Property Investment & Wealth Creation Australia | The Michael Yardney Podcast

What's the right investment strategy now that we've moved to the next stage of the property cycle?

When it comes to property investing, you will often hear two conflicting philosophies.

Some say you should invest for capital growth, and others say you should invest for positive cash flow.

Now that we are in a period where capital growth is going to be lower, more investors are wondering if they should change their investment strategy and look for cash flow positive properties.

This is exactly what we discuss in today's show.

The first half of the show we talk about finding the right investment strategy, and in the second half we talk about finding the right property.

So whether you're a beginning investor or a seasoned pro, there's something for you.

What's the Right Property Investment Strategy for This New Phase of the Cycle:

1. More beginning investors tend to invest in cash flow positive properties. On the other hand, successful investors - those who've built a substantial asset base grow their portfolio through leveraging the capital growth of their investments.
2. While cash flow positive properties allow you to get short term income, they will never allow you to accumulate enough equity and assets to become financially free.
3. The few extra dollars a week in cash flow that you might receive isn't going to make a difference in your lifestyle, but the lack of capital growth is going to hamper your ability to get the deposit for your next property. And the lack of rental growth is going to hamper your ability to service more debts.
4. When interest rates rise, and the will sooner rather than later, a cash flow positive property can become cash flow negative – an you lose out because you don't have the cash flow and you don't have the capital growth.
5. Investors should focus on building their asset base. Asset growth first and then cash flow.
6. You should only buy properties with a high land to asset ratio.
   1. The first phase is the accumulation phase. This is where you build your net worth and asset base. You can speed things up by manufacturing capital growth through renovations.
   2. The next phase is the transition phase. This is where you lower your loan-to-value ratio after you have built an asset base. Then eventually you can.
   3. Live off the cash machine of your investment property portfolio
7. You have to get your investment phases in the right order.
8. When you retire the majority of your assets will be the capital growth of your property.
9. Setup the correct loan structures before you buy to cover shortfalls for two or three years.
10. You need to invest in high quality "investment grade" properties.

The Big Difference Between Winners and Losers:

1. Most successful investors realize that success is a mindset. People fall into two groups those who make excuses and those who don't. Winners stop themselves from making excuses, and they get the job done.

The Right Property for This New Phase of the Cycle:

1. We are now in for a period of lower growth for a number of years.
2. There is no such thing as the perfect investment.
   1. Strong means you'll get capital appreciation at wealth producing rates of return.
   2. Stable means your asset won't fluctuate in price much.
3. Look for an investment that is strong and stable
   1. steady cash flow.
   2. Liquidity either through selling or borrowing against the investment.
   3. Easy management.
   4. A hedge against inflation.
   5. An investment with good tax benefits.
4. Look for properties with
5. I'd take stability in my investments over liquidity.
6. Put your money into a "how to" investment such as an established capital city property.

Links and resources:

• Michael Yardney
• Metropole
• Rich Habits Poor Habits
• National Property & Economic Market Update Promo Code: Podcast

Some of our favourite show quotes:

"I tend to see more successful investors, those who've built a substantial asset base, grow their portfolio through leveraging the capital growth of their investments." Michael Yardney

"If you buy in a low capital growth area, your rents won't increase as much as properties bought in a high capital growth area." Michael Yardney

"The few extra dollars a week in cash flow that you might receive isn't going to make a difference in your lifestyle, but the lack of capital growth is going to hamper your ability to get the deposit for your next property. The lack of rental growth is going to hamper your ability to service more debts." Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

We all have dreams for the future, and many of those dreams require money to make them come true.

So today we discuss some ways to get smart about money and help you get on track with your financial goals.

Whether you are just starting out on your way to financial freedom, or you're stuck along the way and even if you're doing really well with your financial goals today's show is for you.

Because I chat with Mark Creedon about setting financial goals and why many Australians don't achieve their goals and dreams and how you could.

