With 2012 over, some property investors are still scratching their heads as to what just happened.
Blogger: Josh Atherton, Portfolio Property Investments
In the last quarter of 2011 the news was positive in most places around the country as the resources sector kicked into full gear and the media headlines couldn’t report fast enough on how the industry was progressing. One year on, what have we achieved? Instead of providing all the boring figures of median price changes across the nation (you can google that!), I want to provide what I have experienced as an investment coach, investor and developer.
The latest figure of nationwide capital expenditure in the mining industry now sits at $268.4 billion AUD (Oct 2012). In any terms, this is a massive boost to our economy. It has provided many property investors with the reasoning to buy in a regional area when they otherwise wouldn’t have; it has boosted returns on inner city office dwellings across capital cities like Brisbane and Perth. More importantly, it has created thousands of jobs and assisted in the up skilling of a very large workforce. However such buoyant times came to a grinding halt all too quickly in the latter half of the year.
As our resilient economy became ever present to the rest of the world, being the third most traded currency of the year. This was partly due to prices for our commodities achieving record highs, meaning our dollar remained far above parity for most of the year. Unfortunately this came with a dark side, decreasing our profitability on exported goods. The government are addressing an issue of an ageing population so they are looking for tax reform wherever they can. Obviously the term tax reform is what they use to reference the introduction of new taxes. As commodity prices began to fall in the second half of the year, a dark cloud started to make its way inland. Several other pressures cause widespread job cuts, and not just within the mining industry.
Consumer confidence started to fall and the reserve bank got to work in cutting interest rates. However the banks took heed of this opportunity and started keeping some of the cuts for themselves as they only passed portions of them to the public. To end the year, we now have official interest rates at one of the lowest points we have seen for a long time, with the potential for more to come.
One of the main reasons I have heard across the last six months as to why people aren’t willing to commit to investing in property is not that the value of the home will fall, or even that they won’t find a tenant. The number one reason has been concern over their own job security. This is an area where any property coach cannot answer or give advice. If you’re concerned over job security, there’s usually a good reason for that.
For those that don’t have that concern, looking into 2013 may be one of the most opportune times to be looking at building your portfolio. We have some of the most profitable banks in the world looking to give money to sophisticated people and have the opportunity to secure interest at all-time lows. Couple this with many regional and capital city markets being positioned at 6 O’clock, I know I am going to be making the most of 2013 and expanding my portfolio rapidly using traditional and non-traditional investment methods.
About Josh Atherton
Josh Atherton is at the top of the game, making his mark on the industry alongside others from the new generation of portfolio investment experts. In recent years, the strategic approach to property investment has shifted away from the ‘negative gearing’ strategies of old. Now, well informed portfolio investment strategies are delivering solid returns for investors, and this shift is largely attributed to progressive thinking from a younger generation of investment consultants, like Josh.
From a young age, Josh’s passion was for property investing and development. Combined with his entrepreneurial flair, this steered him towards making a decision to move from Melbourne to Emerald in Queensland. During his time in Emerald, Josh immersed himself in the knowledge of the region, overcoming many hurdles, to deliver himself a $190K gross profit in just over 12 months.
In reflecting on his experience in Emerald, Josh realised he had learned from the obstacles and mistakes he’d made. In that moment, Josh decided he wanted to share his experience with other investors, so that they may avoid some of the pitfalls and curveballs inherent in developing a portfolio investment plan in an emerging region. Portfolio Property Investments was born.
Josh went on to duplicate the success from his first development in Emerald, improving on his experience with more streamlined strategies to build wealth across the next few years. He has become well regarded as one of the first specialised property experts in the region, with a loyal online following of keen investors seeking the next “hotspot” for investment.