I am reading a lot of news articles about the current financial turmoil. Like all media hysteria, reports range from financial armageddon to flatlining for a few years.
Now I don’t change my investing strategy based on media, but it is obvious that storm clouds are gathering.
How can property investors invest for the best but prepare for the worst? If the more pessimistic scenarios play out e.g rampant inflation, does this mean those holding properties who are not loo highly leveraged and with sufficient buffers are ahead?
There just doesn’t seem to be any middle ground between ” business as usual” (although subdued), and “buy stocks of tinned goods and a gun”!
Thoughts, anyone?
I believe that in Australia the market has bottomed. For example if we look at the Brisbane market in my view it is undervalued by around 10%. I think that after the state election in March Queensland will get a change of government and as such I think we will get a jump in Property values of about 10% by the end of 2012. Again I am suggesting that this will apply to inner city Brisbane rather than the wider area.
In terms of other markets Melbourne will remain solid. It also depends on what is your strategy. If it is buy and hold then its a safe bet. Personally I prefer inner city areas of major cities I also think that mining areas can be good as well
I think when we are talking off shore it is unlikely that we will see any real improvement in the US market before 2015. However markets such as Texas remains strong
Nigel Kibel | Property Know How
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My opinion – for what it is worth.
I suspect we are in for a 1/2 year period of little or no growth across the 'market' in the broadest sense of the word. As such 'buying off the shelf' through real estate agents and marketing companies will be a slow road to success.
Those wanting to speed things up a bit will need to look at adding value/cashflow strategies.
In an inflationary world, expect higher (perhaps much higher) interest rates, so if we get into that boat people will need to be in a position to handle increased repayments, be that from income, or from reserves. I've been reading a lot lately too, and I'm darned if anyone can tell if we're going into a period of hyper-inflation, deflation, or just more and more 'flat'ness, so I guess being prepared for multiple eventualities would be key.
Invest where the jobs are, to put it simply. If you're buying property near where people are earning good incomes, you will always have a supply of tenants and there should also be demand for sales.
If interest rates go up sharply then this will hurt affordability and possibly see a longer period of stagnant prices.
But current view is for interest rates to go down in the short term.
I'n my opinion, it's best to be critical of all the media hype you read about. Use your own judgment and your own set of criteria when determining how good or bad a market really is. Also, consider learning investing strategies that can make you money in both up times and down times – that's how you can make money confidently in any situation.
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