How to get on track to your future financial goals:

1. Understand the importance of your money habits and recognise what you are doing right and what you can improve on financially.
2. What is your plan and what is your purpose?
3. Become smart about money. Ask why money is important to you and what having more money would mean to you.
4. View your financial decisions through a lens with more flexibility.
5. After finding your why, you'll need to set some goals and design a roadmap to get you there.
6. Honestly evaluate your starting point – how are you doing financially?
7. Carl Richard's 3 guess process. Relax a bit and get going.
8. What are your goals? When do you want to do it? Put down a number.
9. How much money or how many properties do you need to achieve this?
10. Know where you are beginning. Do a balance sheet. Understand your assets and liabilities.
11. A lot of people don't want to do a balance sheet because of emotional issues associated with their financial position.
12. Most people have difficulty saving. On the other hand successful people can delay gratification.
13. It's easy to say no to spending when you have a good reason to do so.
14. Automate your savings eg10% before you even touch your money.
15. Mistake #1 is not putting a plan together.
16. Many people never decide to become rich.
17. Other people procrastinate.
18. The big mistake of immediate gratification and spending more than you earn.
19. Don't get hung up on specifics and details. Give yourself permission to guess when you plan.
20. Dump your emotional baggage around money and financial goals. Give yourself permission to move forward. It's a lesson not a bat to beat yourself on the head.
21. Take responsibility and move on. Don't blame.
22. Things change over time.
23. You can either be right or be rich.
24. You will face a number of roadblocks along the way. You may fail at certain things. Keep in mind it is a process and don't give up.

Links and resources:

• National Property & Economic Market Update Promo Code: Podcast
• Marc Creedon
• Michael Yardney
• Metropole
• Rich Habits Poor Habits
• Dr. Andrew Wilson
• Ken Raiss
• Carl Richards
• Steven Covey

Some of our favourite show quotes:

"Goals aren't just dreams and wishes. You have to have an action plan behind them to convert your desire into a reality." Michael Yardney

"The reason people haven't achieved their financial goals goes down to a deeper level of poor money habits." Michael Yardney

"The money is a means to an end it is not the end itself. The first step is to plan." Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

We are heading for the biggest crash in Australian history according to Harry Dent.

Crypto currencies are about to fall, the stock markets will crash and home values in the big cities are about to halve.

Is this really true?

Today, I speak to Harry Dent to find out what he really thinks.

I also speak to Dr. Andrew Wilson, and give you my thoughts on what's ahead.

Harry Dent Says Australia's Property Bubble Will Burst:

Here are some of the things Harry Dent said:

1. What's ahead is a global crisis of the developed world -leading to a worse depression than the Great Depression of the 1930's.
2. Bubbles cause an economic reset, but once that's over the markets can boom again.
3. The economies of many countries in the world are slowing.
4. Demographics will tell you when the different generations are going to spend money and when the slow down
5. China has the worst bubble in the world. They are also Australia's biggest trading partner.
6. Australia's real estate prices are the second highest (compared to income) in the world.
7. We have created an artificial bubble because so much money has been injected into the system by governments.
8. Bubbles build predictably, what's harder to predict is when the bubble is going to burst.
9. Stock bubbles crash twice as fast as they build.
10. When bubbles burst they burst by 70, 80, or 90%. Half of this comes in the first 2 ½ months.
11. Bitcoin has been leading the stock market crash by about two months.
12. Businesses are better off leasing rather than owning their premises, unless it's a totally strategic move to own the business.
13. You should take some equity from your real estate and short the stock market to hedge against downturns.
14. A typical real estate bubble is six years up and then six years down because people don't sell immediately when the bubble crashes.
15. Values aren't going to crash as hard in Australia as in other countries.
16. Things that will cause the bubble to burst include when US real estate starts to go down and bitcoin crashes.
17. The high-end property markets are what seem to be cracking this time around.
18. The most overpriced markets in the US are San Francisco and Los Angeles.
19. Once the bubble bursts, Australia is best positioned of all the developed countries to recover because of its proximity toAsia
20. Harry's new book has a whole new bubble model that looks at more than demographics.

Michael's Take on What Is Going On:

1. Investopedia defines it as:"A run-up in housing prices fuelled by demand, speculation and the belief that recent history is an infallible forecast of the future. Housing bubbles usually start with an increase in demand in the face of limited supply which takes a relatively long period of time to replenish and increase. Speculators enter the market, believing that profits can be made through short-term buying and selling. This further drives demand. At some point, demand decreases or stagnates at the same time supply increases, resulting in a sharp drop in prices - and the bubble bursts."

