Congratulations, welcome to your Australian
Property Investor’s report. As an added FREE
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Property Investor online videos with market
wraps, commentary and investing tips. This
weekly video report you have subscribed
to is cleverly designed to help you achieve
exceptional levels of property investment
success, in fact, greater then you can imagine
right now.
We will provide you with access to not only the fundamentals of successful property
investing, but also teach you advanced strategies usually reserved for our larger
institutional investors in the industry. For example, did you know that it’s possible
to secure residential property today for a fraction of its value, maximise 100% of all
capital gains and you won’t need to settle on it for 5, 7 or even 10 years or more?
Did you know there are property investments that will often triple or even quadruple
in value in the same time that traditional property only doubles in value? Do you
know where the Australian growth hot spots of the future are likely to be? Do you
know how to secure multiple properties using just one single recycling deposit?
Do you know or do you have the ability to buy property wholesale that is discounted
and independently valued at 20% below market value? What about the knowledge
to generate cash returns of up to 36% per annum, mandated by state law using a 200
year old property based strategy, seldom taught in Australia?
In this report, we are going to share with you a brief summary of why every investor
should consider Australian residential property investing. We will also share with
you why many investors will fail to capitalise on the perfect storm of property profit
acceleration predicted over the next few years. Unfortunately, many will waste the next
5 years, only to regret it. So let’s get real about Australian property investment. First
and foremost, there are only about 1.8 million property investors here in Australia,
out of a population of 23 million.
Want proof? Look at the diagram below...
There it is… according to RP Data; Australian Tax Office records show the following:
• 72.8% of investors own one property…
• 18.0% own two properties…
• 5.5% own three properties…
• 2.0% own four properties…
• 0.8% own five properties…
• 0.9% own six properties or more...
Now let me ask you this…
How can anyone create any real Australian property wealth from just one or two
investment properties? Again… not likely. So how many properties will you need
to have in your property portfolio, to generate an income that will enable you to
experience financial freedom?
What may have worked in the 1980’s and 1990’s is unlikely to provide you with the
same results today and in the future.. As always, money is going to flow from the
uneducated to the educated.
You will either choose to remain financially ignorant or utilise the appropriate
strategies to take advantage of the current lucrative environment now and in the
years to come.
So what is stopping 99% of Australian’s from achieving their “Aussie Dream” of being
a successful property investor?
There are two main obstacles holding people back from
succeeding in property investing:
Fear and Knowledge…
Why is it that so many investors soar with incredible
success at the same time when others are overwhelmed
with fear?
The difference… specialised knowledge when
acted upon equals POWER…!
CURRENT OPPORTUNITIES IN AUSTRALIA:
Despite all the economic uncertainty emanating from Europe
and Japan, there is enormous opportunity for Australian
investors that have an action plan and astute knowledge to
secure their financial future. Allow us to share with you some of the reasons why
Australian residential property investment should be seriously considered right
now.
Firstly, investing in residential property is a wonderful hedge against inflation
and a historically safe capital haven from financial turmoil overseas. In terms of
economic uncertainty there’s usually capital flight towards safe assets such as property.
Australian property also has a solid track record of capital growth. While historical
performance is no guarantee of future performance, 200 plus years of supporting
data should not be ignored.
According to ABS statistics, both Melbourne and Sydney are predicted to double
to approximately 8 million people each, by the middle of this century. Every one of
them will need somewhere to live. The Housing Industry of Australia has informed us
that we are not building properties fast enough to keep up with the current demand
they predict. Shortages of at least half a million dwellings by 2020 are expected.
Basic supply and demand fundamentals
will therefore suggest that property
prices should continue to go up in
value over time. Furthermore, as
mining investment slows, Australia will
require other economic components to
contributetowards economic growth.
One of the obvious points to contribute
to that growth is going to be the housing
market, given that it is generally undersupplied.
Another unique advantage of investing in Australian property is that it’s both a
very large and imperfect market. According to RP Data, as of mid-2014, residential
property in Australia is worth more than 5.2 trillion dollars. To put that into
perspective, that’s far more than the entire Australian listed stock market at 1.5
trillion, Australia’s entire GDP (Gross Domestic Product) of about 1.6 trillion and
superannuation at 1.5 trillion dollars.
Now even if I added up the stock market, Australia’s GDP and superannuation price,
residential property still has enormous value. To make things even more interesting,
Australia doesn’t actually have one property market. According to the ABS September
data, within a sample of over 9 million individual properties in every state, in every
suburb and even on different block sizes on the same street, there can be large
variations in property prices.
Added to the fact that property owners have a wide variety of knowledge and
motivations when it comes to deciding on what price they will accept for their property
and it represents amazing opportunities for the Australian property investor.
However, for many would-be property investors, the sheer size of this market makes
it an extremely difficult process to master and this can lead to analysis paralysis.
They just don’t know where to start, what to do and therefore end up stuck on the
sidelines watching others seemingly make all the money. A little understood reason
why we love property investment is that players much larger than ourselves have a
vested interest in ensuring property prices continue to rise over time.
