To worry or not….? I guess everyone has heard of the Terry Ryder article "worst places in Australia to invest" that was released this week. http://www.news.com.au/heraldsun/story/0,21985,23616347-661,00.html
We are very new to property investing and was wondering if this is something to stand buy, or just another personal opinion. As we speak we are going through the process on house and land in Lyndhurst, hence the worry and this posting. I guess what we are looking for is advice, thoughts or other opinions. Do we pull out, or ignore and keep on going??
Any honest advice would be much appreciated. One thing we have noticed is on Hotspotting.com.au there is a section with the TOP 12 Boom Towns which lists both Mt Isa and Darwin as boom towns, and they are also mentioned in the Worst Places to Invest (the article released this week?!) a little confusing.
http://www.hotspotting.com.au/index.php?act=viewArticle&productId=190
Any information, thoughts, or advice would be much appreciated.
Thanks
Hi Troy
I haven't read the article but I have read all the outcry over it! The article is just an opinion, albeit the opinion of a very experienced and well respected property researcher. I agree with what the newspapers have said about what Ryder has said about Mt Isa, northern suburbs of Darwin and Katherine NT. I did own property in all those places but sold them all in the last two years because they all have artifically inflated prices and low returns for the risk that they are.
I don't know the reasons why he has said not to buy in Lyndhurst but if you have not committed to anything yet, it might be a good time to step back, read why Ryder says to avoid Lyndhurst and think about whether that applies to your potential property.
If you have committed and you agree with Ryder then you have a couple of choices; get out as soon as you can (even if it is at a loss) or make your property stand out so that it is a desirable property in an undesirable area and people will want to rent it out.
One thing I can assure you of though is that Ryder's reports do affect the market. He is very influential and his reports are widely referenced. This report too will no doubt affect the market but I don't know which way. Either people with properties in those areas will sell out and prices will drop in those areas or investors will think that prices will drop so will all flood in to buy there hoping for further artificial inflation of prices. Either way, I'm sure that if you look at the property prices in the named towns in 12 months there will be an above average change in prices.
From what I gather, in some areas Ryder talked about crime, social problems and pollution being main reasons not to buy there. To me, that would influence my decision as to whether I wanted to live there, but you have to remember that people will need to live there because that is where they work, so they may well still be good investments because there will be tenants (who may read the report and decide not to buy there but just rent, thereby pushing up demand for rental properties, increasing rental returns).
I think I may have given a very convoluted response but I have an 18 month old sleeping and squirming on my lap while I type!
I guess what I am saying is
1. read the report (not just the newspapers comments).
2. take it all on board because Ryder is a very experienced researcher
3. decide whether you agree or not.
4. Go to Lyndhurst (if you don't live there already) and look around for yourself and ask questions of the locals
4. If you don't agree with Ryder just continue on with what you are doing and feel confident with your decision to invest there
5. if you do agree, then try to make your property a point of difference that tenants will want to rent.Good luck
K
Many thanks for your advice K.
We received advice from our solicitor a few days prior to seeing the Newspaper articles that the finance for the purchase on the land had been approved and the sale is now unconditional so I'm not sure how easy it will be to get out of.
The article gave the main reasons to not buy in Lyndhurst:
"because it's surrounded by unhelpful neighbours including Victoria's largest toxic waste tip and very large industrial presence," said Mr Ryder, who visited Lyndhurst about a year ago."The fact that people are buying property there doesn't make it a good investment. People may be overlooking detrimental aspects or are unaware of what is being planned for the area.
"I think they are making a mistake buying in that area. I certainly would not buy near or around Lyndhurst."
There are more details in the attached article:
http://www.news.com.au/heraldsun/story/0,21985,23619776-2862,00.html
I'll take your advice and obtain the whole report.
Thanks again
Troy
TTB,
if you read the ryder hot spot report link again you will notice that its actually showing the results of hotspots terry picked up to 2 years previous as they are showing the recent growth. Hes making the point that these areas were recommended 2 yrs ago and this is the growth you mistsed by not buying his report and acting on it.. So if your chosen areas is on his Dont invest list but was a Hot spot 2 yrs ago then that would make sense to me.. its to late…. you misted thee boat.
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