Thursday, December 26, 2019

Here are 11 lessons can we learn from the past year to make us more successful property investors.

 finance 
'The X factor': 11 lessons learnt about the Aussie property market in 2019
Those of us interested in the Australian property markets have seen it all over the past 12 months.
Concerns about the Haynes Royal Commission into Banking caused tighter lending restrictions, and all those fears of the possible fallout of a change of government with possible changes to negative gearing and capital gains tax.
But all those things we worried about didn’t occur – did they?
The fact is, it’s really been a year of two halves with much more positive property news over the last few months.
So here are 11 lessons can we learn from the past year to make us more successful property investors.
Lesson 1: Beware of doomsayers
As long as I have been investing, I remember hearing excuses why property prices will stop rising, or even worse, why property values will plummet.
However, in that time, well-located properties have doubled in value every ten years or so.
Fear is a very powerful emotion  and one that the media use to grab our attention.
Sadly some people miss out on the opportunity to develop their own financial independence because they listen to the messages of those who want to deflate the financial dreams of their fellow Australians.
Lesson 2. The economy and our property markets move in cycles
The main cause behind these cycles is that we’re human and tend to share the general optimism or pessimism of others creating booms and busts.
It’s a common fallacy that Australian property cycles last seven to 10 years.
Cycles vary in length and are affected by a myriad of social and economic factors. And then, at times, the government lengthens or shortens the cycle by changing economic policies and particularly by manipulating interest rates.
For example, the previous property cycle, which ended in mid 2017, was prolonged by a lengthy period of falling interest rates.
And then it came to an end as APRA tightened the screws on lending, particularly to investors.Lesson 3: Investment markets often overshoot
That is, they move by more than changes in the fundamental influences would seem to require – both on the upside as well as the downside.
Take the Sydney property market which experienced significant growth, overshooting its fundamentals during the previous property cycle.
Then dwelling values in Sydney dropped 15 per cent from their market peak overshooting on the downside, when in general all the fundamentals for Sydney property were sound in 2018 and 2019.
Lesson 4: The market is usually wrong about the stage of the cycle
“Crowd psychology” influences people’s investment decisions, often to their detriment.
Investors tend to be most optimistic near the peak of the cycle, at a time when they should be the most cautious  and they’re the most pessimistic when all the doom and gloom is in the media near the bottom of the cycle, when there is the least downside – like earlier this year.
Market sentiment is one of the key drivers of property cycles and one of the reasons why our markets overreact, overshooting the mark during booms and getting too depressed during slumps.
Remember that each property boom sets us up for the next downturn, just as each downturn sets the scene for the next upswing.
Lesson 5: There is not one property market
While many people generalise about “the  property market”, there are many submarkets around Australia.
The fact is,each state is at a different stage of its own property cycle  and within each state the markets are segmented by geography, price points and type of property.
For example, the top end of the market will perform differently to the new home buyer’s market or the investor segment or the median priced established property sector.
And while there is an oversupply of poor quality high rise and off-the-plan apartments in Sydney, Brisbane and Melbourne, there are more buyers looking for well located homes than there are good properties on the market in our middle ring suburbs.
Lesson 6: Property investment is a game of finance with some houses thrown in the middle
While many beginners believe that finance is all about interest rates or fees, there’s much, much more to it than that.
Strategic investors don’t only use finance to buy properties.
They use finance to buy themselves time to ride through the ups and downs of the property cycle by having a rainy-day buffer in a line of credit or an offset account.
Lesson 7: Take a long-term perspective
It is well documented that delayed gratification leads to a better financial position and a better lifestyle in general.
Warren Buffet put it well when he said “Wealth is the transfer of money form the inpatient to the patient.”
