• 4 November 2019

Does Investing In Property Really Work...?

Looking back through my files, I see that there was an item in the Herald Sun in Sydney in May 2009 where the journalist queried the saying "property prices doubled every 7 to 10 years".   

He poured water on this and said that from his research "property prices double on average every 14 years".

The facts…

In May 2009 in Sydney, the average price was $530,000. 10 years later, by May 2019 had property prices doubled? Well, the average price then was $1,060.000. Yes, there has been a slight pullback since that time, and a recent gain, but overall, on average, property prices DO double every 10 years. But this has to be qualified.

Prices set high….

The law of supply and demand. In Sydney the population was rising at over 120,000 a year for each of those 10 years, pushing up the demand, but APRA had squeezed supply, giving us what I termed at the time, (2015) an APRA price boom. In 2014 ABC's Allan Kohler's comment on the budget was "In May 2014, I pointed out that the budget did nothing to ease the housing shortage so there were others predicting a 'spurt to property prices' one was Kevin Young, who runs something called the Property Club, reckons prices will go up 20%, but he would say that." As we now know prices DID rise up to 14% 5 months later - and hit 19% by the year's end.

But Watch Out…

This growth is not reliable. It is subject to the above factors - supply and demand (see my banana story). For example, if you compared the Sydney period between 2004 and 2014 property prices had definitely not doubled; in fact from 2004 to 2011 they were flat.

This precise scenario prompts me to recommend investing in that market, despite everyone else saying "Why would you buy there!!?" Obviously that is the right time to make your move - when the upward cycle is about to begin again. A similar case to Sydney exists in South East Queensland. It's population rise was 90,000 but we still need more job creation. We have a do-nothing Government who is handicapped by having a policy of not leasing poles or wires, contrary to what NSW has done. That action turbocharged their economy, giving them an unemployment rate of half that in Queensland.

We have South East Queensland on a cautionary buy, subject to a lot of research. In the recent downturn nationally in property prices, the shortage of supply (see my banana story) showed up in the slight downward movement in South East Queensland. This augured well for a rebound - but when? Will there be a change of government next year? This government suffered, and for the first time tradesmen marched to parliament house, demanding more action to create jobs.

It is all a matter of bananas really, as you all know. That is why we maintain a careful watch on South East Queensland and have started a unique service. NOW we do not put up a list of properties in our windows like agents do, nor do we represent just one complex, as marketers do. NOW we are offering a tailor-made service. NOW, we will carefully assess what you REALLY, REALLY want.

We have a "Needs Analysis Form" that helps you better work out what you really really want, and then we get your own personal researcher to source it for you. NOW, for the first time in world real estate, you have a wide wide choice (or unique opportunity) to end up with something that suits you perfectly.

We will particularly be paying attention to where that property sits in the property cycle. We will also pay particular attention to the future cash flow on that property - a service we offer FREE. We will make every effort to ensure that you will not be like the 90% of property investors who cannot afford to accumulate any more than 2 properties, and still end up on a part pension.

For a wealthy retirement, to contribute to the economy you need 8 properties. How many have you got? Do you require help working out exactly what you want and need to be secure for the next 20 years? Simply fill out our "Needs Analysis Form" and our application for our financial independence date organiser print out. Email it back to us here! Elsewhere it would cost you over $10k to draft a retirement plan. Of course, in the Club, it is just one of the many FREE services we offer you.
Happy Investing,

Kevin Young | Club Founder & President

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