Yes, I know it’s a weird name, but basically the seminar was about real estate trends and forecasts in Australia.

The people that attended this event were the ones who were at the pointy end of the real estate pyramid, and that is listed property development companies like Stockland, Mirvac, government officials, major banks… you get the drift.

Most of the event was pretty boring, but there were certain talks and information that is relevant to anybody interested in real estate. I thought it would be appropriate for me to tell you some of the things that were discussed there that would be of value to you.

This is a continuation of yesterday’s theme of the biggest trend going forward.

If you haven’t read it, I suggest you check out Tuesday’s email.

Here’s one of the highlights of what I learnt at the event.

There is a major push to create smaller houses in Australia. However, culturally we’ve developed a “massive house” mentality simply because of the large land mass that we live on. No shortage of space in Australia, so big has always been better.

Looking at the statistics, the average size of a new house in Australia is 260 sq. metres which equates to 83 sq. metres per person on average.

Compared with 68 sq. metres per person in America and much smaller spaces in European countries including 32 sq. metres in Britain.

Now, you’re probably thinking that both of those countries went through a serious property crash of late. Yes, that’s right. But I’ll discuss the reasons for that as we move on.

So you can see from the overseas trends that smaller houses are the norm, and it’s also one way of keeping affordability down.

This is what many State Governments are pushing for Australia-wide. Smaller blocks, smaller houses, no backyards. Despite this, we have councils that aren’t setup to follow this trend which is providing an opportunity for you and me to make money from.

Keep reading to find out how…

Considering that immigration isn’t going to change much going forward, this trend is likely to accelerate in the next 5-10 years.

Here’s something else that came out of the conference, the constraint on development approvals.

We must move to smaller housing, suits our infrastructure spending – but the lines to get things done are growing longer and longer by the day.

The waiting times for a VCAT application to be heard is 9 months. Only months ago it was 60 days. Now you don’t have to go to VCAT to get a permit to develop, you can do that through the council.

Typically it’s a 60 day turnaround if you do that, however all of my applications are heading off to VCAT. Now I wont go into the reasons why in this email, but if you’ve ever dealt with the council or done any form of development yourself – you’ll know the answer to that.

So what do you think will happen to real estate prices in the next 12 months if there is such a constraint on supply?

Well, they certainly wont go down – that’s for sure.

Here’s a thought…

If you could work out which councils have the longest wait for development approval, you could almost guarantee capital growth in that area. I’m attempting to find out how to get access to that information – I’ll let you know if I’m successful.

For me, this is a clear trend on where I should be investing in the future. I’ve spoken about this before many times.

But I know there are fears and doubts…

The biggest concern that you might have at the moment is that we’re in a media-driven property bubble and you fear prices crashing… I say media-driven property bubble because every time you pick up the paper, there is sure to be a negative story on how the property market is running out of steam or about to come crashing down.

Here’s why I don’t believe any of that rubbish…

To have a serious fall in house prices, you need the following:

• Significant deterioration of the employment/labour market. We’re at about 5% unemployment which is around the historical low.
• A credit crunch. We already had one of those and we buffered the storm brilliantly simply because we were not exposed to the type of loans that were available in the Northern Hemisphere.
• A rapid tightening in monetary policy. To a degree this happened 18 months ago, but right now things are easing up.
• An oversupply of housing. The reverse is the trend in Australia. We’ve got a chronic undersupply in many parts of the country. Interestingly the State that has had oversupply has been Queensland and consequently it hasn’t participated in the current price increases.
• Massive interest rate rises. Yes, we’ve had significant rises in the last 9 months, but that’s coming off a very low base. We’re back to just below the average.

So you can believe whatever you want, but in 10 years time when you look back and scratch your head as to why you’ve missed yet another property cycle and everything is obvious to you then, it may be too late.

There is no point in theorising about these things and wondering “what if” – just get out there and see for yourself what is happening with a whole new set of eyes.

Once you get access to this type of thinking and information, you’ll probably see money-making opportunities that previously you’d drive by and think nothing of.

Signed with Success,

Jon Giaan
Knowledge Source

P.S. Get educated first and make educated decisions that will pay you back forever.

…but this discussion about slowing population growth is rubbish!

If either Gillard or Abbott want to slow how many people come in to this country, here’s what they have to do.

…put the brakes on the economy. They both know that – surely…

That’s right, they have to kill the goose that makes them look good.

So, it’s pretty easy to work out that that aint going to happen.

We will have probably more than 36 million people living in Australia in 20 years time. Currently, we’re at 22.4 million.

The reason why we’re getting so many people flocking to our shores is because we’re going through economic boom conditions. We need people to come here who are willing to work and are skilled.

Sure, we can get some of the Aussie’s to do it, but with full employment and a lot of lazy people on the dole, where are those folks going to come from?

