I have a feeling this year is shaping up to be one of the most interesting years on record for property investors.

2011 was a reasonably flat year for property with prices not moving much and falling in some sectors. High profile properties and properties on the expensive end of the spectrum also suffered ensuring we all heard about the “doom and gloom” in the media.

Global economic concerns will continue to dominate headlines and undoubtedly our thoughts throughout 2012.

But what about property investment?

In this market, as in most, property investment is a long term investment decision.

Property prices will be interesting in 2012. Property experts agree that in 2012 we are likely to see modest growth in property prices of around 3-5% . However, with any market uncertainty there are great property deals to be had. The astute investor will find well priced property offering good cash flow returns and long term capital growth.

Interest rates are will either remain unchanged or trend lower as the retail sector continues to struggle. This will make a property purchase yield good rental returns in the short term whilst the market recovers and prices trend upwards in the long term, as they have always historically done.

Mining will continue to drive a lot of the good property investment opportunities. As you will see in our feature article mining regions will continue to offer good property investment opportunities.

Already we are seeing buyers returning to the market with property experts tipping a larger influx of buyers from March onwards.

Our feature article on the Hunter Valley - showcases one of the more unique regions in Australia that is growing through a mining boom that is also underpinned by an already large economic base close to Sydney. A number of factors is driving the Hunter Valley’s growth and I encourage you to read the article on investment opportunities in the region and how Portfolios can help.

Welcome back for another year – we trust you had a great holiday break and enjoy a prosperous 2012.

If you want to talk about your plans this year – or find out about some great property opportunities we have at Portfolios give us a call or send us an email.

Source: Domain – www.domain.com.au

A booming mining industry, thriving agriculture and strong domestic tourism. The Hunter Valley has it all. And Portfolios has the investment opportunities. Portfolios is sourcing excellent investment property in this prosperous region that are still offering great rental returns and competitive prices.

You probably know the Hunter Valley as a great wine producing region. It is that but the Hunter Valley is so much more.

Stretching from Newcastle in the east out to upper reaches around Scone and Singleton, the Hunter Valley is set to experience a population boom. The regional population projections estimate an additional population of 120,000 residents will need to be housed by 2026. Much of this will take place in the Maitland to Singleton belt.

Lets look at some of the stats:

1. A booming mining industry that is still growing with demand in excess of 20 years. Top this with global demand for coal – particularly that found in the Hunter and this could go on indefinitely.
2. Mining aside the Hunter Region has a diverse employment base spanning all business sectors particularly mining, manufacturing, tourism, education and health.
3. New approved population centres including Kurri, Greta and Branxton. The Branxton development alone will accommodate around 30,000 homes.
4. Slid investment in health and education with a thriving public and private school community throughout the region.
5. A stable and temperate climate, close to beaches and scenery unparalleled in NSW creating the perfect family lifestyle of work opportunities and leisure
6. Massive infrastructure spending including:

• $350m Hunter Infrastructure Fund to be spent on local infrastructure including road rail and ports.
• Hunter Expressway – linking the upper Hunter Valley with the Newcastle-Sydney Freeway giving residents fast access to Newcastle and Sydney, due for completion in 2013
• Newcastle port expansion – the Newcastle port is continuing to expand with a larger coal loader and greater diversity – it is already one of the largest ports in the country with the largest coal loader in the world.
• Rail investment – both private and public sector investment in rail has been undertaken to improve rail freight and passenger services throughout the region.

The Hunter Valley has so much to offer and any astute investor will see it is a great long term investment.

All of this is with world famous wineries just minutes drive away for that family Sunday lunch or short break.

Portfolios has properties for viewing in the Hunter Valley – all our properties must meet a stringent investment criteria before we will consider offering it to you – if you haven’t dealt with Portfolios before log in and fill out our Client Portfolio Review and we’ll be in touch.

Call Portfolios – we can help you make it happen.

As we look towards taking a break over the Summer and setting those New Years resolutions,  I have come across some interesting research that seems to suggest that health is linked to your wealth.

But what is wealthy?

It seems that how much we exercise to stay fit is linked to how much we earn. That wealthier people are more likely to take part in physical activities more than those less well off.

According to the Australian Bureau of Statistics those in the wealthiest income groups were more likely to engage in a number of fitness activities. The least wealthy were less likely to pursue any physical activity at all.

Why?

Well the answers are partly speculation and I welcome your input on this one, but I offer up some suggestions below. I caveat this with my desire that you would think about how you can be more positive towards your health in 2012. Note that very few of the offerings below relate to how much money you have.

