Fundamentals required to ensure that property is holding its value or even growing in capital value include :
• Population Growth
• Immigration into the ‘Lucky Country’ is at maximum annual capacity
• New Employment Opportunity and low unemployment rate
• Migration into Cities
• Strong Demand for dwellings
• Insufficient supply nationwide
• High demand for rental property in the inner suburbs is sparking a Rental Property crisis
• Very low vacancy rates
• Majority of people can afford to rent or buy a dwelling priced between $300k to $600k
o Prefer to live in the inner suburbs
o Median house price is forcing them into smaller sized dwellings (apartments) which they can afford
o Insufficient supply of this type of dwelling
• Rising Rents + Increased Sales across Australia leads to Capital Growth
• Strong Stable Economy (one of the strongest in the World)
o Australia is experiencing its largest Resources and Mining opportunity in its history with supply contracts of 20 years already signed off
o Industry Investment
- In Queensland Resources over $200 BILLION Dollars alone, why would this amount of money be invested if the future is as bleak as media want us to believe?
- How to equate a billion = 1 billion seconds ago it was 1959 and a billion minutes ago Jesus was alive …
o Infrastructure investment by governments amounting to billions of dollars
o Export of Coal, Steel, Coal Seam Gas etc on the increase improving GDP
o China our major trading partner is surging forward with an anticipated growth of 8%
o Steel prices back to all time high’s
o Foreign investment into Australia Resources industry worth Billions of Dollars (China, India, Japan, Korea amongst others)
o Future Growth proving Stable and Safe in our emerging economy
o Strong and secure Currency Rate
• Australia is a Safe and Desirable destination for Off shore Investors in Property
o Compared to many Asian countries, Australia offers Value for ones Investment Dollar
• Australia is a Safe and Desirable destination for Off shore Investors in our Economy and Retail Environment
o Why would International Brands such as Costco, Masters, Alid’s, H& M, Zara, Uniqlo, Topshop etc be securing sites and opening stores Nationwide if Australia was in such a bad way?
• The Australian Banking System is heavily regulated ensuring financial security and protection of our markets
• Little incentive to save money in the banks as interest rates are low
o Financial Freedom and ones Future at retirement is more important today than ever before
o Most people will never be able to afford to retire, especially in the lifestyle that they are accustomed to today … this is a major realistic fear
o High incentive to borrow money to Buy or Invest in Property as interest rates are at an all time Low
• Investor friendly Taxation System encouraging investment into property
• Australians are sick and tired of negative pessimism when all is not as it is being reported by the media
o Australia continues to demonstrate an exceptional history and proven track record for growth in Property Values
o On average property in Australia has doubled every 7 – 10 years over the last 130 years of records being kept
• Australians are ready for a change in Government which looks set to occur later this year with a landslide change in federal government
• A surge of confidence in the property market will begin to occur, it already has. And with it comes capital price increases
• With renewed confidence leading to increased demand for those fearing on missing out, we predict that developers and vendors will increase their prices accordingly to take the profit margins they were used to getting
• The Fear of Missing Out that occurred during the previous property upswing was unhealthy for the property market … yet human nature cannot be changed and two people bidding on the same property will inevitably try to outbid each other for Fear of Missing Out … driving property prices upwards
All of the above factors are in play across Australia, admittedly in certain locations more than in others. We identified that they were in play during 2012 and will only be compounded in 2013 and 2014 forcing values of property to increase.
As the Australian Share Market continues to recover, investors will want to find security in Bricks and Mortar (Property) to hedge their bets and minimise risk. More Self Managed Super Funds will be set up to acquire Investment Property (once again to minimise Retirement Planning risks) … the demand for property WILL increase and supply simply cannot keep up.
Property in the Resource Regions where over $200 Billion Dollars of Investment into new Projects has already been committed will attract migration into these areas. Resulting in Increased Demand, this in turn results in Increased Rental Yields, followed by Increased Capital values without any doubt.
Some locations offer higher low risk profiles and give you every opportunity of owning a Positively Geared Investment Property whilst achieving capital growth. Other locations offer little capital growth but Rental Yields are as much as $1000 per week on a property valued at $500k or up to $2,300 per week on a property valued at $960k … because supply is impossible to keep up with demand and people need a roof over their heads
What other investment with a low risk profile could give you this type of Return on your investment? Oh and where someone else and the Tax Man are paying a large slice of your retirement planning on your behalf!
If you have considered or are considering Investing in Property, avoid the fear of missing out by starting your research today it is still a buyer’s market on the cusp of becoming a seller’s market, giving the Vendor the upper hand in maximising his profits at your expense
Quick tips on what to consider when Investing in Property :
• How will growing your wealth improve your lifestyle, what is your underlying reason to improve your current financial position and link your investment to these goals
• Do you want capital growth, high rental yield or both
• Do you want to be negatively geared or positively geared
• How many years do you want to invest for
• How much will the banks lend you
• What equity in your current property do you have to leverage off
• Or if you do not own your home, it is advisable to still be in the property market and own an investment property
• What amount of deposit do you have available to put down
• Are you making an informed Investment decision based on the numbers and market fundamentals of where you should be investing
• Or do you want to be attached emotionally to your investment property and be able to drive past and feel and touch it
• If the property is going to be fully managed on your behalf by professionals, are you comfortable investing in a growth location even in another State to maximise your return on your investment
• Are you aware that securing a new or off the plan investment that is more expensive than an existing older property will ‘cost’ less out of your pocket / or be positively geared than if you invested in the cheaper older property?
o To Positive Gear or Negative Gear … ask us
Take action in 2013 to avoid saying “I should have” so that someone else and the tax man can begin securing your future !
About Stephen Lazar
Stephen is a respected property advisor and founder of properT networker, with many years experience in helping his clients secure and grow their wealth by investing in property.
Our prime objective is to obtain a clear understanding of where you are now and where you want to be and educating you to a point where you are comfortably able to make an informed decision, whether that be a no or a yes. By understanding your investment objectives and needs, we provide you with a selection of ‘best fit’ investment properties to match your goals, we also share with you enough information and invite you to undertake your own due diligence to be comfortable in making your decision.
Investing in property has every opportunity to provide you with the lifestyle you want, using our professional services and making an informed decision will save you time, stress and money moving you that much closer to your investment goals.
We continue to successfully coach our clients across Australia on investment properties that suit what they are trying to achieve and we invite you to take advantage of our industry knowledge, skills and contacts so that you too are able to reach your goals.
Building long term mutually beneficial relationships with you and our industry suppliers now and into the future. For more investment tips contact us