So yesterday I started doing a bit of Jon Giaan retrospective. We we’re looking at some of the calls I’ve made over the past year, and how they turned out. (Mostly spot on, thanks.)
And we seeing if you’ve been following my advice, have you made money?
Because, let’s face it, that’s why you’re here. I might be a funny guy but you’re not here because BuzzFeed’s broken. You’re looking for help cutting through all the economic double-speak and b.s, and to see how you can grow your own wealth.
So how have I been doing? Well yesterday I claimed that my predictions for prices and interest rates have been doing well so far. So how about this one? In November last year I wrote about the first signs that Sydney was hotting up. At the time the media was all doom and gloom, but I said:
“If Sydney keeps that pace up, and my tip is that it will, the media will start changing their tune very quickly. Soon, all the news will be about the amazing boom in Sydney property.
Normal conditions have returned to most capital city markets, and before too long doom-sayers in the media will be making way for headlines about booming markets across the country.”
So how’d that one turn out?
Well, take a look at some of the headlines over the weekend:
AUCTION RATES SIGNAL BOOM AT HAND – Sydney Morning Herald
RATES IGNITE HOUSING AND…. BOOM – The Australian
REAL ESTATE IN SYDNEY BOOMING WITH AUCTIONS UP 32% – The Daily Telegraph
Sydney did ‘keep it up’. In fact it’s been charging ahead. And the newspapers have all rolled over.
Of course you could argue that this wasn’t a hard call to make in hindsight. Especially if, like me, you know the media has a bias towards the bleak and baneful. But back then I didn’t have every paper and Johnny-come-lately commentator backing me up. I was all alone, like a shag on a rock.
(kinda fun, but mostly uncomfortable.)
I’ve been telling everyone I know to get ready for a boom for over a year now. To me, we had all the ingredients in place:
- Prices had fallen, and then stalled through the GFC, even though wages kept growing. That left us with a lot of catch up to do.
- There was, and still is, a wall of money headed our way through record low interest rates across the world and global money printing.
- Our own interest rates were, and still are, incredibly stimulatory, and would light a fire under house prices. I said they would fall even further, and they did.
- At the same time as Demand was starting to spike, Banks have been reluctant to lend to developers, and we just haven’t seen the kind of new supply we’re used to coming to the market. This has creating a shortage in the market that will lead to further price increases.
These are the themes I’ve been developing in these pages over the past year. These are the long run factors. They were there for everyone to see, though many didn’t.
And if you’ve been following my advice, how have you done? Well let’s say you bought a run of the mill investment property in Sydney for $500K a year ago. Prices in Sydney have grown 7.4 percent over the past year.
So you’ve probably had an equity gain of around 37K – in this year alone. And you’ve picked the bottom of the market and you’re now sitting pretty.
And your miles ahead of everyone else, who now realises that the bottom has passed, and are desperately trying to get in before prices get away from them again.
The Sydney Morning Herald ran an interesting piece on the weekend about “panic buying” in Sydney right now.
“According to Rich Harvey, of Propertybuyer, the market for property under $1 million is “sizzling”.
“Many buyers are catching the FOMO disease – the fear of missing out is clearly driving some buyers to become emotional with the transaction,” he said.”
But if you didn’t follow my advice, or you didn’t happen to buy in Sydney, it’s not too late.
Sydney has a full head of steam, but a lot of other markets are still getting going. It might be difficult to secure a bargain in Sydney, but there are excellent buying opportunities around the country if you know where to look.
What Sydney does though is show us where the national market is heading. Not every market is set to boom, not every market is undervalued. But many are. And the general conditions feeding into the property market right now are amazing.
In fact, I’d say it’s the best conditions we’ve seen since 1997. And if you remember some of my other blogs, you’ll know that property tends to move in long cycles. Expect the rest of the decade to be huge.
This is really just the first phase.
The dark days are over.
Trust me. *wink*