Quite a bullish subject line, don't you think?
I didn't come up with it, the guy who did is Frank Gelber from a company called BIS Shrapnel.
Now, you may have never heard of these guys, but when a developer wants to put up a 50-storey building or a 200-lot subdivision, they go to Frank and he does a feasibility study as to whether it's a smart thing to do or not… Based on a host of data.
So, they guy obviously knows what he's talking about.
…But here's the thing. You might be confused and scratching your head as to whether Frank is on the mark here.
Especially when you hear that clearance rates have dropped by 20% in the last 4-6 weeks.
I wrote to you earlier in the year, indicating the way I thought the real estate market would play out.
Here's a quick recap…
Interest rates will rise… They have.
Owner-occupiers will s*&t themselves and stop bidding… They have.
Owner-occupiers will put their cheque-books back in their pockets and keep paying the
rent… That's what's happening right now.
Vendors selling their homes will have to consider all offers or take property off the market… Look out for this.
Rent will explode, especially in Sydney… This is already taking shape.
…So with all that said, it is a great time to be a property investor.
The increase of interest rates has put the real estate market into a holding pattern, which means a lot of people are sitting on the sidelines, choosing to wait before they buy or build property.
So here's what I think… There's a window of opportunity to negotiate with frightened vendors and pick up some hot deals.
So the game is starting to favour the investor. With rents sky-rocketting, all real estate investors should start building positions to take advantage of the next 5-year boom cycle.
Once the higher interest rate climate starts to head south, that will bring back the owner-occupiers and create another surge in capital growth around the country.
The fundamentals haven't changed.
Here's what Franks said:
“There's an annual housing shortfall of 30,000 dwellings, which is set to double by June this year and rise to 129,000 by June 2009.”
What you've just read is the perfect green light to start watching and preparing to take action.
For me personally, nothing has changed. We're right on track. Especially those that live in Sydney should be on notice to the opportunities.
Melbourne and Brisbane are pretty strong as well.
So what are you going to do? Just sit there and watch?
The reason why I send you these emails is just to simplify what others complicate.
Here's how I look at it… If people want bananas, and for whatever reason the fruit shop has less bananas than normal, what will happen to the price of bananas?
So what should you be doing?
No, no, no… Not buying bananas. Just kidding. Do whatever you can to find out how you can get in the market NOW.
Don't allow your currently-held beliefs of, “well I just don't have the money” stop you. Ask yourself, “How can I?”
If you act on this observation, you'll thank me in a couple of years time.