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25.01.2022 https://www.corelogic.com.au//spring-hasnt-quite-sprung-re

24.01.2022 Housing price predictions - up ... or down? There is still a bit of conflict amongst economists as to what lays ahead for the Australian property market; do we see further drops, or will we see the recovery seen over the last few months (particularly in Sydney and Melbourne) to continue? The RBA, in its recent "Financial Stability Review", warns we may see sharp price increases, stating they expect the market will continue to recover. But, this isn't the only factor they are... taking into consideration. There are a few other significant factors or "drivers" in their outlook, which include the following: There has been a substantial drop in new housing approvals, as a result of the tightening of the credit supply for developers. This then means that the supply is restricting as demand is increasing. Further adding to this is the continued strong projection of Australia's population growth - further increasing demand. Even though immigrants may rent for some time initially, an increase in renters puts upward pressure on rents, thereby attracting investors AND possibly acting as a catalyst for renters in general to purchase. The other main factor we can add to an increase in demand is the longer a market has slumped, the increased potential pressure from the "pent-up demand" which occurs from market slow downs, as potential buyers sit tight to see what the market will do. As soon as the right market trigger or combination of triggers occur/s this pent up demand on its own can result in a very sharp increase in market prices. The CBA are also on board with the RBA's prediction, stating that they predict a shortage in the apartment market by 2020/2021. They cite their prediction as a result of the sharp drop in new apartment developments, also as a result of the credit squeeze. So, with the apartment market, will we see a shortage, or simply a reduction in the oversupply until the tighter credit restrictions relax. The market as a whole? Current indicators are promising for market recovery. However, economists and other economic forecasters never really know what that magical trigger will be as the catalyst for consumer confidence to ignite.

24.01.2022 Strategic and Supercharged property investing. At Avocado Property, we seek out that "Holy Grail" of investment properties. By using cutting edge technologies, and a team of highly skilled, passionate individuals, we are able to locate those ideal properties in suburbs around the country, just on the cusp of their boom!

23.01.2022 Property market conditions - better than 3 years ago. Are we ready take action? Regret. Here’s the thing. When we are faced with conditions that replicate the past, do we really take that action? According to CoreLogic’s Hedonic Home Value Index, the national housing prices are back to 3 years ago. So, statistically, we have turned back time. The national average is indicating that our house prices were back where they were 3 years ago. Is that not enough for us to take a...ction and benefit from this slight warping of time? Westpac has recently increased its LVR for property investors lending to 90% on interest only loans, so it’s clearly on the hunt for property investors. Our interest rates are the lowest we have seen in the average investor’s adult lifetime, so from a lending perspective affordability is at an all time high. We have also seen that banks aren’t necessarily passing on the full interest rate cuts to their lenders, arguable impacted on due to the fact that we remain with our existing lender, and are no-longer shopping around. Without sounding too much like an ad for Westpac (which this is not. I have absolutely no affiliation with them), what are we waiting for? A written invitation from the universe? Is this not it? So, in the words of Lara Bingle (yep, you know where this is going )

20.01.2022 An interesting article on banks and the latest RBA rate cut - why the banks aren't passing the full cut on ... https://www.abc.net.au//interest-rate-cut-not-pas/11565594

19.01.2022 ##Less than expected distressed sales## According to Domain.com.au, the level of distressed sales has essentially remained unchanged. Their article of May 21 states: While distressed sales levels remained very low overall, it was tourist regions in Queensland and resource-driven state economies such as Western Australia that were showing to be the hardest hit so far. ... Dr Nicola Powell, Domain’s Senior Research Analyst, states: As long as the economy bounces back, we shouldn’t see a high level of distressed sales, Domain’s article goes on to say that both the Gold and Sunshine Coasts have experienced a 0.6% increase in distressed listings to 5.5 for the Gold Coast and 3.4 for the Sunshine Coast. Gold Coast Residential Selling Agent, Aydan Mullin of Savills advises that some of his interstate clients are cutting their losses early and listing their properties. Particularly, those hit by a drop in hospitality and short-term accommodation letting. But, as the article does point out, there are always distressed sales, and so during these times it is essentially no different.

