Be Prepared for Strong Growth in Commercial Property During 2012

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! [Read more…]

Discover How to Make the Best Choices When Investing in Commercial Property

Prepare for your Commercial Property DecisionsIf you’re looking to purchase a Commercial property to occupy yourself, perhaps you should make it a two-step process — by first renting a property within the location you prefer.

Finding somewhere to lease is relatively easy, as not everyone wants to sell their commercial property.

Most people own Commercial property for investment — which means you would be able to occupy the space, for as long as you keep paying the rent. Plus, you can then discover whether it is the location you want for your business.

Anyway, you may care to check out a few more tips on buying commercial real estate, as you continue reading. [Read more…]

Will the RBA Cut Rates Again?

 This may well be the last Interest Rate Cut
Last week’s inflation figures were certainly much better than expected.

As such, there had been considerable political pressure placed on the RBA from by the government to cut interest rates this week.

Retailers were virtually pleading with the RBA to do so. Plus, homeowners were also looking for some relief in the run up to Christmas.

However, this is probably the last interest rate cut by the RBA for quite some time. To understand why, you need to cast your mind back to when the GFC began in 2008.

RBA has a real Dilemma going forwardAt the time, business investment was falling.

This is unlikely to occur from now on — because planned mining investment (at $430 billion) is three times greater than in 2008, representing about a third of Australian’s GDP.

And overall, Australia is said to have around $900 billion of business investment in the pipeline.

Furthermore, our main trading partner (China) is now far less dependent upon Western countries for its growth.

In 2008, China’s 12% per annum growth in GDP reflected a 3% to 4% component of exports to the West. While this year’s 9.5% growth in GDP was basically driven by domestic demand — with virtually no exports involved.

Overall, there is said to be around $900 billion of business investment in the pipeline. Add to that the improved stability of Australian banks, with their reduced offshore exposure and improved domestic deposits. Plus, an increase in the Tier 1 capital ratios.

Finally you also need to remember the RBA’s cash rate has now fallen from 7.25% in 2008 to its current level of 4.5% today.

Bottom Line: Apart from the current turmoil in Europe, Australia’s underlying fundamentals are solid. And these augur well for strong growth in Commercial property over the next 5 years.

To reduce interest rates any further would only serve to artificially inflate asset prices — rather than allow the market to grow organically … based upon genuine, sustainable demand.

 

Not all Repairs to Commercial Property are Automatically Deductible!

Claiming Repairs for Commercial property needs careful thought
Did you realise that some of the repairs you make to your Commercial property are NOT necessarily deductible against your rental income?

Often, it comes down to something as simple as timing. [Read more…]

Why the Slow Economic Recovery?

The Vagaries of Financial UncertaintyExactly why have industrial companies around the world been slow to recover? And why did everything look so promising … and then suddenly, seem to grind to a halt?

Perhaps some insight into this dilemma was provided by the IMF’s recent World Economic Outlook.

According to Oliver Blanchard (its chief economist), there are the dual influences of a slowdown in advanced Western economies; and the overall financial uncertainty.

During the GFC, companies allowed their inventories to run down. Then, with a hint of global recovery, those same companies began replacing their depleted inventory levels. [Read more…]

Commercial Property: Home-study Course
Now Taking Shape

My new Training Course is quickly taking shape
Yesterday, I gave my Inner Circle a “sneak peek” at the outline for my brand-new training Course … “Mastering Commercial Property”.

And over the past couple of weeks, I have actually progressed a fair way down the track, in bringing it all together.

However, I just wanted you to see the direction in which it was heading.

Therefore, you can take a look now at just how the website is taking shape. And please keep your feedback coming — because, it’s been just so helpful.

 

Tried-and-True Tips to Profit from Commercial Real Estate Investing

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Tips for your Success with Commercial propertyTHE BEST looking property could actually represent the worst real estate investment you have ever made.

Remember that Commercial real estate investing is all about … the Deal, the Terms and the Return on investment. Here are some tips for successful Commercial real estate investing. [Read more…]

Why All The Panic?


Are we really heading for GFC Mark II?

Well, not here in Australia anyway! And even overseas, things are vastly different this time around.

In 2008/09, it was private debt causing the problems … because nobody was too sure which banks were overly exposed to the sub-prime mortgage problem. [Read more…]

Let’s Stop The Doom & Gloom! How About Some Good News?

For the past few weeks, the world’s media seems to have been dominated by two unfolding dramas:

  1. The extraordinary and rather amateur performance in Washington, as the US government lurched towards potential default.
  2. The concerning spike in euro-region yields, against the backdrop of their apparently insoluble sovereign debt issues.

However, as Amy Auster reported in Saturday’s Financial Review, there was also a really positive development last week (certainly for Australia), which seems to have simply “snuck under the radar”. [Read more…]

Commercial Property Fundamentals
Continue to Improve for Investors


The mid-year report from the Property Council of Australia (PCA) has confirmed a tightening of all major Office markets — except for Sydney and the Gold Coast.

As you can see from the graph, Sydney’s vacancy rate actually increased from 8.3% to 9.3% during the six months to July 2011.

For the remainder of Australia’s office markets, there was an overall improvement — as demand for space exceeded supply, and yields began to firm.

According to Peter Verwer (PCA’s chief executive): “This is a good result, especially now with a lot of uncertainty about Australia’s economic resilience … demand and absorption are well above the historical average, except for the orphan Sydney.”

From this second graph, you will also notice that the Melbourne Office market has been consistently outgrowing Sydney, since about July 2004.

Furthermore, because of Sydney’s heavy dependence upon the financial sector … this growth trend is unlikely to change any time soon.

Melbourne, on the other hand, has its Office demand spread across a wide number of sectors. And therefore, has been far less exposed to the recent global turmoil.

Bottom Line: Despite all the stock market gloom, the underlying fundamentals for Commercial property are strong — particularly in Melbourne.

And historically, it is in times like these when shrewd investors have laid the foundation for their extraordinary fortunes in Commercial property.

 

Smart Investor Seminar

Just quickly …

On Saturday 27 August, I have been asked to take the Session on Commercial Property Investing … at this Smart Investor Seminar.

And I simply thought you may have some interest in knowing what’s also being covered at the same time. [Read more…]