Be Prepared for Strong Growth in Commercial Property During 2012

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Australia stands poised ready to growThe underlying fundamentals for Australia are strong.

All that’s needed is a lift in the general confidence level, for our economy to really take off.

Therefore, the trick is … not to be caught by surprise when it does!

Business Investment

Australia’s “recession pundits” fail to realise this only happens when planned business investment falls dramatically. But currently, miners have around $430 billion already in the pipeline.

And the rest of the business community has around $470 billion in planned investment, over the next 18 months.

Stability in China

Moreover, China’s current 9.5% per annum growth in GDP is principally being driven by domestic demand. Whereas, its 12% per annum figure for 2007-08 contained 3% to 4% of exports to Western countries.

Australian Banks

Our banks have reduced their dependence upon offshore funding by a third, since 2008. And they have also raised (by 25%) their contribution from domestic deposits.

The Savings Factor

Clearly, the increased level of available cash savings held by households (now at $516bn) and businesses ($166bn) has been adversely affecting day-to-day spending. But don’t allow your personal investment decisions to be constrained by short-term thinking.

Understand that these “Savings” were accumulated on a weekly or monthly basis. But once people flick on the “Confidence” switch … all those funds will then be spent as massive lump sums.

Be Prepared …

Fortunately for Australia, the end of every year comes with a Summer break of about a month — before everything gets back into full swing.

During this time-off period, people will have the chance to clear their heads of what has been a rather messy 2011.

Bottom Line: Provided Europe makes it through to Christmas with no further surprises … Australians will return from their holidays mentally refreshed, and ready to move forward strongly in 2012.

Therefore, make sure you avoid being caught up in the clamour of the New Year — and try to secure some good Commercial properties this side of Christmas.

 

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