Before talking to you about Commercial property, let’s take a quick look at Investment Cycles in general.
A recent AFR article contained this rather clever chart … showing an Investor’s mood at different points throughout the Cycle.
My reading would be that Australia is currently at the “Optimism” stage of the upturn — perhaps with some capital cities, a little more so than others. But generally, that’s about where most of us are at the moment.
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Last week, we talked about what you could be missing out on … when you find the need to move.
Whenever you decide to relocate to new Headquarters, what are the key things you are seeking to achieve? [Read more…]
On several occasions over the past fortnight … I have had to give this very same advice. And so, I thought it might be worthwhile exploring this in some detail with you.
What we’re actually referring to are the times when you need to relocate your Firm’s headquarters. And in the process, unwittingly forego considerable benefits that are rightly yours.
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The latest figures show unemployment crept up from 5.2% to 5.3% last month — probably due to school leavers. However, the total number of hours worked actually jumped by 2.4% during February.
2-Speed Economy
It might surprise you to hear this, however …
h3. A Strong US Recovery
… would probably be the worst thing to happen for Australia in 2010.
If that occurs, the US Federal Reserve would be forced to quickly raise interest rates, from zero to around 3%. And that would cause the collapse in the Australian dollar from its current level of around US90c.
Up until now, Australia has been shielded from inflationary pressures, with a high dollar holding down the cost of imports.
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The RBA’s underlying rate of inflation rose by 3.5% in the year to September — less that what the markets and the RBA itself expected.
However, this figure needs to fall significantly for the RBA will put interest rates on hold again.
Rate Rises
With low inventories and industry capacity-use levels up over 80% once more … you could well see the economy reach full capacity sometime early in 2010.
And this was highlighted in last week’s job figures — showing employers took on 24,500 new workers in October, compared with the 10,000 expected.
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Capture The Benefits
Depreciation is probably the most under-used weapon to legitimately shelter a significant portion of your property income.
And as a Commercial Investor, you really do have an unfair advantage over somebody investing in only residential property.
Therefore, let’s now set about dispelling a few of the common Myths concerning Depreciation.
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The Weekend Financial Review ran several articles, which seemed to echo many of the sentiments contained in my last blog about the Capital City Markets — but perhaps putting things a little more bluntly.
h3. Brisbane
Mark Ludlow (on page 2) referred to Queensland as having moved from “boom state to gloom state” — because of its heavy reliance on resources. [Read more…]
But for the most of 2008, Australia has basically experienced what you might term a Goldilocks market for Commercial property … “not too hot, and not too cold!”
Despite Office, Retail and Industrial being near the top of their cycles … the global turmoil has prevented the usual runaway activity occurring — in most capital Cities.
Finding good Investment Property under $1 million and close to the City … is becoming more and more difficult.
But I think I’ve come up with something worthwhile for you.
For the past few months, I have kept in touch with the Developers for a top site in Richmond, near Victoria Street.
And with construction for this Busness Park now just started, they’re allowing me to give my Clients an early shot a buying these Units.
The key thing for you is to have cash flow from “day one” — and I’ve managed to get that covered for you.
With all that has occurred recently as a result of the American Sub-Prime crisis … Property Investors are finding it hard to gauge the current market.
Some are preferring to “sit and wait”. Whereas, others are seeing it as an opportunity to secure a good deal … while the present confusion reigns.