Property investing has always been a long-term game , and the longer your time frame and the better the quality of the asset you own the less important timing of the market becomes.
Lesson 8: Property is a high growth low yield investment
While the argument about capital growth or cash flow investing will rage forever, sophisticated investors know the only way to eventually become financially free through property is to build a substantial asset base.
Sure cash flow is necessary – it helps pay the mortgage and keeps you in the game – but capital growth (having a substantial asset base) is the only way out of the rate race .
Savvy investors recognise there are three stages to their investment journey:
The asset growth stage:  This is why they need to own properties that grow at wealth producing rates of return;
The transition stage:  When they slowly lower their loan to value ratio; and
The stage where they live off their cash machine:  The asset base of sound investment grade properties they’ve built over the years.
Lesson 9: Demographics hold the key
Over the long-term, demographics  – how many of us there are, how we live, where we want to live and what we can afford to live in – will be more important in shaping our property markets than the short-term ups and downs  of interest rates, consumer confidence and government meddling.
Today there are more one and two people households. We are getting married later, divorcing more often and living longer.
And many of migrants coming to Australia are happy to live in apartments.
This means more of us are looking for secure, medium density apartments and townhouses which will become the preferred style of living for as we swap our back yards for balconies and courtyards.
Lesson 10: High-rise apartments carry a higher level of risk
We’ve seen an oversupply of newly built high rise apartment towers in many of our cities.
The problem is, not all apartments are the same.
Some will make great investments increasing substantially in value over the long term, but many of the high-rise towers built in the last fifteen years will continue to underperform with poor, if any, capital growth in the foreseeable future.
Of course, these Lego Land apartment blocks never made good investments.
They offered little scarcity and had no owner occupier appeal having been built with investors in mind, and often overseas investors who didn’t fully understand the needs of the local market.
Worse still, because of the high developer margins and marketing costs, many investors paid too much to start with and have since found that on completion their properties were worth considerably less than their contract price.
The sad reality for these investors is that today, in light of the many media reports of structural problems in some of these high rise towers, there is a crisis of confidence with apartment owners concerned about what unknown issues and liabilities may lie ahead for them and potential purchasers are holding back not wanting to buy themselves futures problems.
This sector of the property market has lost the trust of the buying public and confidence will take quite some time to restore as various stakeholders including state and local governments as well as the construction industry including building surveyors and certifiers scramble to shore up building sector.
Lesson 11: Allow for the ‘X factor’
When most Australians hear about ‘the X factor’, they think about a talent show on TV.
However, economists refer to ‘the X factor’ when an unforeseen event or situation blows all their carefully laid forecasts away .
These X-factors can be negative (the aftermath of the Global Financial Crisis of 2008) or positive (the China driven resources boom of 2010-12) and it can be local or from abroad (the US subprime mortgage crisis of 2008.)
The big X factor for 2019 was the “miracle” election win of the Morrison government.
It wasn’t that long ago that many commentators were forecasting a prolonged property slump assuming the Labor Party would win the Australian federal election.
These X factors affect the economy at large, which of course affects our property markets, but our property markets also have their own specific X factors – unforeseen events that affect the best laid plans and predictions like APRA’s unprecedented restriction of bank lending to investors.
Trying to predict the X-factor is futile: if it’s been predicted, it’s not the X-factor.
So the lesson is while it’s important to take a long term view of the economy and our property markets, you also need to allow for uncertainty and surprises by only holding first class assets diversified over a number of property markets and having patience.Get the latest financenews in your in