   For mine, bubbles are also accompanied by easing of lending criteria so that loans are easily obtained leading to rapid rises in housing credit, with many people who can't really afford to take on loans speculating and overcommitting themselves.

2. Do we have some of the features of a bubble at the moment? Yes.
3. Are we in a bubble? The answer is no.
4. Property values are not about to collapse.
5. Rising house prices on their own do not cause a bubble. The rise has to be followed with an increase in, speculation, borrowing and leveraging. This makes the market fragile and unstable.
6. If anything, our banking system has become more stable than it has been for decades. With increased regulations by APRA and the RBA
7. We're heading into this stage of the property cycle in the best shape that we've been in in a long time.
8. Most Australian economist do not believe that the Australian market is headed for a crash.
9. For the markets to crash, we need desperate sellers who are willing to give their property away for nothing, with no one there to buy them.
10. We need one or more of these things to occur for a property crash to happen:
    1. A major depression,
    2. Massive unemployment,
    3. Exceedingly high interest rates, and
    4. Too many properties available.

Dr Andrew Wilson Bursts Dent's Bubble:

Here's what Andrew had to say:

1. Housing prices are NOT going to drop 40% in value.
2. We probably shouldn't even be responding to these outrageous predictions.
3. It's very unlikely that we'll see any house prices lowering in Melbourne and Sydney this year. Demand remains strong in both of these markets.
4. New household formation is about 1,500 per week in Sydney. This translates into the need for 75,000 new dwellings each year.
5. Also 8% fewer homes were approved for building this year in Sydney.
6. The key catalyst for the housing market are interest rates. Currently, they are going nowhere.
7. We have the near lowest income growth that we've ever had. Without income growth and low interest rates there is no capacity to push prices higher.
8. A challenge for policymakers is that middle and low income workers expenses are rising faster than their incomes.
9. High debt and low interest rates has constrained property price growth.
10. It's been over seven years since Australia has had an increase in interest rates.
11. Interest rates should remain flat for at least another year.
12. We have a resilient robust market. The banks are much healthier now than they were two years ago or when we had the GFC.

Links and resources:

• Metropol Property Strategists
• National Property Market & Economic Updates Promo Code: Podcast
• Harry Dent
• Zero Hour: Turn the Greatest Political and Financial Upheaval in Modern History to Your Advantage
• Dr. Andrew Wilson
• My Housing Market
• APRA

Quotes:

"As an investor, I believe it's important to listen to others rather than to just move forward with confirmation bias." Michael Yardney

"Debt bubbles cause financial asset bubbles and at some point we have to have a reset." Harry Dent

"We're going to see a consolidation of price growth in all of the capital city markets. This is a product of flat interest rates." Dr. Andrew Wilson

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

Today, we discuss the top 5 mistakes that property investors make, those that have nothing to do with buying the wrong property with Stuart Wemyss director of ProSolutions Private Clients.

If you want to build wealth through investing in property, you'll learn something from the mistakes that others have made so that you don't make the same ones.

I've talked and written a lot about how to choose the right property - an "investment grade property."

So let's assume you have found the right property. There are still many things that you can get wrong.

Today's episode should help you avoid some of those mistakes.

The top 5 mistakes that property investors make:

1. Not undertaking proactive tax planning before investing in property means you most likely pay a lot more tax than necessary (consider income tax, CGT and land tax).
2. Not proactively managing your borrowing capacity and bank valuations which means you hit a "brick wall" and cannot continue to grow your investment portfolio.
3. Wasting time investing in the wrong assets or adopting the wrong investment strategy that are fundamentally flawed and were never going to work.
4. Trying to time the market. Waiting for "signs" or "indications" that it's safe to invest now (these will never appear). Worrying about inconsequential issues and not taking a long term view.
5. Not starting with the end in mind i.e. not understanding how you invest today will impact on your ability to achieve your longer term lifestyle and financial goals. You must work out if your proposed action will help or hinder your ability to achieve your longer term goals.