Dick Smith said our solution to skilled migration problems is kicking some of those lazy dole bludgers in the backside… Dick estimates 4 million people who are called “functionally illiterate” can be trained to take on the skill shortage front.

Do you think that will happen? Did you even know there was a group of people in this country who are “functionally illiterate?”

Anyway, we haven’t always experienced massive migration. We fell away to virtually zero migration during the 1890′s, 1930′s, mid 1970′s and early 1990′s.

Do you want to have a stab in the dark as to why?

Pretty easy, aye?

All of those periods were tough financially. Most were recessions.

But again, the media hypes everything up and get’s us all worked up when we see the illegal immigrants on frail boats entering our country and branding them as queue-jumpers.

Do you want to know how many of those there are?

3,500 annually.

Nothing really.

We’ve got 42,000 people who arrive in luxury using Airbusses from all over the world who overstay their welcome of 3 months and settle here for at least a year.

…many of whom find their way to permanent residency.

So my friends, growth is going to happen and that will lead to strong financial opportunities if you just stopped listening to noise and started thinking about what’s really going on.

I’m not just talking about opportunities in real estate, they should be obvious to you. We’re struggling to cope with the influx and way behind on supply.

Don’t think anything is going to change in the next 10 years… Good times ahead.

The stock market and equity markets will continue to prosper as well.

New businesses that know how to identify hungry markets and not follow the traditional path of heavy capital intensive infrastructure setups will also make big bucks out of our expanding population.

Whilst the retail figures were flat recently, the labour force figures that came out last week showed that employment growth is now running at more than 3% a year, which means 340,000 new jobs were created in the last 12 months.

What does that mean?

People aren’t spending… They’re saving.

This is a world-wide phenomenon, not only is it happening in Australia but it’s happening in greater percentage increases in places like the US and Europe.

When the confidence really comes back and folks start putting their hands in their pockets and spending, we will see another massive surge in all markets.

Some of you may agree with this… Some of you may not.

I read lots of contrarian views that say the complete opposite. Some of these guys have been talking down the property boom for 3-5 years now. Whilst others have simply made hundreds, maybe even millions of dollars in the meantime.

I’m one of those. I hope you are too.

The immigration at the moment is just a political smokescreen. Neither party will be in power long enough to be able to make dent – and in any case, it would be political and economic suicide if they were even serious about it.

If you’ve read this far, you probably have a view. You can respond and jump on your soapbox below. Go there and have your say…

Have a great weekend.

Signed with Success,

Jon Giaan
Knowledge Source

I certainly am.

Reading all the headlines, you’d think we’re on the cusp of a property crash and diving into another global crisis via a double-dip recession. Run for the hills!!

Add an election to the mix and you’ve got a recipe for massive procrastination.

So what can we make of it all?

Let’s see if I can help…

I think the Reserve Bank of Australia went way over the top with its interest rate hikes. We went from a 3% cash rate to 4.5% in just 6 months.

This was a massive 50% increase and the most aggressive in the western world.

So why did Glen go so hard?

He had eyes only for the property market and the only way he could stop it was by using interest rates as his evil weapon against his perceived property boom.

He’s thinking was… Slow down the property boom and we’ve got a chance at improving the housing affordability of everyday Australians.

Since his crusade 6 months ago, he succeeded in putting a pause on property prices, but only after 6 months of solid real estate gains in most markets.

…and this week, we receive evidence that is he has also killed affordability with the following headline, “New Home-Starts Fall a Further 5.2% in June”

Some uneducated investors see those type of headlines and think we’ve got a serious problem.

Here’s what I think…

The down-turn in new home sales is by and large the product of the end of the government stimulus for first home buyers and the increase of interest rates, which has led to the following problems…

The lack of available land… Chronic lack of development finance leading to a lack of development activity… Council planning regulations taking far too long to release projects… Infrastructure delays in new development areas.

All of this will mean one thing.

That the housing shortage will continue to increase and prices will continue to push upwards… and the people most disadvantaged from this are the ones that the RBA boss, Glen Stevens is trying to help… those who are trying to buy their first home.

So all the shenanigans going on right now will push the expanding population into the rental market.

What does that mean?

Rents will significantly go up in the next 12-24 months.

Great if you’re a property investor, not much good if you’re a tenant.

So what I’m saying here is that there will be no property crash – full stop.

What we’ll see over the next several years is single-digit growth across many markets and if you’re smart and savvy within certain markets, you’ll be able to achieve much better than that.

You see, when most of the stats are quoted, they’re typically an average of all markets. So if we see 6% growth on average, it would not be unusual to have certain areas within property that have grown by 25%…

On the flip-side, some areas may fall by 10%.

That’s why I think you need to stay on top of your game, stay invested in areas that are likely to grow faster than others.