Linda Debello LREA推荐LJ Gilland房地
http://ljgrealestate.com.au/testimonials/

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Tuesday, December 17, 2019

Good Afternoon - 10 things you need to know in Australia now!

1. NAB is the latest bank to go under the microscope, with ASIC alleging the bank violated the law more than 10,000 times, leaving it exposed to massive fines. The regulator claims the violations happened over the course of five years by issuing misleading product disclosure statements and charging customers for services they never received – something the bank was allegedly doing as recently as February this year. Not a good look, considering the royal commission and all.
2. Where’s ScoMo? On holiday, apparently. Rumours are circulating he is in Hawaii, but the prime minister’s office won’t confirm or deny that. Some argue it’s a bad look considering large chunks of the nation are currently engulfed in flames, whereas others say he’s entitled to a break and probably wouldn’t be doing much of practical use if he were here anyway. I’ll leave the optics judgement to you.
PM Scott Morrison is being criticised for quietly going on holiday while parts of the nation are experiencing extensive bushfires. | @vanOnselenP
705 people are talking about this
3. The RBA has issued a stern warning: tech firms like Facebook and Google could kill Australia’s big banks. After the royal commission – and everything else which has followed – you might be less than inclined to shed a tear for the financial sector, but there it is. RBA head of financial stability Johnathan Kearns said technological change looked to “erode, or maybe even eradicate” the long-standing advantages that the big four banks have enjoyed for years. On the other hand, the banks themselves are sweating over smaller fintechs, which are popping up all over the place.
4. Amid all that, there’s more drama for Westpac – if you can believe it. Prudential regulator APRA has turned its steely gaze on the beleaguered bank, ordering it to hold an extra $500 million in reserve thanks to its “heightened risk profile”. APRA is also investigating whether the bank’s money laundering scandal constitutes a contravention of the Banking Act.
5. If you feel there aren’t already enough vectors for food acquisition in Australia, you’re in luck. You can now order food for pickup from select restaurants straight through a Google search. Some of the included restaurants which employ their own drivers, like Domino’s, also offer delivery through the platform.
6. Women-only rideshare platform Shebah recently raised over $675,000 in its second round of crowdfunding. CEO Georgia McEncroe told us the money will be invested into technology and staffing. She thinks the ridesharing market will only expand, and her company’s offering – only women riders, only women drivers – will find a space among titans like Uber, Didi, and Ola for those whose primary concern is safety.
7. The pound rallied after Boris Johnson’s win in the UK elections this week, but its falling again because of – you guessed it – Brexit. The PM has moved to make it illegal for Britain to continue negotiations with the EU after 2020, essentially locking in a timeline but also raising the possibility of crashing out without a deal. “This sets up another cliff-edge and could create yet more months of uncertainty for investors just when we thought all was squared away,” one analyst said.
8. Boeing has seen $11 billion of market value erased in just two days over the worsening 737 Max situation. Reports of a possible halt in production and then the official announcement sent shares tumbling. The hit to the corporate giant is expected to have knock-on effects for the US economy more generally.
9. Donald Trump sent a freewheeling, mildly insane letter to House speaker Nancy Pelosi airing out his grievances on the eve of his likely impeachment by the Democratic-controlled House of Representatives. “This impeachment represents an unprecedented and unconstitutional abuse of power by Democrat Lawmakers, unequaled in nearly two and a half centuries of American legislative history,” the letter said. “You have cheapened the importance of the very ugly word, impeachment!” And so on. You can read the whole thing here.
10. The new Xbox will just be called ‘Xbox’. “How is that interesting?” you might ask me. Well, the console was announced with the mildly convoluted branding ‘Xbox Series X’, but Microsoft has now confirmed it is going by the far simpler moniker in the marketplace, with the Series X branding existing in tandem to “allow room for additional consoles in the future.” Alrighty then.
BONUS ITEM
I fully believe I would crash and die within ten seconds of liftoff in this thing.


Best Regards

Linda 琳达珍 and Carlos Debello (LREA)
LJ Gilland Real Estate Pty Ltd
Linda Debello LREA推荐LJ Gilland房地
http://ljgrealestate.com.au/testimonials/

Sunday, December 15, 2019

December 2019 Brisbane housing market update

Monthly highlights

  • National dwelling values marked the their fifth consecutive month of growth in November, taking dwelling values 3.8% higher over the quarter.
  • Combined capital city dwelling values were 4.6% higher over the November quarter and combined regional market values were up 1.1%.
  • In November 2019, dwelling values were higher quarterly across Melbourne (6.4%), Sydney (6.2%), Canberra (3.2%), Hobart (2.8%), Brisbane (1.8%) and Adelaide (0.9%), while Darwin (-1.1%) and Perth (-0.9%) values were lower.
  • National dwelling values returned to positive annual growth territory for the first time since April 2018, up 0.1%. Combined capital city dwelling values returned a positive annual growth rate of 0.4% in November, while Combined regional values were -1.2% lower.
  • National rental rates were flat over the month to November, however the annual rate of rental growth is still trending slightly higher 
  • Rental yields are once again trending lower, with dwelling values now trending higher and rents generally soft.
  • The median selling time has trended lower over the November quarter across both the Combined capital cities and Combined regional markets as market conditions improve. 
  • The volume of stock for sale remains lower than it was a year ago with new stock being listed for sale 13.2% lower nationally. 
  • Auction markets have strengthened with clearance rates remaining above 70% for most week’s since mid-Sept and volumes trending higher through spring
  • High migration rates are continuing to push the national population higher, with growth of 1.6% over the 12 months ending March 2019. 
  • Approved housing supply has been trending lower since late 2017, roughly in line with the peak in housing values.
  • Housing credit is expanding at an historically slow pace with investment credit growth falling in October.
  • The value of lending to owner occupiers increased by 3.3% in September 19, while investor loans were -4.0% lower over the month of September. Investors continue to comprise a lower than average share of mortgage demand
  • Official interest rates were cut by 75 basis point between June and October, mortgage rates are tracking at the lower level since the 1950’s.
  • https://youtu.be/LSMdjTYGlF8

