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August 28, 2015

Most dangerous words in property investment


Today I’d like to share a memory from when I was still a novice investor. One of my early mentors taught me that the four most dangerous words a property investor could say were “this time it’s different”. Unfortunately I ignored his advice in my early days of investing to my detriment, as I found that history does in fact repeat itself.

crawfordBY MICHAEL YARDNEY

The best way to explain what I’m on about is to look back over the last few years. While many of our property markets boomed, two extreme opinions materialised. Just trawl the internet and you’ll see there are two differing views about what’s ahead for property: one group’s been suggesting we’re in for a long-term property boom and another is suggesting the property markets are going to implode.

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August 21, 2015

Postcodes with higher risk of default on the watchlist


It should come as no surprise that with rising interest rates and unemployment some locations are more likely to be more at risk than others of residents defaulting on their loans.

crawfordBY MICHAEL YARDNEY

The Australian Financial Review (AFR) reports that the National Australia Bank has red-flagged 40 postcodes where business and personal loans are in higher risk of default because areas over-rely on single industries for growth, have high unemployment, or property prices have run too hard.

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August 14, 2015

How important is timing the property markets?


Is it too late to get into this property cycle? Our property markets have performed strongly for a few years but now have slowed down a little, leaving many investors wondering, is it too late this time round?

crawfordBY MICHAEL YARDNEY

They wonder if they’ve missed the boat this property cycle and I understand why they’re thinking this way. It’s partly because it’s often said that timing is everything when investing, but I’ll let you in on a little secret – that’s not really the case.

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August 7, 2015

What the APRA changes mean for property investors


There have been some mighty big changes going on in the world of property finance over the last month or so, some of the most significant and fastest occurring changes I’ve come across – and they will affect property investors to some degree.

crawfordBY MICHAEL YARDNEY

To help you better understand what they may mean to you as a property investor, let’s do a Q&A.

What’s happened?

In short, the Australian Prudential Regulation Authority (APRA) has introduced directives aimed at curbing investor borrowing. The reason behind APRA’s involvement is the significant growth of lending to property investors, particularly in Australia’s two largest capitals property markets – Melbourne and Sydney.

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July 31, 2015

Ticking time bomb for off-the-plan investors


Thousands of investors face financial ruin because they won’t be able to settle the “off-the-plan” apartments they signed up to buy.

crawfordBY MICHAEL YARDNEY

As if those who recently bought off-the-plan apartments didn’t already have enough to worry about, with a looming oversupply of new apartments and poor on-completion valuations, now tough lending criteria could mean many won’t be able to settle their property purchases.

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July 24, 2015

Australia’s a magnet for Chinese money


We know that China’s economic growth is what saved Australia from the recession many other countries experienced after the Global Financial Crisis of 2008-9. Its requirement for our mineral exports saved our bacon and led to a number of years of prosperity.

crawfordBY MICHAEL YARDNEY

Today, even though the mining boom is over, Chinese money is still flowing into Australia in a number of other ways, including growing numbers of Chinese tourists, students, settlers and an increased bi-lateral trade relationship.

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July 17, 2015

“House prices 30% undervalued”: RBA researcher


Australian house prices are 30 per cent undervalued, the widest such gap in three decades, according to Reserve Bank senior research manager Peter Tulip.  

crawfordBY MICHAEL YARDNEY

That statement’s going to create some controversy.

Delivering the preliminary research results to a session on housing at the Australian Conference of Economists in Brisbane recently, and stressing that they should be attributed to him and not the bank, Tulip said that whereas a year ago home prices were “fairly valued”, today they’re about “30 per cent undervalued”.

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July 10, 2015

Housing markets to ease in 2017


Australia’s house prices are expected to begin declining in 2017 according to a new report from economic forecaster BIS Shrapnel.

crawfordBY MICHAEL YARDNEY

According to the company’s Residential Property Prospects, 2015 to 2018 report, low interest rates will support further price growth in undersupplied residential property markets in 2015/16, but the spectre of tightening interest rates, rising supply and deterioration of affordability will create conditions for price declines in a number of cities from 2017.

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July 3, 2015

7 ways to bleed the banks dry


Recently there’s been a lot of talk about banks changing the goal posts, making it harder for property investors to get loans. In fact, there’s nothing new about this.

crawfordBY MICHAEL YARDNEY

I remember not that long ago, in the years following the GFC, banks responded by removing many lending products from the market and tightening the reigns on lending policies.

While this can be frustrating for investors who are battling stringent requirements to finance their next purchase, there are several ways the astute investor can break through the lending ceiling.

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June 26, 2015

Don’t speculate in property hotspots


After all these years in property, I’m still surprised at how investors decide which property to buy. But it doesn’t surprise me why so many don’t get past their first or second property…

crawfordBY MICHAEL YARDNEY

Many people buy for emotional reasons and while others think they’re investing in property, for some they’re really speculating.

By definition, speculation is “the practice of engaging in risky financial transactions in an attempt to profit from short- or medium-term fluctuations in the market value rather than attempting to profit from the underlying financial attributes embodied in the instrument”.

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