Rask - Myth busted: Australian property doubles every 7 years
The podcast, hosted by Pete Wen and Amy Lunardi, addresses several myths about the Australian property market. They start by debunking the belief that property markets always go up, explaining that while the long-term trend in Australia shows growth, individual properties can lose value due to various micro and macro factors. They highlight the importance of understanding these factors, such as construction costs and land values, which have historically increased due to inflation and demand.
The hosts also discuss the myth of getting rich quickly through property investment. While some have profited significantly in short periods, this is often due to luck or specific circumstances like market timing or development opportunities. They caution against relying solely on property appreciation for financial goals, emphasizing the risks involved. Additionally, they explore the misconception that renovations always add value, noting that the return on investment depends on the property's purpose (home vs. investment) and market conditions. They advise careful planning and understanding of buyer preferences to avoid overcapitalizing.
Finally, the podcast covers myths related to the property buying and selling process, such as the idea that agents always sell to the highest bidder or that spring is the best time to sell. They explain that terms and conditions can influence sales decisions and that personal circumstances should guide timing decisions rather than market myths. The hosts stress the importance of strategic negotiation and understanding market dynamics to make informed property decisions.
Key Points:
- Property markets don't always go up; individual properties can lose value due to micro and macro factors.
- Getting rich quickly in property is rare and often involves luck or specific market conditions.
- Renovations don't always add value; consider the property's purpose and market conditions.
- Agents don't always sell to the highest bidder; terms and conditions can influence decisions.
- Spring isn't always the best time to sell; personal circumstances and market conditions matter more.
Details:
1. 🔍 Introduction & Financial Disclaimer
- The information provided is limited to general financial information and should not be considered personalized advice.
- Viewers are strongly advised to consult with a financial planner to tailor decisions to their specific financial needs.
- A financial services guide is available for reference, offering detailed insights into various financial strategies and considerations.
- These disclaimers ensure viewers understand the importance of expert consultation and the limitations of general advice.
2. 🏠 Podcast Overview
- The Australian Property Podcast introduces a property foundation miniseries featuring Pete Wen and buyers agent Amy Lenardi.
- The miniseries aims to cover the basics of the property purchase process.
- Pete Wen is a seasoned property expert known for his strategic insights into the real estate market.
- Amy Lenardi brings a wealth of experience as a buyers agent, helping clients navigate the complexities of property acquisition.
- The miniseries will delve into topics such as understanding market trends, financial planning for property investment, and the step-by-step process of buying property.
3. 🛠️ Debunking Property Myths
- There is a common belief that property markets always go up, but this is not always true. While the long-term average property prices in Australia have increased, this is a generalization and does not apply to every individual property or submarket.
- The property market operates on both macro and micro levels, with various submarkets in Australia that may not experience growth or could even see a decline in value.
- It is critical to understand that buying a property involves risk, as some properties can lose value despite the overall market trend being upward.
- For instance, specific areas in Australia, such as mining towns, have experienced significant drops in property values when the primary industry declined.
- Investors are advised to perform thorough research on local market conditions and consider factors such as economic drivers and industry reliance before purchasing properties.
- Additionally, understanding the historical performance of the specific property and its surrounding area can provide better insight into potential future trends.
4. 📈 Macro & Micro Influences on Property
4.1. Macroeconomic Influences on Property
4.2. Microeconomic Influences on Property
5. 💡 Investing Strategies & Risks
- When investing, consider both macroeconomic factors like interest rates and global economic conditions that are beyond your control, and microeconomic factors such as suburb and dwelling selection where you have more influence.
- Significant economic events over the last 15 years impacting investment strategies include the global financial crisis, policy changes like potential negative gearing removal, the COVID-19 pandemic, and recent substantial interest rate hikes.
- Reliance solely on property value appreciation is risky. Align property investments with cash flows and long-term objectives to mitigate risks.
- First-time homebuyers often plan to invest in properties to later sell for a profit to fund future home purchases, but this strategy should not depend solely on the expectation of property value increases, as it poses considerable risk.
6. 🔧 Renovation Realities
6.1. Market Fluctuations and Property Losses
6.2. Real Estate Wealth and Risks
6.3. Renovation Considerations
7. 📊 Buying & Selling Strategies
7.1. Renovation and Market Dynamics
7.2. Renovation Considerations
7.3. Investment vs. Personal Preferences
7.4. Real Estate Agent Strategies
7.5. Creative Negotiation Tactics
7.6. Navigating Auctions and Private Sales
7.7. Professional Assistance in Property Buying
8. 🍂 Timing the Market: Myths & Realities
- The belief that the spring season is the best time to sell property is a myth. While it's logical to think there are more buyers, it also means increased competition with numerous auctions happening, such as 1,500 in Melbourne and 1,000 in Sydney on a big weekend.
- The best time to sell or buy property aligns with personal strategy rather than market timing. Waiting for an ideal market condition can backfire if unexpected market changes occur.
- Avoid selling during December and January as buyers tend to tune out due to holidays, but this period can be advantageous for buyers seeking bargains.
- Public holidays should be considered in sales campaigns as they can affect buyer availability.
- Unexpected competition can arise despite good market timing, as seen when multiple similar properties become available simultaneously.
9. 👍 Conclusion & Call to Action
- Encourage viewers to like and subscribe to receive daily videos on business, finance, and investing.
- Regular content updates ensure engagement with topics such as business, finance, and investing.