Commentary: ‘Get a good job that pays good money’

Original Herald Sun article on 1 June 2015: Joe Hockey under fire for advising prospective home buyers to ‘get a good job that pays good money’

Simple Property Investment Comments

If the government follows through with their announcement of prosecuting foreign investors who have broken the law, I believe this will make a big impact on the rate at which property prices are increasing; particularly in Melbourne and Sydney which have been their favourites.

It certainly appears they are serious by moving the powers from the under-resourced Foreign Investment Review Board (FIRB) to the highly-resourced and technologically advanced ATO.

There is talk of a ‘property bubble’ in these cities, a descriptive term journalists (and some politicians) use to sensationalise what those in the industry would refer to as a ‘market correction’.

Has anyone ever heard of a ‘share bubble’ when the stock market is doing well? No, you have a bull market and a bear market.

In saying that, there are always certain industries whose shares do well in a market downturn. The property market across Australia is no different.

So what does this mean?

Should we be getting ready to snap up some bargains if the illegal foreign investors are forced to sell?

My advice would be to sit tight and wait to see what happens. You don’t want to be purchasing a ‘bargain’ in today’s terms to realise that we have a decent correction period ahead in these particular markets.
Also allow time for interest rates to go up so that ‘opportunistic homeowners’ don’t distort the figures.

What do we do in the meantime?

Identify those markets that currently have the potential to do well – there are some. We live in one of the best countries in the world to invest in property. There are always macro and micro markets that show the signs of supply and demand issues which lead to growth.

So if foreign investors are going to be ‘encouraged’ to look at different markets and they have been proven to drive up prices, where do you think you should invest?

This may mean you have to look a little further than your own backyard but in the big picture what does that matter?

Would you find out which markets could give your property investment strategy a kickstart? Give me a buzz – Coffee’s on me!