More Free Time

I think wealthy people have more spare time than their less wealthy counterparts. The priority of exercise and health is high on the agenda as is spending time in social settings and recreation.

More Organised Time

If they are busy – wealthier people seem better able to distribute their time well to make space for physical pursuits.

Greater Determination

Often people gain wealth through sheer determination and strict planning. This will generally flow into all areas of their lives. The determined take control of their lives and this includes keeping fit.

More income to spend on luxuries /  healthy foods

Although the wealthy are usually cautious about their spending they will have a greater disposable income to spend on extras like gyms, classes and personal trainers. They will also prioritise spending to ensure they have the best equipment to support them.

Why Is Health Important?

A 2008 published study from Cambridge found that of over 20,000 men and women between 45 and 79.

The study looked at a combination of four activities including regular exercise, moderate alcohol use, daily fruit and vegetable intake and not smoking. Over the study period those who took part in none of the above activities were four times as likely to have died than those who engaged in all four.

Practicing the four healthy habits according to the research was equivalent to being 14 years younger in chronological age. 1

Who are the wealthy?

The research I have done refers to the wealthy in terms of income status.

Wealth is also an attitude you choose long before you make sustainable money for yourself. Being at peace with where you are at, a healthy and well balanced life is available to everyone.

As you can see above – simple lifestyle choices cross over wealth boundaries – they are available to all of us. Its not conclusive but could be the start of better things for you.

It is my hope you will take 2012 by the reigns and make it your year to get healthy and build your wealth portfolio as well. At Portfolios we look forward to standing along side you as you do.

Property Investment Is Like Any Other Investment…

…so remove emotion and learn how to make better choices.

I read a great article recently that was directed at property investors who use too much emotion in their choices and often wind up not going past one investment property.

Property investment is about building a portfolio. It is what Portfolios does best.It is all outlined in our feature operational promise The Portfolios Property Way.

When Portfolios work through investment deals with our clients we are looking at an all up investment package not just one property. Who and what is the portfolio serving? What do you want to get out of it – or give out of it? What about your next generation?

The Statistics

I found it fascinating this article quoted statistics from the Australian Taxation Office that showed 73% of investors stopped after one property purchase. The Bureau of Statistics paints a crazier picture – over 50% sell their properties within 7 years citing unforseen costs amongst excuses.

Pointers

The article points out a few pointers on buying worry-free property. Some that I agree with and have added to include:

Buying New: New properties have greater cost recover through deductions and can attract stamp duty concessions. A clean fresh property is also easier to let and less maintenance.

Buy Brick: Brick is a more durable and ageless product that will lower your ongoing maintenance bills.

Choose Quality Work: A property that is well built will hold out for your tenants better, require less maintenance and be easier to sell in the future.

Its Not All About A Post Code: Buying by the post code can be dangerous. Look for good growth. Be aware of the area you are buying in, understand local and national growth cycles and rental yields.

Flat Markets Are Not All Bad: A flat or slightly declining market is not all bad. Good rental yields will see you well place to take advantage of ongoing capital growth that seems to be the trend over 7-10 years.

Supply And Demand: Understand who your area is popular with. Understand local demographic sensibilities like seniors or students, young families, local facilities etc.

The Portfolios Way

At Portfolios we have taken most of the guess work out of choosing the right properties. Over the coming weeks we will be posting some of our processes that show you how we have done the homework for you and can open the door to develop a successful portfolio – even in this market.

Source: Domain Real Estate Magazine – Port Stephens

If you had a win on the Melbourne Cup and invest in property – Tuesday 1 November would have brought you extra good news.

Weak inflation leading into the September quarter for 2011, down to 0.6% from 0.9% assured investors good news on Melbourne Cup day – a drop in the interest rate by 25 points.

The big four banks were quick to act with three of the four major banks dropping their rates by the Reserve and the nab slightly less.

Inflation is low and likely to stay that way for now – retail figures are flat, people are saving rather than spending.

The Good News

But its good news for property investors with competitive property prices, excellent rental yields across the country and the rising confidence in property prices.

The mining boom rolls on with a seemingly insatiable demand for our resources coming from the nations that seem to have unlimited demand – Asia.

In the next issue we will discuss the state of the Australian property market leading into the new year and our informed prediction on where we think things are headed.

At Portfolios we are committed to property investment as a long term process – with great rental yields and flattening prices now is a great time to buy. Give us a call to find out how we can help you.

The passing of Steve Jobs saddened the technology world – and those touched by the genius synonymous with Apple. So what can great investors learn from such a person?