15.01.2022 ## Property Boom thru financial injections? I don't think so! ## No, this is NOT a stand-alone injection into the economy! I recently heard someone claim that a...s a result of the Corona Virus Stimulus packages, there would be a financial injection into the economy, which would result in a property boom. Many businesses have experienced a dramatic reduction in revenue or ordering to cease trade, resulting in the laying off of staff. These activities together see a massive increase in unemployment, which ultimately means there is a substantial financial reduction from the economy. So, let’s just take one of the measures, and put it into perspective. It’s expected that around 1 million people will lose their jobs. Let’s put a value on this, based on the average wage in Australia, according to the ABS, in 2019 was around $86,000. So, the total amount of wages now lost would be an estimate of: $86 billion. The real impact on reduced economic activity is by way of employment. So, if there is a financial economic reduction of $86 billion dollars, that’s $86 billion dollars of reduced expenditure within the economy, no rent or mortgages being paid with this money, no groceries being paid with this money, no travel, no restaurants, no coffees, no entertainment, not clothing, no furniture nothing! For every dollar that we receive in wages, we spend, let’s say, 80% of it. That then means that for every dollar we receive in wages, we spend $0.80. And, then, when we pay that $0.80 to someone else, they then spend $0.64 of that amount, giving it to someone else, and so on. So, that $1 of wages received, ends up financing around $5 in transactions. So, if we apply this to our $86 billion dollars in wages, it would result in $430 billion dollars in financial activity within our economy. So, by taking the $86 billion dollars of wages OUT of the economy, the net economic effect is taking $430 billion dollars OUT of the economic activity of our businesses. So, with the government then providing a stimulus aiming at those who have lost their jobs of around $15 billion dollars, this does not, by any means, come close to covering the shortfall of the $86 billion dollars in lost wages. There is still a $71 billion shortfall. So, NO! It is highly unlikely that we will see a property boom as a result of these stimulus measures! It is far more likely that we will see a drop in property prices, in accordance with the 20% (and some even say as much as 50%) predictions made by property economists.

15.01.2022 Pent-up demand is brewing!!! The interesting thing about the current pandemic is that it has now been around long enough for it to be accepted as the new norm.... And, although there have been a large number of ‘casualties’, and those who slip through the cracks, the generous government stimulus package has really softened the blow. But an interesting energy is brewing. Because we have been denied access to certain markets and activities, and our attention has been drawn to how to overcome our cabin fever, the services, products, markets and activities that we would have normally been undertaking, and that we now find ourselves missing, are generating an enormous pent-up demand. The initial fear has subsided, we’ve settled in to this new norm, and our sights are now set on what lays ahead. No-one really knows what that may look like, but there is a lot of speculation, based on historical patterns. Like many, my personal belief is that once the right stimulus in the form of a trigger occurs, (which may be a simple as easing restrictions), our economy will undergo a strong bounce-back. Why do I say this? Because, the longer we are deprived of our normal activities, the more we want them, which creates this pent-up demand, soon to be unleashed. We are hanging out to hand out with friends and family, whether that be in restaurants, in home entertaining, or whatever! Once these activities return, then there will be the flow-on, of groceries, new clothes, home décor, presents, car maintenance, home & garden maintenance, hair & beauty it just goes on! AND Travel! Oh, how we are all hanging out to travel! So, let’s continue to enjoy these once in a lifetime experiences for what they are, feel privileged for being ABLE to witness this unique phenomenon and get ready for the MAGIC!!!

14.01.2022 ## Sinkhole properties? No thanks! ## I know. You want to invest in property, but fearful you might buy a dud! That it might turn into negative equity, leavin...g you in a worse financial position than you were before you purchased it. A Sinkhole Property is one which has the potential to turn into negative equity. One that fails to take you closer to your desire goal of building wealth through real estate, but rather takes you further away from it. You know, even though it’s said that Australian’s have a love affair with real estate, it’s interesting that only 20% of us actually buy a property outside of our home, and not all of those are investment properties. They are also holiday homes. And, of those 20%, 71% only own 1 property, where only 4% own 4 or more. Now, we can also break down investment property ownership in another way, given of those investment properties owned, only around 25% are houses, and the other 75% are units. But it’s the houses that have the greater capital growth, given the capital growth typically occurs in the land, and not the value of the dwelling, which typically depreciates. What tha’ ? and of the houses being purchased, a large number seem to be new-builds or house and land packages, which although have good depreciation benefits. So, are a large proportion of these investment property purchases potential sinkhole properties? Property investing is a science. Done well, using the right principals, in the right areas, at the right buying time, the capital growth will certainly propel you towards your early retirement goals. But, it seems from these statistics that we’re doing it all wrong. So, let’s get more scientific about it, and buy where the demand for rental properties exist, to get your full benefits of capital gains AND cash flow!