Both State and Local Governments directly receive almost half of their taxation
revenues from property tax in the form of stamp duty, council rates and land tax.
Similarly the banks are in the business of making money and let’s face it- they are
very good at it. The banks hold about 60% of their total assets in residential properties
via their loan book.
With the billions of dollars in profit they earn every year, they can afford to employ
entire departments of the best analysts in the business to ensure their assets are safe
and growing in value over time.
With Australia’s inflation rate also under control, we appear to be in a very low global
interest rate environment. Our low inflation rate gives the Reserve Bank room to
keep interest rates low or contemplate reducing them even further if unemployment
rises too high. That’s a real possibility for next year. In the wake of the tight 2014
federal budget, the aim is to maintain lower spending, keep inflation under control
and guard against the dropping of the Australian dollar.
Recently the big four banks all set their five-year fixed interest rate under 5%. So
given everything we have discussed, the banks have highly skilled economists and
analysts predicting the next set of interest rate data. Analysts foresee 2015 interest
rates remaining low and favouring a positive environment for property growth.
In June of 2013, Mark Bouris claimed that “Australian residential property will be
the hottest investment class for the next five years”. He says that with low interest
rates, it will reposition house prices upwards. According to Mark Bouris, house
prices will rise quite significantly from now and for possibly the next five years. This
will be an astute opportunity and time to invest in real estate. Australia is also a very
wealthy nation and well placed to take advantage of what’s being called the Asian
Growth Century. When times are tough it can be hard to realise how lucky we are,
but let’s put things into a global perspective.
Australia is a wealthy nation with an abundance of natural resources. With half of
all the global growth throtugh to 2018 coming from the Asia Pacific Region, Australia
is extremely well placed to take advantage of many of the emerging economies in
the coming years. In particular, China’s economic growth policies create a scenario
of over 400 million people relocating to urbanised city centres over the next 25
years. It’s interesting to note some of these staggering growth projections for China.
By 2025, there will be 221 Chinese cities that will have a population of at least one
million people.
Now, to put that into perspective, the entire landmass of Europe only has 35 cities with over a million people. Five million new buildings will be constructed in
China by 2025. By 2020, the Chinese middle class is forecast to double to over 520
million people. Now that’s almost twice the size of the United States of America. The real buying force is again with the upper middle class couples and families
who can each earn a few hundred thousand dollars.
They represent a huge market force and it’s predicted that 60 million buyers are
about to hit the world property market. The Chinese love Australian property due
to its strong history of growth and a stable economy. Additionally, many Chinese
want their children to study in Australia. Melbourne and Sydney still remain the
favourite market places for cashed up overseas property investors to park their
money.
A decade ago, self-managed super funds (SMSF) accounted for just 10% of superannuation balances. Today, that’s over 30% of the nation’s 1.6 trillion dollars in
super savings. Today, the SMSF industry continues to go from strength to strength
with more than 2000 new SMSF accounts being created every month and this
trend is expected to accelerate with over 500% growth expected by 2020.
Now this is obviously an area that requires
professional advice before you jump into it. But in
our opinion, the opportunity is too good to miss.
This opportunity is so popular and fast growing
that the Daily Telegraph recently reported on the
trend of one in every three investment properties
soon being owned inside an SMSF. Now to learn
more, we encourage you to read the free download
report on the opportunities and responsibilities of investing in a self- managed super
fund.
At this time, baby boomers are retiring enmasse and many are choosing to downsize.
They are leaving the suburbs for a sea change or to live in smaller properties with
easy access to the things that they love. This includes restaurants, theatres and being
close to family.
At the same time, Generation Y prefers to live closer to the city action, even if it
means only renting in these more dtesirable areas. This is compared to buying in
affordable areas that are shifting the types of properties most in demand.
Block sizes are also reducing and there is a significant shift towards higher density
living as Australia grows up, in large part, due to
the pressing issues of affordability. At Australian
Property Investors, we personally believe that in the
next five years, we could potentially see a tipping
point that forever changes the Australian landscape
and separates those who do own property from
those that will never own property.
There is also a shift in the types of properties that will provide the most growth
in the future and the educated property investors will need to rely on accurate and
significant research to profit from the changing times ahead.
To quote Bob Dylan… “Yes the times they are a changing”. As always, there will
be both dangers and opportunities when it comes to property investing. Money will
shift from the uneducated to the educated and over the next five years, some people
will become property barons and some will just remain property barren.
In life you can either settle for a small result or chase a big result. The choice is
yours. Some will succeed where others will fail. Some people just don’t have a big
enough reason why they want to become financially successful. Some are not willing
to take the time to invest in their education.
If you think education is expensive, try ignorance. Some individuals will have the
wrong people, with the wrong advice in their team. The quality of the people in your
team will largely determine your results moving forward. Finally, some people will
follow the wrong plan or in fact they won’t even have a plan at all. Our goal is to
provide you with the right education, the right team and advice, and importantly
the right plan.
At Australian Property Investors, we encourage you to explore this web resource.
Look out for the email with our weekly video commentary and Australian Property
Market Wrap.