Steve Jobs epitomised the technology era – like a Father of the faith bringing the world into a modern technological era – seeing the rise of the personal computer and more recently mobile devices such as the iPod and iPhone.

Lets have a look at what it was that captured us all about Steve Jobs. There are many lessons I feel we can translate into our property portfolio and handling the current and emerging property market.

On Innovation

Steve said that “innovation distinguishes between a leader and a follower” Property investors like yourselves need to be innovators, always looking for the next deals and focusing on growth, looking for ways to broaden, improve, mould your strategy.

The great property investors see their portfolios like a business, a place that has room for innovation. Particularly in uncertain times.

Why do you invest in property? What are you doing with your investment? Is it merely a retirement plan, or do you have a greater purpose – a plan to use your portfolio to continue to grow what you do, invest in something else or use your social conscience. Its not just your portfolio but what you do with it that will really separate you out.

Focus

Steve talked about focus and excellence as the opportunity to focus on those few things that you have chosen carefully to undertake – not say yes to every good idea that comes along.

As property investors we need to understand where we are at – what our focus is and what the end goal looks like. Only when we understand these things can we really focus on the property portfolio that is our best strategy.

Passion & Purpose

Good property investors are passionate about property. They love buildings, they get a thrill out of the deal, they understand the investment imperatives and are always looking for ways to grow or secure their portfolio.

Steve aptly said “being the richest man in the cemetery doesn’t matter to me… going to bed at night and saying we have done something wonderful… that’s what matters to me”

Resilience

On a final note, and a great word of assurance for property investors in the current market, Steve had a lot to say about resilience in developing a successful outcome.

On remembering losing his job at Apple originally Jobs said “It was awful tasting medicine, but I guess the patient needed it. Sometimes life hits you in the head with a brick. Don’t lose faith.”

Good property investors plan for the long term. They don’t panic, they don’t behave erratically and even in a flat or down market will still find those deals that work now and into the future.

What Can We Say Then?

To those looking to invest in property – now is a great time with dropping interest rates and bargains galore in the market – whilst rents are not declining. Life deals well to the calculated risk taker – what are you waiting for?

The team at Portfolios are passionate about property investment from finance to property to the long-term deal.

“Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in square holes… they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think they can change the world, are the ones who do.”  Steve Jobs.

Most markets are at the beginning of a long term growth cycle. Property remains an excellent asset class for long term investment and definately offers more stability than the volatile share market.

Once confidence returns, Australia will be in good shape. Unemployment remains relatively low and rents are very strong.

A key factor is interest rates.

Buyers have been concerned about interest rates increasing and we really need to see a rate reduction. With three year fixed rates now below the variable, this indicates the banks belief that interest rates are on the way down. A great relief for home owners.

Some market observations:

* In RP Data’s June results, Canberra was the best performing capital city with property values up 0.50%. Prices are now beginning to stabilise after 3-4 years of substantial growth.

• Vacancy rates are very tight with renters competing strongly in the markets with little stock. Some renters are offering higher rents or advance payments. According to RP Data, there were 9,000 less new advertised rentals in July 2011 vs July 2010 nationally.
• There has been a record number of refinancing which indicates buyers are taking advantage of better deals so they can upgrade or at least reduce the interest rates on existing properties.
• An increasing number if young people are choosing to buy an investment property ahead of their first home.
• Many consumers have de-leveraged by paying down their loans. Whilst not good for retail, they may have more cash in the bank and their super fund. In some markets, people are downsizing to a more affordable home specifically to reduce the size of their mortgage.People are conscious of debt and are acting accordingly.

Source: John McGraths Market Review – Spring 2011

NAB is tipping the central bank will still raise interest rates by 25 basis points but not until November 2012 instead of previous forecast of May. NAB chief economist Alan Oyster anticipates a long period of inaction by the RBA, before increasing rates to 5% in November 2012.

But investors are betting the official cash rate will drop to 4% by December 2011 as the banks are forced ti act as the economic slowdown worsens. Out of the four big banks, Westpac is the only bank tipping that interest rates will drop by 25 basis points to 4.5% by this Christmas. Well who do you believe. We will have to wait and see.

Source: www.thetelegraph.com.au/16092011.

Click here to read McGrath Market Review Winter 2011.

As we enter into the fifth month of 2011, are you wondering whether the market is going to gain traction and build upon some early positive signs? Positive key drivers are indicating that we are now in one of the most important selling periods of some time. What are the 8 key drivers that are making 2011 a strong year in property? Read on to get McGrath’s in depth Market Review for Autumn 2011.

Read the John McGrath’s Market Review – Autumn 2011 here.