Dear Steve
Property here in perth is on a parabolic trend at the moment with properties
in some outer suburbs being revalued on a weekly basis (Eg: Canning Vale). a
report in the West the other day was suggesting that a property in perths
lowest socio-economic area Balga 80k five years ago now 300k predicting
1Mill in 15 yrs.( hope fully i will be on 200 bucks per hour to pay for it)
There seems to be a great deal of madness in the streets with most people
predicting the moon is the limit.
From my research key locations appear to be worth their value being that
there seems to be little price difference between 8-10k from the city as
opposed to 25+k from the city. Cant figure it out.Currently have been to Brisbane looking around some of the inner city area’s appear realatively cheap compared to Perth.
Take Care
Freddie in the Wild Wild West>
> If you’ve been keeping a watchful eye on the property market then you’ll
> be aware that W.A. real estate has been boom-boom-booming. In fact, I
> heard a rumour that the powers that be are thinking about renaming the
> area to ‘The Wild Wild West’!
>
> While the press is pretty chockers with articles about how W.A. prices are
> rapidly rising, not everyone is convinced. For example, Bill Evans – ANZ
> Bank Chief Economist – suggested that a ‘day of reckoning’ was coming for
> residential property.
>
> The reality is though, what might happen tomorrow is an opinion, whereas
> what the market is doing at the moment is a fact. And while it’s wise to
> consider what may happen next week, month and year, you can only invest
> for today.
>
> Therefore, for those investing in the West, make sure you have a strategy
> that identifies an emergency exit plan. Be especially vigilant to manage
> your debt levels, and be cautious about starting a project now that may
> take over a year to complete, since the market may be very different when
> it comes time to sell.
>
> That last point is the sorry tale of many investors in the east… they
> bought a property ‘off the plan’ in the boom, but when the property was
> finally built, the market had changed and values had fallen.
>
> The essential message is this – irrespective of what the market is doing,
> never forget that the most essential aspect of property investing is not
> buying or selling, it’s the effective management of your money through all
> phases.Hey F2S,
Thanks for your post. By definition a mania exists when crazy things are said without any realistic basis.
Manias are a normal part of the investing cycle, but they cannot be sustained.
In recent times, manias haven’t been too hard to find… the internet stock mania, the property mania, those metal scooters… etc.
In particular, I remember looking for a home to live in in 2003. The market was white hot still, and as we looked at one property in particular, the agent said something similar to you – that the land would be worth $1m in the next five years!
Well, the mania is over and the same house just sold for less than it did back in 2003.
Manias can be very profitable, provided you manage the hype with some investing commonsense. For example, don’t borrow more than you can afford to repay, and don’t punch outside your investing weight (do deals you know nothing about).
No one knows when a mania will end, but it always does – sooner or later.
In short – make hay while the sun shines, but don’t bet the lot on a risky proposition.
Bye,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
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