Chinese Buyers Not Going Away Anytime Soon We are often asked about the impact of foreign buyers, and whether it is distorting the market. Here’s what we think. Yes, foreign buyers are distorting some markets. In fact, we’re now seeing something we’ve never seen before in the Australian residential property market – developers supplying […]
Having and eating the housing cake
There’s a crisis of housing affordability, we’re told, but the figures tell us another story. Despite escalating house prices, around two-thirds of Australian households — comparable figures to previous decades — still own their homes or hold a mortgage. Yet an alarmist current is driving politicians to deliver populist and counter-empirical measures. In their […]
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The real winners of government hand-outs
The only winners out of first-home buyer grants are vendors and developers. Certainly not first home-buyers. The belief that hand-outs make buying easier has no basis in evidence. In fact, all the evidence shows these schemes are ineffectual in their stated aim. These grants make things tougher for house-buyers of any kind. Census data, aligning […]
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The problem is, we end up paying…
For all their egalitarian posturing, governments are proposing policy measures that will line the pockets of property developers but ultimately rip off the rest of us. In recent weeks there’s been talk about measures to make housing more affordable. One is the idea of inclusionary rezoning. This is a planning provision that can allow developers […]
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Regulating by stealth
How do you spin a political problem into a market one? You regulate by stealth. This is what the federal government seems to have done this year in a move that will punish some residential property investors. In the aftermath of the GFC, the government has faced increasing pressure to wind back negative gearing, strengthen […]
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Shhhhh… it’s off market
At a time of low-supply and market sluggishness, we’re buying more and more properties off-market. An off-market sale is one that happens under-the-radar without any public advertising. Off-market properties tend to have motivated vendors who are prepared to accept a lower price because they want a quick, discreet transaction with no marketing fees, a speedy […]
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Renovations are investments too
Low housing supply can make things frustrating for investors seeking to leverage on their existing properties. And at a time of cheap finance, it can make more sense to eke out better rental returns and capital growth by renovating. But renovation as a value-adding strategy requires caution. It’s important not to over- or under-capitalise. Finding […]
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Transaction
One of the fundamental elements of economics is the relationship between supply and demand. We are seeing this played out in the current Melbourne and Sydney markets. But beyond this things aren’t always so straightforward. Many factors complicate supply and demand. One complication affecting the supply side is the cost of transactions — a leading […]
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Car factory closures – A tale of two cities
Last week’s closure of Ford’s casting plant made Geelong property investors nervous — especially on the heels of job-losses at Alcoa and Qantas. The loss of manufacturing jobs from industrial heartlands can lead to ‘rust belt’ regions, characterised by declining industry, populations and economic activity. Rust belt effects were predicted for Geelong and also Adelaide, […]
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Strategy and tactics
When buying residential properties, we’re continually evaluating our mix of strategy and tactics. To borrow from military theory, strategy presumes control and predictable outcomes. On the other hand, tactics rely on on-the-ground intelligence, so they’re agile in the face of unpredictability. They’re constantly re-oriented for the situation-at-hand. One of our key strategies involves buying in […]