12.01.2022 Australia is well placed to weather the storm better than the rest of the world ...

12.01.2022 In some areas of the country we are seeing a bounce back of the market. But, there is still an underlying expectation that pent-up demand is not clearing and continues to rise. Will the next rate cut (if there is one) be the one to trigger a market flurry and catapult us into a very steep market increase as we have seen with previous market cycles?

04.01.2022 Purchasing properties wholesale What is meant by wholesale purchases? No, it doesn't refer to a bulk purchase price, nor purchasing from a wholesaler who puts a different margin on it. Some people refer to purchasing property at wholesale prices when you purchase a property which has the potential to actually do something to it to increase its value. For example, a renovator, or even a subdivision. By applying a property improvement strategy to increase the value, thereby ...increasing your equity. But ... what you need to watch out for it that you don't overcapitalise. By spending more than the potential capital gain to get that capital gain, then defeats the purpose of undergoing the capital gain in the first place. So, always do your sums first! For those with a preference for value-adding to their investment properties, Avocado Property can search for such a property, using our Supercharged, High Performance search criteria, enabling you to gain even more capital growth from your strategic investment. Call now for a chat on 0418-10-70-30.

04.01.2022 **Market Activity set to spring back to life!** According to CoreLogic’s Tim Lawless, the April figures of our housing market are looking pretty good! Most of ...our markets, nationally, have shown an increase in housing markets through April, except for Melbourne who has the highest net migration nationally, and Hobart, who has the highest proportion of workforce in the accommodation sector. Lawless says: An early return of economic activity should support a lift in consumer spirits, which in turn should see housing market activity sparking back to life Lawless attributes the factors Australian home values are insulated from a material downturn as including: > Banking leniency, limiting the flow of distressed properties onto the market; > Unemployment areas of the workforce that have lower rates of ownership; > unprecedented levels of stimulus; > Reduced supply; > Reduced demand; and > Record low interest rates Lawless says that one of the most important indicators to follow will be the measure of consumer sentiment, which will be a sign that consumers will be more able to make high commitment decisions, like buying or selling a home. So, is this a good time to buy an investment property? Well, that depends. Supply is tight, so you don’t have much to choose from. Demand is also low, so it kind of evens things out, and as Lawless says above, insulates the market from other factors, particularly with limited flow of distressed properties onto the market. But, if your purchasing strategy is sound, there is never really a bad time to buy investment properties. The important thing is that you have an investment ‘strategy’, and you continue with it. If by not buying a property at present means that you won’t end up buying a property at all, then there is a flaw in your strategy. Australia is made up of so many different property markets. If we take a look at our graph above, we can see that even in these challenging times, where market activity is insulated, and essentially put on hold, there were markets that soared during April. So, those who purchased into those markets would have made some really nice capital gains. Not only do each of our capital cities comprise of separate property markets, having seemingly lives of their own, and not always being impacted by the same macro economic activity. But, within each of these capitals there are also micro markets. Potentially every suburb. Some suburbs can have flow on effects to neighbouring suburbs, but the micro market is alive and well. So, no matter what the economic condition, there will always be markets somewhere within Australia that will be booming, or just about to boom. How do you find them? By constantly monitoring the market, and each micro market within the macro market as a whole. What are we looking for? Signs that the market is on the upswing, but not yet a hot market. It can be a lot of work, but well worth the effort. Alternatively, we use our cutting edge artificial intelligence to find them for you, so you can supercharge your investment portfolio, even in these interesting times!