Property the “hottest investment class” for the next five years: Mark Bouris
By Larry Schlesinger
Monday, 03 June 2013
Investors should get their foot on the property ladder now while interest rates are low and heading lower and as the property market heats up, says Yellow Brick Road founder Mark Bouris.
“I think right now and for the next five years property in the major cities will become the hottest investment class you can possibly think of,” Bouris said in an interview on Channel Nine’s Saturday breakfast show.
Bouris expects the RBA to cut interest rates even further – below 2.5% – with borrowers getting bank mortgage rates at historical lows of between 4% and 4.5%.
“What [these low interest rates do] is reposition house prices upwards,” Bouris says.
“From now until about five years’ time house prices will go up quite a lot and it’s a good time to take the opportunity to invest in real estate.”
Bouris says you don't want to be entering the property market in five years’ time when you are paying the top price.
According to Bouris, property investing is a “cycle game”.
“You need to get in while the rates are coming down and make sure you are not paying the top price.
“Everything in business or investments is all about your entry price or purchase price,” he says.
Link – http://www.mlforum.com.au/investors/property-the-hottest-investment-class-for-the-next-five-years/
I would tend to agree with this. As the economy strengthens in 2014 I would expect the property market to recover. I think Brisbane offers a lot of opportunities because I have felt for some time that the market is undervalued to the tune of around 10%. BS shrapnel view is Brisbane will recover to the tune of 17%. Thats not unsurprising. I also think that Melbourne will grow well with one exception stay away from the inner city apartment market. There are 1000s of small apartments coming out of the ground in the CBD and surrounds. Either buy townhouses or older apartments in inner city areas.
I think many other states will start to recover next year. The fact remains that the best time to buy is when the market is flat and at the bottom of the cycle not when the market is booming. I am seeing the same thing occurring in the United States with hedge funds buying a lot of the available property on the market. If you are considering investing in property do not get put off by negativity at the end of the day if you wait a few years you will regret it. However as always it is important to do your due diligence carefully as it is easy to lose money in any market if you dont do your research carefully
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
I'm going to sound Freckle'ish on my next statement .. but its about time someone said it in this context.
Australians have been brought up with the concept of a continually incrementing property market as something that has existed for as long as they can possibly remember.
And yet they forget the key fundamental of any property market. The one that I keep on harkening back to .. the one that I think remains most important.
Any property area, any basic property construction, any commercial zone .. any business area, NEEDS TO REFLECT THE EXISTING MARKET AROUND IT.
Its what I saw in the Gold Coast in 1994 and really had me kinda stumped. That they were building MULTIPLE million dollar plus apartments and expecting them all to be snapped up overnight. Here is an insight – a million dollars .. is STILL a lot of money .. despite inflation .. and despite the Gold Coast being desireable anyway.
Now .. just because you have a low interest rate doesnt mean you are any more safer. The major problem is .. people GEAR themselves towards a lower interest environment. Thats exactly what happened in 2008, and if its left unchecked here .. WILL happen here .. because people will gear to the max (as you would) based on low interest rate figures and not being able to support higher rates.
But .. the fundamentals still remains. Property cant be driven up into the stratosphere if there isnt a tenancy that will pay for the supporting rental equivalent. Once you introduce pie-in-the-sky figures into your rental sheet, guess what people do? ITS A MARKET .. they go shopping elsewhere. They rent in upper country woop woop .. so they can have their rent and still survive on Centrelink. They move to outer Cranberry Nook .. so they can eat as well as pay their rent. The upmarket professionals wait that extra 20 mins in peak traffic so they can enjoy the sounds of the country and support their lifestyle without stress.
As a property investor for over 25 years already .. and a very successful one at that .. I would suggest that the interest rate should NEVER be your pivotal concern in making the real decisions. It should be .. what you will get .. and how reliable AND REALISTIC that is as an investment in the longer term.
This from a person who STILL shuns the mining rental markets in all their shapes and forms .. and warned several investors off it from the beginning.
xdrew wrote:I'm going to sound Freckle'ish on my next statement ..ROFL..
As things stand we're not far off taking a hit here. When interest rates are being forced into the floor then you know things are much worse than they're letting on. The government is about 2 years too late in developing fiscal policy to manage the resource wind down. Anything the government does now to support the economy as we adjust is more than likely to lead to a weaker economic outcome if overseas experiences are anything to go by.
The best any PI could hope for looking down the track is that we don't get a knee jerk reaction somewhere that triggers a serious collapse. A managed correction even if it is negative is far less damaging. I'm not confident that will happen though. We're at a point now where the hairs are starting to stand up on the back of my neck.
I'm going seriously defensive on everything primarily because I think this thing has the potential to go very wrong in every sense. I hope like hell I'm wrong but the last few years just keep reinforcing what I though was a vague possibility several years ago.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