…research, research, research…

On another subject, and that is clearance rates, I often have a lot of fun with this sort of data… But here’s something you probably don’t know.

The clearance rates that the average investor seems to hang off every Monday morning reports only 20% of property transaction nationally.

That’s right, just 20%.

So does it really mean anything?

N.O.

Here’s something else that you need to know – all it really shows is people selling and buying.

12 months ago, we might have had a clearance rate of 55% with 400 properties on the market. In the current climate, we’ve got clearance rates of 67% with 900 properties on the market.

All this stuff is just noise to fill up newspapers and get your attention.

The macro picture (long term) is still so strong for property in this country that you’ll kick yourself if you sit on the fence again.

Interestingly, I was listening to professor Keen the other day and he is still ranting and raving about the 40% drop in real estate. The guy doesn’t give up.

He said that his initial prediction of a 40% drop was over a 10-15 year period… Not 2 years after the GFC hit. He was misquoted.

He also said that the fall would be from peak to trough.

What that means is, let’s say real estate has gone up 30% in the last 3 years since his prediction and it falls down by 30%, then Mr. Keen is right… Because real estate has fallen overall by 30% and it’s created a new peak and trough. (Economists are never wrong – they’ll find a way).

Confused, aren’t you?

It’s just more shenanigans by economists who are perhaps too close to the data for their own good.

My last point for today… What about a double-dip recession?

Here’s all I have to say about that…

It seems to me that everybody has almost guaranteed themselves that this is going to happen. From my experience, when the mainstream press and the man in the street are talking about a double-dip recession, then it’s likely not to happen and in fact go the other way.

Now of course in Australia, we never went into recession. And considering that I don’t think the global economies are going to go into a double-dip recession – I think it puts us in a good position going forward.

Just think contrarian (always go the opposite direction of the herd – most people are generally wrong).

They’re my thoughts.

Probably needs to be said, I failed high school, never did economics, wasn’t very good with maths, have absolutely no financial planning background – so everything I say here is basically my opinion based on my results (8-figure real estate portfolio, 7-figure stock market portfolio, 8-figure business).

…so please, before investing see a certified financial planner or follow the smart money.

That’s all for today.

Signed with Success,

Jon Giaan
Knowledge Source

P.S. So what do you think? Jump on your soapbox and let the rest of the Knowledge Source people hear your views below.

…and I think it’s seriously detrimental to your wealth creation plans if you let the journalists influence you into not taking any action.

Let me ask you a question…

Will property be more expensive in 5 years time?

I’d say that if you bought well located properties in most of the major cities, you’re pretty safe in regards to capital appreciation.

I’m always amused when I see people in the last stage of negotiation walk away from the deal because they might be $2,000 apart.

Does it really matter if you paid too much for your investment property?

Let me tell you a couple of real life scenarios.

About 7 years ago, a friend of mine asked me to come along to an auction, more from a point of view of moral support.

He was looking at purchasing a property as his principle place of residence.

The suburb was Ivanhoe, which is about 12kms from the Melbourne CBD (a quality blue-ribbon area).

I asked him what his limit was, and he said he was going to go up to $700,000 and not a cent more.

I’m always curious as to why people pick limits that are round numbers.

Anyway, the auction began in ernest and my friend, nervous as all hell got involved around the $675,000 mark.

Three bidders at that stage were competing for the property and the price quickly got to $695,000.

…Bidding slowed, and now there were only 2 left.

My friend and another couple.

I was interested at that point to see if my mate would stick to his original plan of only going up to $700k.

The bids were now down to $1,000 bids…

It was obvious to me that the auction was reaching its completion, and then something unexpected happened.

The young couple put in a $10,000 bid.

Hmmmmm… That certainly put the cat among the pigeons.

My friend turned to me with sweat consuming his brow and said, “Let them have it…”

It seemed to me that he was a beaten man. In the auction world, a big $10,000 bid like that is called a knock-out punch.

We’re now at $705,000, and remember, he was looking at this property from a point of view of a principle place of residence… So I suspect there was a little bit more emption attached to this than a run of the mill investment property.

He consults his wife of course, and they agree that they’re over their limit and maybe they should just give up.

He turns to me and for the first time asks me what I think.

I asked him how long he was going to keep the house…

He said, “Probably 10… 20 years.”

I then told him if he really wanted it, and he loved the area, then what’s the big deal if he paid $20k, $30k, even $40k more?

This seemed to reignite his enthusiasm.

I told him to put in a $500 bid.

Here’s why…

When someone tries to knock you out with a big knock out punch, the last thing they want to see is you still standing with a smile on your face.

It’s very cheeky, and an act of confidence when you respond back with a tiny bid after his massive attempt to knock you out.

The young couple came back with what they thought was the right thing to do, and that was a $500 bid.

My friend looked at me and said, “What now?”

…I said, make a $10,000 bid.

