Like millions of other Australians you’ve probably heard, “the property market is crashing”... '
Or so they would have you believe.
You see, as most of us know, but seem to forget, the media LOVES a bad news story.
When you look at the facts though, it paints a very different picture…
Yes, undoubtedly, some parts of Melbourne and Sydney have seen steep price declines – but did you also know that some suburbs across greater Melbourne have recently experienced their highest growth in a decade.
Did you also know that a tremendous number of Major Regional Centers have exhibited tremendous growth over the past 18 months?
The graph below clearly shows the bold disparity between the “major capital cities” and some of our nation’s most populous regions.
Getting even more specific, I explored the claims made in a recent AFR article:
The fall in Sydney real house prices is close to hitting its average downturn decline at only halfway through the average downturn cycle, setting it up for the sharpest drop for the city since 1965, a BIS Oxford Economics study shows.
The average downturn for Sydney house prices is 14 quarters and the average total real price decline each downturn is 21 percent. The current downturn has progressed through six quarters to December 2018, but real median prices – taking out the effects of inflation – are already down 16 percent.
This could mean Sydney house prices have either dropped faster than average downturn cycles – five cycles since 1965 were analyzed – or it could bode tougher times ahead with more price falls to come, BIS Oxford Economics’ Angie Zigomanis said.
Sounds pretty rough right, but check out the graph below which analysed the nationwide Peak To Trough declines since 1982:
If you pay attention, you’ll note that we are the black line in the middle.
In the middle…
Hardly seems like we’re careening for doomsday.
Particularly if you cast your view wider and look at the indicators which culminated in a total market collapse in places like the US and Ireland.
The main factor in both of those cases was broad-scale financial sector collapse – something which no analyst is realistically seeing on the near horizon.
“Yeah, nice pictures” I hear you say, “But what’s the point?”
The point is that like Warren Buffet is famously quoted as saying “Be greedy when others are fearful, and fearful when others are greedy.”
Right now, the market sentiment, driven by sensationalist media, is causing a general downswing in property prices.
This presents an amazing opportunity for astute investors to grab some really fantastic assets which will help propel them to financial freedom.
If you couple this optimistic buying environment with the fact that many parts of Australia are in the midst of an infrastructure and jobs boom, you could truly be setting yourself up for a period of immense wealth creation for yourself and your family.
This is why we search the nation, looking at all of the key macro and microeconomic drivers in every council region, to ascertain which pockets represent the best potential to achieve 25% capital growth in the first year.
When we find those growth drivers, we then look for areas in which we can achieve positive cash flow, because after all, it’s cash flow that is going to take you on holidays (or service the mortgage for your next investment property!)
Taking it one step further, we then look for properties that have one or more value-add strategies with them – Renovate, Subdivide, or Granny Flat.
By taking this approach, we can minimize the risk, no matter what the market conditions, because we have manufactured multiple exit strategies.
Sounds pretty good, right?
But if you listen to the media, you might decide not to buy at all! Rather than taking an approach to maximize the results and minimize the risk.
If you want to achieve financial independence, and live the life you’ve always dreamed of, you need to take action.