You are very brave, I admire that

Sure a lot of people predicted it, but hey it didn't take rocket science.  Nobody really cares who did or did not predict it.  What I was trying to say is if your income is secure, what is stopping you from investing now compared to any other time?

This is Margret Lomas's view today 10/02/09;

"Statistics just released this week by the ABS shows that perhaps some of the analysts have been incorrect after all. As recently as late 2008, many of them were predicting spectacular falls in property prices, some saying it would be as much as 40%. Instead these figures indicate that lowering interest rates, a shortage of construction and an increase in rental demand has all resulted in an improvement in the figures for housing growth. While no area is really showing an increase in housing values, the big losses predicted by some economists seem to have been halted, for now at least.

During a recession people have less disposable income available, and so the first thing which suffers is investment back into the country. As unemployment ramps up, home ownership usually falls, and so the values of property become immediately affected.

While the dynamics of this economic theory cannot really be challenged, and plenty of empirical evidence exists to suggest that, in fact, our property markets will be greatly impacted by a recession, falling property prices should not be seen as a reason not to invest.

Recent data suggests that rental yields are increasing at the rate of around 8 per cent per quarter across the nation. While interest rates also continue to be cut, the natural effect of these two occurrences is that the gap between rent and expenses, especially after your tax cuts are taken into account, will continue to grow on many properties. As I have been saying for around two years now, the return to positive cash flow property has indeed already begun. For those who had faith in this forecast and purchased during the short period of time that cash flows were negative, the benefits gained from getting in early are now starting pay off with a reduction in, and in some cases reversal of, the negative cash flows that were accepted.

During our last recession, when unemployment tipped over the 10% mark, the country saw one of its greatest increases in rental yields, as more people were forced out of the buyer’s market and into the rental one. Put simply this means that, for those willing to buy property now, the chance exists to wait for the next growth phase without suffering financially in the mean time. Property everywhere will not do well however, and great risk still exists in many areas.

To work out where to buy, investors must be able to establish both the economic vibrancy of an area and the intrinsic growth drivers which may be in existence.

An increasing population in areas where little opportunity exists for new construction will place pressure on existing housing, both in the rental and the buyer’s markets. Where council is meeting its population growth with planned infrastructure to improve the lifestyle of those living within the area, the growth in resident numbers will continue. In areas where new business is thriving and services are all freely available within town, people will spend their money and work within the area, which adds further fuel to the economic engine. Where an area contains plenty of housing in an affordable price range, families will be attracted and subsequently grow with the area, laying down the foundations for a solid economic future.

Times of recession can also bring times of great opportunity to investors who are willing to commit.

Investing only during the good times is easy, but seeing the opportunities for what they are during the hard times takes courage. Be comforted by the fact that the costs will be small, worry less about short term growth and get started now before everyone else works out what a great time this really is to buy"

Then why say it, it is impossible to compare the two.  The stock market has a very different set of rules to property investing.

Nothing has changed it is still always a good time to invest in property.

Cheers,
JP

My opinion has not changed, this is just a bump in the road.  Things will flatten out for a while.  Towns like Moranbah will continue to prosper.  The mines would actually have to close and stop production completely before the shortage of housing would be stemmed in these areas.  Coal and Iron ore mines will not close like nickel mines have.  Unless China's economy crashes completely there will still be demand for our resources.

If we listen to the media the end of the world is upon us.  Basically they will say what ever it takes to sell papers etc.  The media are not well known for their honesty. 

Even with all the global economic turmoil China's growth rate is still predicted to be running at around 7 – 8% in 2009.  Even if it falls as low as 6% this is still a massive growth rate and demand for our resources will still be high.

Almost all of the cuts in the mining industry have been contractors on expansion projects that have been put on hold.  These projects have been put on hold not canned.  As investor confidence in the market starts to grow again through 2009 the resource sector will start to ramp up again and these expansion projects will come back on line.

We should be viewing this as a small bump in the road not a bust as the doomsday spruikers are predicting.  Smart investors will make a lot of money out of this little flat spot.

I have just signed up as a gold member.  I went with them after a lot of consideration.  They have been very easy to talk to and seem trustworthy to me.  They have been in business for a couple of years now and I can't find any dirt or bad press on them.  I haven't purchased a property with them yet but they have already helped me rearrange my loans etc. 

The reasons I went with them is that I had bought one property and had stalled there.  I am the type of person who knows that property is where I want to invest, I have read every book etc, yet still lacked the confidence to source and purchase properties.  I feel that if Cashflow Capital can help me purchase properties like I want to then the fee is worth every cent.  If you are confident to do the work yourself then go ahead.  But for myself I feel CFC is the way to go.

Cashflow Capital makes money by retaining customers and those customers buying more and more properties.  The way I look at it is if they were out to rip people off they would have been exposed by now and wouldn't be in business any more.

They are now as I speak sourcing two properties, doing the due diligence and setting up my finances so that I can start asap.  I have only been a member 2 days.  My goal is to buy six more properties by the end of 2009, if CFC can help me achieve that, then it is worth the fee. 

I will keep you up to date as to how things progress.

Cheers,
JP.