Ten things of interest happening in Australia now!

Late posting due to work
1. Australia is getting its own equivalent of the NASDAQ. According to the AFR this morning, a new S&P technology index will launch in February, giving greater clarity to investors tracking ASX tech stocks. At present, those watching the fast-growing sector individually analyse a number of small-cap stocks. It will be known as the S&P All Technology Index or the S&P AllTech for short.
2. We now know every financial institution involved in the federal government’s first home loan deposit scheme. The Commonwealth Bank and the National Australia Bank (NAB) will be the only two major banks to offer the first home loan scheme, with 25 smaller lenders represented otherwise.
3. If you use Afterpay or a similar buy now, pay later service, your bank could reject your home loan. It’s another part of the government’s new responsible lending guidelines, which also encourage banks to ask about other examples of discretionary spending like streaming service subscriptions and private schooling. Interestingly, the guidelines explicitly describe Afterpay and their ilk as “unregulated credit”.
4. Eyewear brand Oscar Wylee is in hot water with the ACCC over its ‘buy a pair, give a pair’ initiative. You’ve almost certainly seen the ads: for every pair of glasses you buy, the company is supposed to donate one to charity. Well, maybe not. Despite selling more than 320,000 pairs between 2014 and 2018, the consumer watchdog alleges only 3,000 pairs of glasses were donated.
5. McDonald’s Australia has taken over two restaurants in north-west Victoria after a video went viral showing one of the company’s franchisees harassing an Indigenous artist. Artist Robby Wirramanda filmed his neighbours Karen Ridge and Rob Vigors on his property verbally attacking him and trying to pull down an Aboriginal flag hanging from the side of his house. The company confirmed it had ended its relationship with Vigors in a Facebook post.
6. Sydney’s much-vaunted CBD light rail is now officially operating… but it’s very slow. The new trams left some scratching their heads over the weekend, as the average travel time between Randwick and Circular Quay was about 50 minutes – not great when existing buses can do it in 35. The transport minister, Andrew Constance, says the trams will get faster as people get used to boarding and alighting them, and as traffic flows are better optimised.
7. Find yourself perversely curious about how Boris Johnson celebrated his landslide victory last week? Allow me to indulge you. Apparently, he enjoyed a glass of wine and attended a Christmas party with Mick Jagger and Princess Beatrice. Ho hum. How droll.
8. A group of Democratic primary candidates in the US are threatening to skip the next official debate over a labour dispute. Campus food service workers at Loyola State University, where the debate is being held, are on strike after contract negotiations for better wages and healthcare broke down on Friday. Five candidates have threatened to pull out of the debate in solidarity with the workers.
9. Our friends in the US have pulled together a list of the top 10 brands which blew up with Gen Z this year. There are a few obvious ones which are reflected in Australia – like Uber – but a few of them, like hard seltzer brand White Claw, might point to forthcoming trends here.

10. If you’re keeping an eye on the upcoming battle between the next generation of Xbox and PlayStation consoles, it’s becoming clearer and clearer the two will offer almost identical performance. Both consoles are running on almost identical specs, meaning the real battle will be software and the exclusive titles they manage to score.Best Regards

Linda 琳达珍 and Carlos Debello (LREA)
LJ Gilland Real Estate Pty Ltd
Linda Debello LREA推荐LJ Gilland房地
http://ljgrealestate.com.au/testimonials/

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