A letter from Jason
Doesn’t time fly when you’re having fun!
We’ve been having a great time, working with clients who are capitalising on the great opportunities that we have available in this current buyer’s market.
One announcement that we’re really pleased to make is that we have joined forces with Michael Luca to form Love Home Loans. This will make it a really seamless, easy process for you to build your investment portfolio or refinance. We will all be under one roof as we’ll be moving offices next month. Stay tuned for more on Love Home Loans and details of our new home.
We currently have positive cashflow solutions in Gladstone, Queensland. Our research shows it to be a key market for growth, which is supported by an article from The Australian – check out this link. We have brand new quality four bedroom houses for $480k, returning rent of $700 plus per week.
For a fantastic overview of the state of the current market, make sure you watch this RP Data market update video.
We’ve got a great article that we’d love to share from our research partners, Blue Wealth, so please read on…
Facts Vs Fear
Economists who sprout fear will always gain the most media attention. After all, the media is in the business of advertising, not necessarily telling a truthful, balanced story.
Often it seems they think if they continue along the same line, eventually part of their predictions may come true.
The phrase “even a broken clock tells the right time twice a day” comes to mind.
Looking at the facts vs the fear is often an illuminating process, and one that the media will never do. Mostly because it doesn’t sell papers.
A favourite economist of the media is Steve Keen. His dire predictions on the housing market have all been proven wrong. Even after famously losing a bet to ex-Macquarie economist Rory Robertson on house prices, Keen has continued along the same line.
Here is a quick look at some of Keen’s past predictions vs the facts:
- In 2008, Keen said interest rates would be at 2% by 2009, and Zero Interest Rate Policy by 2010 (the interest rate trough was 3%; today rates are at 4.25%)
- In 2008, Keen said we would have double digit unemployment (up to 20%). Unemployment only rose to 5.8%, and is 5.2% today.
- In 2008, Keen said house prices would be down 40% within ‘a few years’. They fell by about 3% in 2008 (less than one-tenth of what Keen predicted), rose strongly in 2009, rose again in 2010, and fell by around 5% in 2011
- In 2008, Keen sold his Sydney home at a cyclical low point, just before prices rose more than 10%
As we always say, it’s important to look into the facts when investing, and not buy into the fear or herd mentality.
If we can help, we’d love to!
Happy investing.
Jason Snaddon
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