Hello All
I ask “Are we about to see one of the greatest property booms ever?”
I am a simple investor. I believe in supply versus demand first and foremost and all others factors simply adjust this equation.
So the facts that I see are:
AND three big indicators that I have been commenting about for a while are changing the right way for property:
So to close lets debate pro and cons but as I see it NOW is great time to get in.
Why not? Peter 14.7
I ask “Are we about to see one of the greatest property booms ever?”
I am a simple investor. I believe in supply versus demand first and foremost and all others factors simply adjust this equation.
So the facts that I see are:
- Rents are strongly rising (in Sydney and Western Melbourne two I watch)
- Employment is high
- Purchase prices are not rising, improving the yield, and they are not dropping significantly. Sydney today reported as drop of 0.8% which is nothing.
- Supply (in Sydney) is drying up and no sign of immediate relief
- Banks are tightening lending criteria for loans cutting out new investors and developers
- Developers are nervous (i.e. Mirvac today froze $240M investors from withdrawing their funds financed form developments)
- Construction costs are rising because material costs are rising and labour supply is low or non existent
AND three big indicators that I have been commenting about for a while are changing the right way for property:
- Interest rate are rising from the Banks but economic indicators appear to show the economy has slowed and many are saying the RBA will and indeed must drop rates in the near future. Todays SKY business News predicts October only 8 weeks away.
- Petrol Prices are dropping form record high and will provide more relief to inflation or at least slow any further growth.
- Share market has tanked and lost confidence so investors are getting up and cashed up, Where do they put it?
- Oil could go back up
- US Bank Crisis is yet to fully unfold
- Drought is still strong and affecting food prices
So to close lets debate pro and cons but as I see it NOW is great time to get in.
- I am already “propertyed” up but if I was to buy now I would follow this strategy:
- Lowballing the right properties in strong rental markets (mum and dads in the burbs)
- Get 2003-5 built homes from distressed sellers to provide high depreciations rates.
- Getting the best short rate loan I could to finance this with the view to riding the drops
Why not? Peter 14.7