You should have seen his face.

I can only imagine the thoughts running through his head. Here we are at $716,000 with his previous flimsy limit of $700,000 and I’ve asked him to up the ante with a $10,000 bid.

Thinking… Thinking…. Thinking… and the auctioneer counting it down, I reminded him that this was a long term investment and in 10 years time it’ll be so insignificant that he’ll kick himself if he lost this auction for the sake of just $10,000 (or thereabouts).

With great doubt and trepidation he shouted out, “Seven twenty six!!”

You could see, even from our distance, the young couple’s face turn white.

They had nothing left in the tank and my friend’s actions proved to them that they would have to keep going and probably pay $30 or $40,000 more if they wanted the property.

The auctioneer counted it down and my friend had himself a brand-new home.

As I mentioned earlier, this was 7 years ago.

The reason why I tell you this story is two-fold.

He recently got a valuation on the property for $1.4 million, and to think he could have missed out on this deal for a mere $20 or $30,000 dollars.

Ok, he could have bought something else and maybe have made the same amount of money, but the reality is this was a well-located house in a better than average street in the suburb.

The second reason I’m telling you this story is that you can pay too much for real estate and still make a bundle of money if you have a long term buy and hold philosophy.

That’s why I find all of this current noise about property bubbles and whether it’s a good time to buy real estate really amusing.

You ask any pro who has been in the market for a minimum of 10 years about when a good to buy is.

…and he’ll simply tell you, “Whenever you can.”

So if you’re in a position to invest in real estate right now, then it’s a good time to buy.

Think about it, an extra $20,000 is around $29 per week in extra mortgage payments (based on 7% interest rates).

Now I’m not saying to you that you should go crazy and simply pay the asking price on any invest property, but if you like it and its well-located, then in 10 years time, think about… You’re not going to be upset that you paid $20,000 more.

Ok, when I say, “well located” – here’s what I mean…

If you purchase anything in a major city within a 15km radius and I can guarantee you that even if you pay 5-10% more than the market value today, in 10 years time you’ll be a clear winner.

Sure, everybody’s circumstances are different and I understand that sometimes there could be some issues with funding the extra $26 per week… However, it’s an investment in yours and your family’s future.

So the moral of this story is don’t be too concerned about what you’re reading and hearing in the media.

It’s all short-term perspectives.

The long-term reality is real estate will be more expensive in 10 years time.

..and what that simply means to you is the earlier you begin, the better it will be for you financially in the future.

Get out there and get serious.

Signed with Success,

Jon Giaan
Knowledge Source

P.S. Share your stories on our web site of how you paid more for property and sweated on it at the time… Only to find out that in time it was the best decision you ever made.

P.P.S. Or, tell me I’ve got it completely wrong, that you should always negotiate hard, follow your budget, have a clear valuation strategy, and that is the way to invest in real estate.

If you follow the markets, you would have woken up to the shockwaves that happened on Wall Street last night.

The Dow Jones was down an amazing 1,000 points in early trading!

The biggest ever drop since the 1987 crash.

WOW!

The good news though is that it recovered and ended up 350 points down at the end of trading.

There are not many days in the financial calendar where you would call a 350 point drop in a day a “good day.”

However, after the shenanigans of the morning, you’ll probably agree with me that yes indeed, it ended strong (bit of an oximoron, but true).

Reason for the massive volatility?

The Greeks, The Spaniards and The Euro.

So what?

Well, there’s money to be made with volatility.

My thoughts, closely monitor the Greek banks, there is a massive buying opportunity right now. You could double or triple your money.

Nah, not interested in that?

Ok… Sell off the Spannish banks.

Heaps of profit in that.

Even that’s too hard?

Do some technical analysis on the Euro and sell that off when it break through a decent support level (Don’t know what that means? Education, my friend).

Still too hard?

Last one…

Go on a holiday to Europe.

The Aussie dollar is up about 29% against the Euro… Which drives your holiday dollar a lot further.

Yes, it is the best time to go to the Greek Islands, financially, that we’ve had for over a decade. I’m thinking about it.

But closer to home, we of course have had our own dramas over the last few days, ever since Rudd, Swan and Henry came up with a new tax blueprint.

The word “tax” for me hold no positive connotations. I always get nervous, even when they say that they’re going to lower tax.

What I found interesting about the new tax blueprint was the massive effect it had on the resources sector all this week.

$14,000,000,000.00 (14 billion dollars) was wiped off on Monday after Ruddy announced the super resources tax.

Imagine if someone came into your home and said, “We know you’re making a profit, and you’ve got a decent surplus… We’re going to increase your tax by 40% because you’ve been good at making profits.”

You wouldn’t stand for that, would you?

But that’s what they did with the resource companies, gone in there and said, “Makin’ too much money… Give us some.”

