Insider Tips to Help You Discover How to Succeed with Commercial Property
ACCORDING to the Australian Retailers Association, its members are projecting $39.5 billion in sales from mid-November until Christmas — reflecting an overall increase of just 2% on last year.
Many shoppers still remain extremely hesitant, despite the RBA’s recent interest rate reduction.
Although, with household savings at record levels … people may simply be holding back on their main splurge splurge, until the post-Christmas sales. [Read more…]
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.
At 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.
Many investors just simply fall in love with Retail property. And probably, because of familiarity — as it tends to influence so much of our daily lives.
Therefore, after investing in Residential property for a while, you find people will gravitate naturally towards Retail properly.
To them, it seems to be the next logical step. But is that actually the case? [Read more…]
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…]
Last week, you looked at the reasons why lenders view Commercial property in a different league to Residential property, when it comes to finance.
And then, we moved to the various aspects Commercial lenders look at as far as Risk is concerned.
More importantly, just how these aspects will determine whether or not they will actually lend against the actual property you are looking to purchase.
However, what you really want to know is … [Read more…]
Last week’s article entitled: “OK … What’s Really Going On?” seemed to capture the interest of quite a few readers.
So, tell me … how many people have you spoken with lately, who are fearful about the European and US debt problems?
And have you stopped to find out how few of them realise that the problems confronting those countries may actually be GOOD news for Australia.
Perhaps it is worth explaining how that could possibly be — because there are several things you need to appreciate. [Read more…]
Last weekend in the Financial Review, Andrew Clark began his article (on page 52) with the words:
“Australians don’t know if they’re in the middle of a pause that refreshes or the dullness before the deluge.”
That about sums up the general feedback I am receiving at the moment, from clients and colleagues alike.
Clark felt this probably stems from a combination of …
Presumably, this was behind the RBA’s decision to keep the cash rate on hold until next month — pending more economic data in the coming weeks.
According to the IMF … in spite of all the recent turmoil, the outlook for global economic growth appears quite rosy moving into the new financial year. [Read more…]
The RBA appears to be performing a rather fine balancing act.
Its Board knows rising inflation is about to emerge. And this is only temporarily masked by a poor March quarter, following the nation’s flooding earlier in the year. [Read more…]
When you’re just starting out, your main aim is probably just trying to secure a worthwhile property.
However, to be truly successful, you actually do need to have a Master Plan.
And to help you, here are 6 Steps towards formulating one for yourself. [Read more…]
Yesterday, the Reserve Bank decided to hold the cash rate steady at 4.75%.
However, it also acknowledged that Australia’s underlying inflation rate will now be running at around 3% for the year — and that’s ignoring volatile items, like petrol and food price spikes.
Economists tend to agree that the high $A has effectively done much of the “heavy lifting” for the RBA.
But as these graphs show, the RBA will most likely be forced into a midyear rate rise. With at least one further rise likely, before the end of 2011.
Put simply: Increasing business confidence (confirmed by improved Business Credit figures) means more investment being undertaken by business … which will in turn will put pressure on wage rates.
So far, the RBA has displayed a bias towards pre-emptive action. And there is no reason to suggest it would suddenly change that approach. As such, many people have been left confused by yesterday’s decision.
However, astute Commercial property investors recognise the time to strike is when the “uninformed” are dithering … due to their lack of understanding.
Yesterday, the Reserve Bank left the cash rate unchanged at 4.75%. And these graphs will help to explain their current dilemma.
For the time being, the RBA’s focus is upon “inflation excluding volatile items” — mainly because of the various natural disasters, both here and overseas. [Read more…]
WITH EVERY NEGOTIATION, you always need to be thinking on your feet. And here are several simple Tips to help you do just that.
WHEN YOU EMBARK on your journey as a property investor, it can be overwhelming – with a flood of information and diverse opinions. To help simplify the process, here are five essential tips for new (and seasoned) investors.
IT DOES NOT MATTER whether you’re an investor or an owner-occupier, there are several important factors to consider when purchasing a commercial property to ensure you make the right choice.
In a previous article, I shared a handy App to assist you in shortlisting potential properties. If you haven’t already downloaded it, simply click on the HiReturn Filter over on the right, to install it on your tablet or mobile device.
THERE IS A BELIEF among many experts that a surge in the stock market typically precedes a recovery in the commercial property market by about six months. And the start of this year saw equity markets gaining some momentum.
I HAVE BEEN ASKED countless times about the secrets to a successful negotiation. And I want to share with you the key elements to help make your negotiations effective.
But first, just watch this short video to gain a quick understanding of these three essential elements that form the foundation of every negotiation.
If you’re new to investing, you might be wondering if it’s possible to manage your own commercial property. The short answer is “yes”, but only if you know what you’re doing.
It’s important to note that owning a commercial property comes with certain legal responsibilities, particularly when it comes to compliance with Essential Services requirements under current Building Regulations.
The current trends in the business have made it clear that office landlords have to cater to the needs and preferences of their tenants. Building owners and managers (who understand and meet these demands) will be able to command higher rents and reduce vacancy rates.
To expand on this, here are four key tips to help attract quality tenants.