Links and resources:

• Michael Yardney
• Metropole
• National Property & Economic Market Update Promo Code: Podcast
• Stuart Wemyss director ProSolutions Private Clients
• Episode 1: What Makes an Investment Grade Property | Become the Pilot of Your Life, Not the Passenger

Quotes:

"You shouldn't be buying property for tax savings. Tax savings are just the cream on top." Michael Yardney

"You should get some structuring advice before you buy your property. Once you have purchased your property, it will be a bit too hard and expensive to change." Michael Yardney

"It's always a difficult balancing act when you first start off because your priorities and finances take precedent, but you should always take a long-term view." Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

2018 is going to be a boom year.

But before you get to concerned about "what I'm on" to make a statement like that, listen on as I share my perspective and why I think this going to be so.

In my mindset moment, I'm going to talk about some interesting perspectives.

Then I have a chat with my good friend Tom Corley about the rich habits that you must teach your children. Even if you are not a parent, these are still very important lessons.

Once a year, I do a series of 1 day trainings around Australia to educate attendees. I will be joined by Dr. Andrew Wilson and Ken Raiss at the National Property & Economic Market Update. Use the promotion code "podcast" to join me as my guest.

2018 is going to be a boom year:

1. My prediction is that 2018 is going to be a boom year for fright.
2. The media is at it again and there is no shortage of scary stuff.
3. If you look back every year has been predicted to be a boom year for fright.
4. I have invested during property slowdowns, high interest rates, and times when prices were thought to never go up again.
5. Despite all of this, the value of my properties keeps doubling allowing me to refinance and buy even more properties.
6. There is always bad news and scary headlines in the media.
7. This could have given me plenty of reasons not to invest in properties.
8. To be a successful property investor, you need to step back and not be scared by every doom and gloom rumour and report.
9. People are still living their lives, getting married, having babies moving house etc and a lot of people are getting rich.
10. We're still experiencing strong population growth and all these people have to live somewhere.
11. The fundamentals are sound when taking a long-term perspective.
12. There are opportunities out there with less competition than last year.
13. We are now entering a buyers' market. Smart investors buy in a buyers' market.
14. 2018 is a great time to educate yourself and take advantage of opportunities.

Mindset Message: It's all a matter of perspective

1. I want to put things into perspective. What are your most important priorities? What are you going to focus on and what are you going to ignore?
2. What if you only had 15, 10, or 5 years to live? How much time would you spend obsessing about investments and property rates?
3. What if you only had 1 year, 1 month, 5 days, or 24 hours to live what would you spend your time on?
4. Now that you have perspective, what are you going to do with the time that you have?

Rich habits you must teach your children:

1. Will your child be rich or poor? Are you, as their mentor, teaching them rich or poverty habits.
2. Science shows that by the age of nine we have learned most of our habits.
3. These habits come from our parents. We mirror our parents thinking, habits, and emotions.
4. Emulating bad habits can force you into a situation where you are eeking out a living.
5. The beauty of rich habits is that you only need one or two of them to transform your life. Habits like reading and exercising will change your future.
6. If you don't accept responsibility for your life, you won't even be aware of the issues that are causing you struggles.
7. Once you are aware and take responsibility you can make the changes in your life.
8. Parents are responsible for most of the poverty in the world by not teaching their kids success habits.
9. This is part of the reason why the rich get richer. It's not too late. People can change and become success oriented.
10. You can change your habits anytime all throughout your life no matter what your age.

Links and resources:

• Michael Yardney
• Metropole
• Rich Habits Poor Habits
• Thomas C. Corley Rich Habits
• Will your child be rich or poor? – 15 Poverty Habits parents teach their children
• National Property & Economic Market Update Promo Code: Podcast
• Dr. Andrew Wilson
• Ken Raiss
• I Spent 5 Years Studying Rich and Poor People and I Would Like to Share What Separates The Rich From the Poor
• Episode 1: What Makes an Investment Grade Property | Become the Pilot of Your Life, Not the Passenger

Quotes:

"If you look back, every year is a boom year for fright. As far back as I can remember, there have always been scary stories from the media." Michael Yardney

"What you look for is what you see. If you look for bad news, you are going to find it. If you look for opportunity, you will find opportunity." Michael Yardney

"It is so important to be responsible for your life rather than being a victim." Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

If you're curious about what will be affecting the property markets for 2018, you will love today's show, because I discuss 8 trends that will affect the property markets for 2018.

I'm also going to teach you one of the important laws of success which is the Law of Accumulation.