There’s another group of people who go around doing that, they’re called the mafia. For them it’s illegal, but if a government does it, it’s ok.

But you’re probably thinking, “Jon, they’re big companies, they can afford it, we should get a piece of the pie.”

You know what that’s called?

Communism.

Ok, a strong word. Maybe we should change that to modern day socialism.

Here’s how the resource tax works…

They give with one hand a little, and take with the other a lot.

Ruddy justified the tax by saying that the royalty tax will be removed and this new super-tax introduced.

It might on the surface sound like a fair swap, but here’s how it works out.

If you’re a start-up business, and you’re not making profit, the royalty tax hurts because you have to pay it either way.

So the government’s thinking is, “We can help the new businesses get off the ground, become more efficient, and when they start making money they’ll be able to pay us more in the long term.”

It sounds like it’s fair enough – don’t you think?

Help the small companies in the early stages and get paid lots more when projects come into full production and fruition.

But companies aren’t stupid. Their agenda is to maximise profits, minimise expenses and keep shareholders happy.

Tax is an expense… and a big one at that.

Big companies aren’t going to take this super-tax lightly, they’ll do whatever they can to hide profit, pay executives bigger fat salaries, move their focus to overseas projects where the returns on capital are higher and by and large, Australia becomes the laughing stock of the world as our smart resource businesses sell out.

So nobody wins.

I think the boys in Canberra, if they’re not careful will cook the goose that is laying the golden eggs.

Ruddy’s already doing a back-flip on the super resource tax, quickly trying to patch up the mess that he’s created, giving excuses already and suggesting that he wants to work with the mining companies to figure out the best possible solution.

After all, the new tax blueprint was only a suggestion. It still has to be signed off in parliament.

But Ruddy put himself in the corner, didn’t he?

After that announcement on Sunday night, surely he would have expected a sell-off the next day in the resource sector…

If he says he expected it, then he’s personally responsible for the billions of dollars that shareholders lost through the early part of this week. I’m talking about every day Australians who have invested in the recovery and put all their hard-earned money back to work after the dramas of 2008.

I’m not talking about the fat-cat executives, they’ll make money whichever way it goes.

But back to Ruddy’s dilemma.

If he says he didn’t expect it, then that highlights how stupid the government really is to expect otherwise.

Either way, it was poorly executed and presented.

Knowing how the government does stuff through its advisory channels, it would have all been arranged behind closed doors with very little consultation with the industry – and based on theories and spreadsheets.

There is a thing called reality which works a little bit different.

I wonder how many people who are close to this legislation bought put-options on BHP on Friday afternoon..?

Their friends and families would have made a killing.

In time though, we’ll see how dumb politicians really are when it comes to light that potentially related parties took advantage of this information.

It’s called insider trading and you go to jail for that. But maybe politicians don’t, not sure.

So why am I telling you all this?

Well, you have to get smart about investing and keep your finger on the pulse. No point blaming the governments as to the reason you are poor or not progressing, or not moving forward financially…

It’s your responsibility to manage your own money and take advantage of quirks like these in the market.

Lots of people would have made money on Monday, a lot of money.

Simply by following some basic stock market principles and understanding how to make money when the market goes down using either options, futures or cfd’s.

Also, there’s never been a more important time in Australian history to make sure that you don’t fall victim to these socialistic acts of the Government, to steal the wealth of its citizens under the pretence that they’re making it a better place for all to live.

So be warned. I think this is the first of many attempts by the government to fill up their coffers with money they don’t deserve.

Your job is to get smart, grow your wealth and protect it like a hawk.

That’s all for today.

Signed with Success,

Jon Giaan
Knowledge Source

P.S. I’m of no political persuasion. Freedom of speech and the freedom to create the lifestyle of your dreams is what I’m working towards. All governments interfere… Some more than others.

P.P.S. I’m sure we’ve got some die-hard followers who want to jump on the soap box and have a bit of a rant and rave… Go for your life my friends, comment below.

“Buyers Retreating From the Market in Droves!”

Now, last time I looked we were in a property boom, right?

…and the last 12-18 months have been nothing short of sensational profit-wise, even if you have a small portfolio.

Yet, once again the newspapers and non-property investing journos spook the market with outrageous headlines like the one above.

So where did this headline come from? This headline lead to an article based on how many new loans there are in the market based on previous months measures.

“Victoria Slides By 12%, NSW Goes Off The Boil By 27%, QLD 25% and SA 29%”

Based on those figures, you’d be thinking that there has just been a property crash that hasn’t quite made the front page news.

…but the figures themselves need further investigation.

Let’s have a look at it.

Here’s what they relate to… New loans opened specific for properties.

The survey was taken by the Bureau of Statistics for February which highlighted the worst month for new home loans since 2001.

