So 60 Minutes really threw a cat in the pigeons with their sensationalist claims about "a 40% fall in house prices". I've debunked their arguments here, but the question then is, if the house price crash isn't happening, where are prices actually going? Now I could tell you some stories, but why don't we check in with one of Australia's leading property experts, Tim Lawless from CoreLogic. The short of it is, he just can't see a house price crash playing out: "Overall, it's hard to see a scenario where Australian housing values could fall off a cliff. For this to happen we would need to see a material about face in labour market conditions, a global shock or a material rise in interest rates - none of which seems to be a likely outcome at the moment." He admits there are
I try not to get too caught up on politics, but there's part of me that feels a glimmer of hope with Scott Morrison taking the big chair. Scott gets property. I don't know if everyone knows it, but Scott Morrison worked at the Property Council of Australia for 6 years. I think he was Chief Economist or something like that. Anyway, he must understand the importance of property in the Australian economy, the contribution property investors make, and I think that means we should expect solid support for the property market from Canberra in the months ahead. Indeed, in his maiden speech, he made property a key focus: "Menzies talked about the other things that were needed, you know, he talked about a 'comfortable home' and an 'affordable home', as important today as it was the
I've had a lot of people ask me what I thought about the recent 60 Minutes segment, provocatively titled "Bricks and Slaughter". Things like this come around pretty regularly, but 60 Minutes is an institution. People trust it. Which is why it's so sad that they chose to put such a sensational spin on the whole story. If you didn't catch it, they interviewed a bunch of industry experts and struggling home owners, and made the case that a property apocalypse is practically upon us, and prices could fall up to 40%! O.M.G! Anyway, there's three problems that I had with the whole thing that I want to highlight: 1. IRRELEVANT EXAMPLES 60 Minutes dug up three people who were struggling to make their mortgage repayments, as if they were somehow representative of the whole ma
One of the things you realise when you've been in the game as long as I have is that there are always markets within markets. So when the headline numbers are saying that property prices are consolidating, you learn to take it with a grain of salt. Sure, some properties somewhere might be on the slide. But there will still be suburbs experiencing strong growth. That's why we have such a focus on 'investment grade' properties at Cashflow Capital. These are quality properties in growth areas, at accessible price points, and in thick markets (markets with high turnover). Now some people might wonder why we don't get into 'prestige' properties. Isn't that where the big money is? And sure, you can make massive gains in markets like this. But you can also make massive losses, and
China needs us more than we need them. That might sound silly since for pretty much every export we have - the main buyer is China. And most times it's nothing but daylight back to whoever is second or third. And China's rapid urbanisation and massive commodity demand has lit a major fire under the Australian economy. It pretty much saved us from the GFC, and then sent property prices booming. And it's all about to happen again. Hey? The thing is, China needs us much more than we need them. Because the Chinese government is pretty much a one-trick pony. If the economy stalls, build more stuff. If the financial sector wobbles, build more stuff. If the stock market stumbles, build more stuff. Any time and every time the Chinese economy hits a stumbling
How long do you think it would take someone to get out of poverty? The answer: four generations. That's the answer for Australia at least. If someone is born into a low-income family, it would take four generations before their direct decedentís were earning the average income. And that's a miserable statistic, but we're actually doing pretty well. We're slightly ahead of the OECD average, and streaks ahead of countries like Brazil, South Africa and Columbia. What it shows is that the social mobility that capitalism promised us is a bit of a joke. This idea that anyone who works hard can get ahead and be a tech-billionaire is just BS. Where you are born has a huge influence on the trajectory of your life. If you're poor and work hard, the best you can hope for
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