How many times have you heard that old adage?! In reality, and as history has shown us, this generally holds true as every property investment strategy should be focused on the long term based on your goals and current circumstances, rather than focusing on media reports, urban myths or hearsay. Why?
Here’s a few of today’s ‘truths’ to consider that might help clarify if this applies now…
- Unemployment is expected to fall – fast – due to the already tight labour market and additional pressure brought by flood reconstruction
- Falling unemployment places significant pressure on wages
- Global inflation is pushing up import prices
- Demand for goods and services is increasing locally
- The Governments spending was greater and the budget was already way behind even their latest forecasts before the floods, its only getting worse
- Mining boom continues and will for some time
What this means is that while inflation is in check right now, its unlikely to stay that way for long. With inflation comes an increase in interest rates but also an increase in housing affordability as wage price growth outpaces house price growth and interest rates providing the opportunity for house price increases. Housing costs (land and construction costs) increase providing upward pressure on house prices, rents increase due to tighter housing supply in areas of high labour demand and areas of shortages or where rising prices make it harder for entry to the market which helps to offset rising rates for investors.
If not now, when?
For those who don’t have time to do real research or who receive their information from the general media only, it is easy to understand why fear and procrastination creeps in. In 2009 people we’re waiting to see what would happen as a result of the GFC instead of looking at the market fundamentals which led to a rapid increase in property prices. In 2010 it was the election yet many areas around the country performed very well despite the ‘median’ (which is only the middle) falling flat in the second half. In 2011 it will be the floods or something else that holds people back despite the writing on the wall. The reality is that we have seen investors increase their nett wealth each year over this time by investing in the right areas with the right support and by doing it ‘today’ rather than looking for the ‘perfect opportunity’ – being 100% certain. Unfortunately with any investment you can never certain as all investment involves risk. Of course the greatest risk to creating wealth is doing nothing. You can be certain of your outcome then!
If you are making excuses, please ask yourself these two questions: ‘Why am I afraid ?’ (often more misinformation or a lack of knowledge) and ‘Do I think I will be better off for waiting?’. Australia is racing ahead, if you’re doing the same thing tomorrow (procrastinating or nothing) then you’re actually going backwards!