After 5 years of soaring property prices the forecast for our capital city housing markets remains mixed for 2018, with property values likely to finish the year higher than they started, but growth will occur at a slower pace.

The fact is, 2107 produced stronger average house price rises than many commentators predicted, however there are now signs that we've moved into the next phase of the property cycle as house price growth stabilises, auction clearance rate have dropped and lending to investors has slowed.

Looking forward, here are 8 trends that could shape our property markets in 2018…

• Price Growth to Moderate - The phenomenal price growth experienced by Sydney and Melbourne over the last 5 years has come to an end. What will happen to property values next year will depend in what the RBA does to interest rates and if APRA tightens the screws on lending further. Having said that…

• Interest rate will remain unchanged - The official RBA interest rate is likely to remain at 1.5% throughout 2018.

Australia's economy is still operating below its potential with economic growth not strong enough to justify an interest rate increase. The positive signs of jobs creation, falling unemployment and rises in full-time employment are being offset by slow wages growth, sluggish retail sales and a benign inflationary environment. Fortunately, the RBA will be pleased our property markets are cooling and will not feel the need to use rising rates to slow the market.

• APRA is unlikely to tighten its macro prudential measures - APRA is getting its way…. Under its watch stricter bank lending criteria have created a "credit squeeze" which has stifled the Sydney and Melbourne property booms. But this time round the slowdown has occurred in a low interest rate environment meaning our banks are in a healthy financial position and loan defaults are at a minimum. This means it is unlikely that APRA will need to tighten the screws further, but on the other hand it is too early for APRA to relax its guidelines.

• Jobs growth will continue - More than 335,000 jobs were created in the past 12 months, the majority in full-time work. And Australia's golden run of jobs growth is likely to continue to underpin our economic growth.

• Strong population growth will continue - Our strong population growth will also underpin our property markets. Last year, Australia's population grew by 389,100 people to reach 24.5 million by the end of March 2017. Demand for housing has averaged about 164,000 dwellings per year over the last 5 years and according to the ABS in the five years to 2021, continued strong population growth (underpinned by net migration of 240,000 per annum), plus some shifts in household composition (more one and two person households), means we're likely to grow by 172,000 households a year – a 5% increase in demand. Over the last year Victoria was the fastest growing state with a population increase of 2.4% and this soaked up much of the anticipated oversupply of new apartments in Melbourne.Net overseas migration accounted for 60 per cent of Australia's total population growth as we added 231,900 people to the population. Overseas migration was the major contributor to population change in New South Wales, Victoria, South Australia and Tasmania, whilst natural increase was the major contributor in all other states and territories.

• Brisbane will finally get its turn in the sun - If interest rates remain unchanged, APRA don't impose further lending restrictions and our economic growth remains steady, in the absence of any major international surprises this is what our research suggests is likely to occur to capital city property values in 2018:

1. The Sydney property market has run out of steam, but won't crash like some are suggesting. Instead it is likely to grow between +4% and 6%
2. Melbourne houses, townhouses and villa units are likely to be the best performing market - +6% to 10%
3. Brisbane's market will move up a notch, spurred by jobs growth and infrastructure growth - +3% to 6%
4. Hobart will again perform well - +6% - 10%; encouraged by speculators chasing the next hotspot. But remember how hot spots often become "not spots" – so with few long-term growth drivers, I would avoid the Apple Isle.
5. Canberra will continue its steady performance - +4% to 7% - but excessive land tax is a strong disincentive to property investors in Australia's capital.
6. Adelaide is likely to underperform again – 0% to 4% growth
7. The Perth property market may be near its bottom, but won't see strong capital growth for a number of years - it's too early for a countercyclical investment - -1% to +1%
8. Darwin has very few long-term growth drivers – but prices are likely to stop falling - -1% to +1%

Overall apartments are less likely to perform as well as houses and will continue to be influenced by significant levels of new stock coming on the market ahead of demand through 2018 – steer clear of new and off the plan apartments particularly in our CBD's

• A fight to quality - During the last few years FOMO (fear of missing out) led inexperienced investors and home buyers to purchasing almost any property that there budget would allow and they were fortunate as a rising tide lifted all ships. But as the market turns in 2018 we will see a flight to quality with well located A class homes and investment grade properties still selling well, but secondary properties languishing in the market

• More property investors will sit on the side lines - With market forecasts of subdued growth many would be investors will be questioning whether property still represents a smart investment. On the other hand, strategic investors who have a long term outlook will see the period of slower growth as a buying opportunity. Sure investors may not see double digit capital growth in the short term, but the slower markets will give smart investors an opportunity to buy the type of property they'd have to compete more strongly for over the last few years when there were more buyers than sellers. The type of property that will have them looking back in 10 year's time saying "boy I bought that cheaply!"

