Hi guys,
I have another topic to ask the experts here.
What are the driving forces of the property booming cycle in Australia?
Is that the flow of investors that move their money from one state to the other or the status of the economy of each state in relation to the whole country?
Is the booming cycle happen all the time or in some years it is unpredictable?
Knowledge is Power so I just want to know as much as possible and also sharing the information with other newcomers like me.
Best wishes,
FF
Hello again FF,
Property booms are mainly driven by economic factors and supply and demand issues. Interstate migration and foreign country immigration also has effects.
Australia has an overall cycle but each state/city town and even suburb will have it’s own subcycle. Look at what’s happening in WA (boom) heavily influenced by the resource sector success and SE QLD market (bottom and rising).
There are general principals that you can use to try and predict booms however there are so many variables involved that you can never be 100% sure. If you go to my reports page and look at the National 2006 Herron Todd White (independant valuers) report, you will be able to see where each major town is in regards to the property cycle.
Hope this makes things a little clearer.
Todd Burns
http://www.freepropertyhelp.com.auAs above, there are thousands of variables and sub-cycles within smaller areas but generally the national boom starts when good houses start reaching prices that the majority of people can afford, they move out of lesser houses and into these, starting the boom for that housing market, then appartment owners start buying the lesser houses and when they all become too expensive, renters start buying appartments. Within all of this, investors click to the boom and start jumping the band wagon, shooting the prices even higher, until the majority of people are maxed out on loans and everything else is too expensive for them to buy. It sits around for 7-10 years until people have paid down some loans, have enough equity in their homes and the prices start looking good compared to everything else. They it begins again as they all buy further up market once again.
In the end, it’s all driven by supply and demand no matter where you look. The key is spotting something thats going to create a low supply and/or a high demand in any particular area. no matter what the national cycle.
The national cycle is for the lazy investors who just want to sit back and buy houses in the major cities one after the other. It’ll make you a profit and it’s safe but you can do better if you know what your doing and know where to find the diamonds in the rough, outside the cities.
Go to Macquarie banks web site.
Down load the free property report called “the world squared” and read the section called “residential”. U will not be dissapointed.
Cabo Wabo
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