Just an aside here, I can remember 2001 really well. It was just after the tech-wreck. And maybe just a coincidence, the property market took off in 2001 and didn’t stop until 2004. It’s important that you have some historical information when you look at stats like this.

Anyway, back to the article’s prime focus.

In February, a mere 2728 Victorian first home buyers took out loans, down from 4206 in July before the phase-out of the first home owner’s boost and the Reserve Bank’s string of interest rate increases.

…but in the same article, a long way further down it says,

“The latest RP Data figures show Melbourne prices climbing at a blistering annual rate of 19 per cent and Sydney prices climbing 12 per cent.”

Confused..?

You should be. I would if I weren’t a seasoned property investor and understood how to read between the lines.

But let me help you out…

If you had attended one of our recent real estate events with Dymphna Boholt, you’d be able to answer this question yourself.

Here’s why…

Dymphna mentioned that certain areas were going to dramatically grind to a halt and even reverse in prices. Those areas are the ones that this article talks about.

It’s all of the couples buying their first home and taking advantage of the first home owners boost scheme. Now gone, hence the pull-back on new loans.

You see what happened last year was unusual with how real estate tends to move. Very, very unusual.

In normal cycles, you’ll start with inner-city growth and then ripple out towards the suburbs as prices get more expensive and people are pushed out of their first choice and of course settle for the next suburb out.

Making sense so far?

…but in 2009, thanks to the government it started the complete opposite to that. Inner city properties were slow and anything around the $400-$500k mark was on fire.

We of course saw that, and those that attended our events got a head-start on the rest of the market as to what was to happen next.

Let me fill you in…

All of the free money, plus the boost scheme stabilised our economy… Meaning that confidence grew, big companies started spending again and bonuses and promotions were back to normal.

With that confidence (and several other factors), the real estate market returned back to normal and the smart and big money came back in a big way.

What you’re seeing now is massive growth in most of the inner-city areas on the East Coast.

Blue chip properties are now on fire with the average clearance rate Australia-wide at 75%.

The outer-lying areas are flat and probably will remain that way for a while. It’s these areas that are more sensitive to interest rate rises, which will only add to slowing that market down.

Now I’m not advocating that real estate prices are going to continue at 15-20% growth per annum for the next 3 years. We know that is not going to happen.

…but, here’s what will happen.

We will see a consistent and steady growth of 7-10% per annum at least over the next couple of years.

Plus, certain areas will have stand-out performances based on the normal trend of real estate and the ripple effect of 20%+ capital growth.

So what does all that mean?

In the stock market they say the trend is your friend.

In the real estate market, they call it a property boom and spook everybody into doing nothing.

It’s time to ride the trend, but be smart about where you buy and what you buy.

Be warned, not all property is suitable for investors. In fact, only 10-20% of property on the market at any given time is actually worthwhile considering as investment-grade material.

I hope this cuts through the B.S. and adds a bit of clarity to your thinking.

Signed with Success,

Jon Giaan
Knowledge Source

P.S. I don’t just talk about this stuff, recently I signed an unconditional contract on a block of units in a suburb called Coburg. Do your homework and you’ll find this suburb is directly benefiting from the ripple effect I’m talking about.

P.P.S. Ok, you probably want to know the numbers… 3 x 2 Bedroom Units at $990,000… $330,000 each. The median for units in that area is $390,000. Don’t let people tell you that you can’t make money in a booming market.

Yep, I know it’s Saturday and I’m here at the back of the room at our last ever Cash Flow For Life event.

A friend of mine sent me this video yesterday and I thought today would be a great day for you to watch this.

I’m a pretty positive and optimistic person… But this short video inspired me.

Here are the things that I got out of it…

* Focus on making a difference.

* Represent an idea.

* Decide who you’re going to be.

* Protect your dreams.

…There’s more, and if you’re curious as to who has said these powerful words, you’ll be very surprised when you watch this.

I’ll explain shortly.

But the press is at it again with all of their opinions about the real estate market currently in a boom.

I talk to lots of people on a daily basis and many are hypnotised by the press, believing that now is not the right time to get into real estate – because prices are too high.

I’ll deal with whether it is or isn’t shortly…

It’s hard to sometimes go against the overwhelming tide of opinion, but that’s what you have to do in order to become successful.

The masses are always wrong…. So this is the time to stand tall and profit like crazy. If you’re willing to stand out from the crowd and go in the opposite direction.

There is a real estate monster out there, and let me tell you what’s not. It’s not all the B.S. and rubbish you hear about from wannabe economists, cleverly disguised as journo’s.

In fact, those guys are trying to cut down to size this real monster that was created about two years ago and will continue to grow for maybe even decades.

You’re curious now as to what I’m talking about…

Here’s how the real estate monster was created…

First, we had a serious economic catastrophe. That is well known as the GFC. The government had to react somehow, all the smart guys in the world were literally printing money and throwing it at the problem – so why should we have been any different?

