….Share markets had fallen from 6000 points to 5000 points …Negative Super returns are delaying retirement for those approaching what was supposed to be the best most relaxing years of their lives…What do we do now?
Despite how many sources out there may show you ways to secure your future and lead a dignified retirement, it only takes one daunting article to send novice investors back into hiding.
A year will pass, than 2… the property prices rise as they have for the last 107 years… and the typical remarks would be a nervous… “It’s coming back down” OR “We should have done it!”
It’s only human nature. We can’t be too hard on ourselves. It’s common to meet potential investors who put themselves off investing because they focus on what could go wrong. This why the majority of wealth is held by a minority of the population. The minority who choose to save, focus on the potential gains and invest in their future.
How many of you have heard this latest daunting news? “House & units prices headed for 10% fall.”
How many of you actually believe it will happen to every single property nationwide?
Fortunately, Melbourne and Canberra apartment values held up. Melbourne rents did not increase in the last 3 months but it had experienced double digit rental growth with inner city rents jumping 17% over 12 months. Also, we don’t need rents or growth to be surging every single month to qualify it as a good investment.
The ABS has reported that BUILDING approvals eased 0.7% in June and is 7.8% below when compared to the same period a year ago.
We have also been informed by the ABS that Melbourne is having a population surge of over 1500 a week! So poor supply and increasing demand equals?
The question is…where are these pockets that are less volatile.
The performance of your property investment portfolio depends on where your investments are, how they are financed, the tenants they attract, the tax you pay, the vacancy potential in the future and so many more crucial factors to consider.
A mere general market opinion or statistic does not tell us enough to make an informed financial decision.
According Dr Shane Oliver, a chief economist at AMP, we have reasons not to get too gloomy despite the detriorating US climate that everyone is comparing Australia to.
There are 2 favourable differences between Australia and the US.
Firstly, while America has a housing oversupply, Australia has a huge shortage. Housing construction is currently running around 30,000 dwellings p.a. below annual underlying demand driven by immigration and natural population growth.
This is more than evident for anyone who wants to rent accommodation – capital city vacancy rates are very low and rents are rising.
Secondly, Australia is receiving a huge boost to national income from strong commodity prices. So the downside to the Australian economic outlook is nowhere near as great as in the US, UK and Europe.
This means that a massive round of delinquencies and defaults and hence forced selling is unlikely. These considerations suggest that a 30% fall in house prices is unlikely. But small falls are likely in some areas.
A shortage of housing, a huge boost to national income from commodity prices and higher lending standards suggest that a US style collapse in Australian house prices is unlikely.
He did suggest prices will fall. What does this mean for property investors? Well some prices are already falling, some are growing, some remain stagnant.
There are so many industry segments to consider here; from commercial to residential to industrial. 1 bedrooms, 2 bedrooms, townhouse, house and land packages etc. They all need to be studies individually to assess their viability as investments. It also depends on your existing portfolio’s mix.
The Simple Solution? Klear Picture educates clients on how to select the right investment propert/ies for their personal financial circumstances and goals. We help you manage and control the level of investment risk you wish to endure, how to read the market, how to make LOGICAL investment decisions based around your ability to save.
Despite property values falling in some sectors, there are still properties that are continuing to grow well above national averages. It’s knowing where to find them, knowing what pitfalls to allow for and how to AVOID INVESTMENT RISKS.
Relying on general free market data gives us little hope of accurately identifying an investment’s potential performance or how it will affect your potential retirement income stream.
Have a chat with Klear Picture about how you can easily minimise property investment risks. Get facts and figures on high and low risk investment strategies. Tailor a retirement plan to suit your personal goals, instead of listening to what everyone says you should be doing.
In my opinion, property investing with accurate thorough due dilligence can mitigage many of the risks associated with even buying a home or leaving money in super!
Many people I’ve helped used to comfortably donate tens of thousands of tax dollars without question… Having helped them to implement ways to work smarter with their earnings, they’re now enjoying as much as 30% savings and more in tax. They are also able to look forward to retiring 12 to 20 years earlier!
You too could be astounded and wish you met us sooner. Don’t waste another tax dollar or risk working an extra 15 years just to be able to afford to retire.
Call 1300 788 971 and start learning how to use your tax dollars to shorten your time in the workforce. You can still choose to work…at least its voluntary.
Successful Planning
Treasha
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