Amongst many of the resolutions for underpinning our economy was the boost to the first home-owners grant.

The government knew well in advance that when they released the first home-owner’s boost there was already a real estate supply problem.

The only outcome when you increase demand and know that you can’t possibly supply, the price of that asset will go up. That’s exactly what happened, didn’t it?

I saw this early last year, and we’ve been screaming it out loud ever since. Some listened and profited, others sat on the fence and missed out.

…and there are people who sent me long-winded emails on how property was going to halve, the sky was going to fall down and we should all fill our pantries up with canned food for the coming depression… Seriously.

The government created this monster and fed it on a diet of free money.

So the boys in parliament have got a problem now, don’t they?

After putting all these people into homes for the first time, and knowing full well that the prices are likely to inflate – how do they go back now and unleash supply (which will deflate prices)?

There’d be blood on the street if this was happen and every new first home-owner would be a “lamb to the slaughter.”

Tony Abbott, who is probably not even across this basic economic analysis should be laughing right now if K-Rudd does the unthinkable and increase supply.

The housing market is now a political hot potato.

But to just increase supply is no easy matter. It doesn’t happen overnight and it could take 2-3 years before we can get it right.

As an investor, you should know this and I’m doing what I can to put my perspective on it.

As people talk down the property market, I and others continue to make easy money, month in month out, simply because we have portfolios that just increase in value whilst we sleep.

The money you make when you sleep is the easiest money you’ll ever make in your life.

Now let’s talk about the future… The housing market will be facing some real pressure all the way to 2050. Yeah, I know that’s a long time away but it’s a trend and a timeframe that you have to consider when you’re a long term investor.

The government is pushing for a population of 36 million by then.

…and by 2030, if this problem is not dealt with, the undersupply of houses is reported that it could reach a 1.5 million shortfall.

That can only mean one thing… Prices will go up, millionaires will be made. Are you in or out?

Now 2030 is a little bit more realistic for most of us, that’s a good 20-year cycle, and you’d be foolish to sweep this information under the carpet and miss out on potentially 3 upwards cycles leading into 2030.

What I mean by 3 upward cycles is property doubling in value every 7 years from now till 2030.

Most people’s thinking is too short term when it comes to property. I learnt this several years ago, that you have to think in cycles when it comes to property. I’ve been involved in only 2 property cycles and literally have made millions.

Back to the problem…

The government has a clear agenda to increase the population, whilst the state governments are scratching their heads as to where these people will live.

It wasn’t long ago that Bob Carr, the former premier of NSW was saying that Sydney is full and literally making it impossible for future planning and growth.

There’s a stock market saying called divergence… Usually when this happens we get a significant trend either way.

Here, all fact considered, the trend is towards the upside.

So what do you do?

Well, you can simply do nothing, sit on the fence and just take my view as another opinion – nothing more than that… Or, you can let the Federal and the State governments battle it out and buy as much property as you can in the next 5 years and take advantage of this unique time in Australian real estate history… and become wealthy beyond your dreams.

I know which road I’ll be taking… Do you?

At this point, I would typically get excuses… Don’t have a deposit, can’t get a bank loan, bad credit, blah, blah, blah…

I can solve all that for you within 4 hours tops. How?

Just one of the presentations at our Cash Flow For Life conference deals with these problems and solves them. If they are your excuses, then you need to be at that event, don’t you?

Anyway, I digress.

Have your say below, I’m interested in your opinion.

Signed with Success,

Jon Giaan
Knowledge Source

P.S. The real estate monster is real, and it can be your friend if you know how to tame it and use it to do good instead of evil.

No it’s not what you are thinking, my party days are over, I was at the Global Real Estate Investor seminar.

Some might call that “work”, however for me, and I often say this, my work is pleasure.

Yes I really mean that, I love what I do.

But that’s not why I’m writing to you today, I want to tell you about a person I met at the seminar on the weekend.

Let’s call him, “The Accidental Millionaire.”

That’s one thing I love about my business, I get the opportunity to meet incredibly interesting people at events.

Let me tell you about this chance meeting…

A young gentleman caught my attention as I was speaking to a group of people on one of the breaks.

He came up to me and just handed me a glass of water.

He didn’t say much, I think it was along the lines of, “Looks like you might need this…”

He didn’t stay to be part of the group, he just handed me the glass of water and moved on.

At the lunchtime break I saw him walking my way and I simply stopped him to say, “Thank you for the glass water.”

He passed it off as being a small act of “nothing special” but then went on to ask me whether I had 10 minutes to spend with him, he wanted to run something by me.

Now, I’ve learnt a long time ago to never pre-judge anybody. You might think it’s quite easy to do but I can assure you it is in fact very difficult, and in some cases almost impossible.

To paint a picture for you, this guy was casually dressed, however I noticed that his clothes were very Italian-designer orientated. In other words, they looked expensive.

First, he complimented me on the event and the content, and then went on to tell me that he was serious about investing in the US market – but did not want to buy one house at the time, he wanted to buy 100-200 houses all at once. He referred to Dymphna Boholt’s comments about how large investors would buy direct from the banks at wholesale for deep discounts and quickly turn them around for huge profits.

Of course this immediately caught my attention and I started wondering who this guy was… and what has he done to put himself in a position to simply pull out big figures like that.

I wanted to find out if he was serious or just big-noting himself.

I told him I was impressed with his ambition and ability to think big, as well as putting it out there straight away.

Anyway, he told me that his current business was going great-guns and turning over in excess of $30 million per annum with a significant and healthy profit.

This guy is what I call a player.

It was obvious to him from what he had heard at the seminar that the US market was a big opportunity to make some very big returns on his capital and he was not just going to dabble with this – he was going to be very serious and strategic.

He openly told me that he had millions to invest and he was ready to go right now. I was more curious than ever to find out a little bit about his background.

It turns out that this guy is a massive fan of personal development and self-improvement philosophy. He was able to recite concepts and ideas from some personal development greats such as David Schwartz, the author of The Magic of Thinking Big (the first book he ever read), Napoleon Hill of Think and Grow Rich… Zig Ziglar….. Jim Rohn….. Anthony Robbins….. Winston Churchill…. etc, etc, etc.

All of these success greats had great impact upon his journey to significant wealth.

I wanted to dig deeper into his psychology and find out what made him so successful.

Now this guy is turning over $30 million and he says to me that he didn’t actually feel as though he was hugely successful, he was just taking advantage of the opportunities that were being presented to him.

I think that’s very instructive, anybody from the outside looking in would definitely see him as a success, however he just saw himself as a person of action and taking advantage of opportunity… Interesting.

I wanted more specifics, so I asked him for 3 reasons that he thought had made him achieve the results that he had achieved…

He said three things…

1. The ability to think big.
2. The burning desire.
3. Outcome driven.

I was curious about one thing… He didn’t mention his ability to take massive action. I quizzed him about this…

“Oh!” he said. “That comes naturally to me, I didn’t even think of that… But now that you mention it, I suppose that plays a big part in what I do.”

Now this is very instructive, and many millionaires such as this guy do this subconsciously… Meaning they don’t really know they’re doing it. That’s why it’s sometimes really difficult for a wealthy person to explain what makes them successful.

He has gotten himself to the stage where taking action is normal, natural and simply part of his process.

This is a big lesson for anyone who wants to be rich, wealthy and happy. Your actions have to become part of what you do daily, without thinking about it.

All this most likely developed for this guy during his time that he spent with the self-improvement greats – which obviously changed his psychology greatly.

There are big lessons here, let me summarise them for you…

• Never pre-judge… Be curious about the people that you interact with. You never know who you might be talking to.
• Add value… His gesture of giving me a glass of water was small in the scheme of things, but how often do people do that?
• Mindset… It’s amazing that most millionaires have similar stories of learning from the great masters of the past.
• The ability to think big… If you’re going to think, why not think big?
• Burning desire… This is what underpins the philosophy of “Failure is not an option… Just a learning experience.”
• Outcome driven… You’ll always find a way if you’re outcome-driven. You wont stop until you’ve reached your goal.
• Action-orientated… Turn the often difficult task of action into something that comes naturally, easily and effortlessly.

So there you have it, a chance meeting with a self-proclaimed accidental millionaire.

I thought this might help.

If you’d like to comment, I’d love to hear your views in the comments below.

Signed with Success,

Jon Giaan
Knowledge Source

P.S. Nothing by the way is by accident. Things always happen for a reason.

It’s amazing that we live in a country where we can take off a whole month and nobody will notice.

I’m not complaining. I felt like a school kid on holidays (six weeks, and enjoyed every minute).

But whilst on the break, my mind was turning and planning the year ahead… and I had what you call a blind flash of the obvious.

Here I was, planning 2010 and hit me…

> Why don’t I ask YOU what would you like me to help you with this year?

What I mean by that is, what is YOUR FOCUS and what are YOUR GOALS for 2010?

The more I know about what you want to achieve, the more I can design this year to HELP YOU.

Now, you can post your WISHLIST as a comment below.

Be as specific as you can be, this will help me in bringing to the table the exact information and experts you are looking for.

Indicate whether cash flow is more important to you than building equity.

Also, whilst you’re there, answer this question…

> What is YOUR greatest frustration when it comes to money?

That’s it for today. I thought I’d ask you before I start locking things down.

Signed with Success,

Jon Giaan
Knowledge Source

P.S. Here’s a thought… Participating in this social experiment could lead you to a more fulfilling and prosperous 2010. Come on, give it a go!