Mindset Message: The law of accumulation:

Understanding the laws of money and success. The law of accumulation says that every great financial achievement is an accumulation of hundreds of small efforts and sacrifices that no one ever sees or appreciates.

Everything you do or fail to do will impact your results.

1. Knowledge
2. Getting experience
3. Money - large amounts come about by many small accumulations

Links and resources:

• Michael Yardney
• Metropole
• Rich Habits Poor Habits
• Property Update App
• My National Property Market and economic 1 day trainings: Promotion Code: Podcast

Our favourite quotes:

"What's going to happen to property values will depend on what happens with interest rates and what APRA does to the availability of finance." Michael Yardney

"This slowdown has occurred in a lower interest rate environment, which means the banks are in a healthy condition and loan defaults are low." Michael Yardney

"Australia's golden run of job growth is likely to continue to underpin our economic growth." Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

2018 is going to be a very different year in property, so today we are going to discuss what is happening in each state around Australia and what you can expect to happen in our property markets.

2017 started with a bang and ended in a whimper.

In the middle, foreign investment slowed down, we embraced stamp duty, and hiked land taxes. Other disincentives were given to foreign investors and APRA slowed down lending.

Over the last property values rose 5.5 percent across all the combined capital cities.

As always, the property markets were fragmented. Only Melbourne and Hobart record value growth over 10%. Perth and Darwin's property values decreased.

Once a year I conduct a series of seminars around Australia, and I will be joined by Dr. Andrew Wilson, Ken Raiss, and local property experts. If you would like to attend for free use the Promotion Code Podcast at https://propertymarketupdate.com.au/

Today's discussion includes:

An update on the following:

Sydney Property Market with Ahmad Imam

• There is still good upside for investment grade properties
• The market sentiment is subdued and investors are holding
• Invest for long term capital growth and consider borderless investing
• Prices in Sydney should rise this year, but not as much as the previous 12 months
• You can't expect the same level of growth that we had over the last 4 or 5 years
• There will not be growth in secondary locations. This is a time to focus proven stable locations.
• People are looking at better class assets – a flight o quality.
• There is much less competition for the A grade assets because people are holding.
• Select the right location in the middle rings of Sydney and then find the right property there.

Melbourne Property Market with Kate Forbes

• The fundamentals haven't changed – we'll have another good year in property.
• Last year we had 144,400 new residents.
• There are not a lot of vacancies – vacancy rates are around 1.8%
• The Melbourne property market grew by 10.1% last year
• Finance availability is cramping the number of people that can get into the market.
• Foreign investors have slowed because of finance challenges and new taxes.
• The introduction of a "Window Tax" for properties that have been vacant for six months.
• Will this lead to owners putting them on the market.
• Invest for the long term especially in the inner to middle ring affluent suburbs that are built out and have a reasonable supply cap.
• Growth corridors did well last year. As the markets are slowing these buyers will have more difficulty.
• As things slow down there is a flight to quality.

Brisbane Property Market with Brett Warren

• Brisbane property had an overall growth of 2.45% last year, pulled down a bit by the apartment market.
• But there was solid growth of some housed - even 10 and 15% growth in superior locations
• You need to buy the right property in the right location to outperform the markets.
• Jobs and employment bring certainty and higher demand for housing.
• The Gold Coast may be a good market in the short term, but it is volatile and influenced by tourism.
• There is not enough job opportunity for long term growth on the Gold Coast. 60% of jobs in Queensland are around Brisbane.
• The demand for property will be where the jobs will be.
• Brisbane doesn't have urban sprawl and job opportunities in the outer suburbs.
• Buy in superior locations where all the boxes are ticked and demand is fairly high.

Other Major Capital Cities of Australia

• Adelaide is still speculative. There weren't a lot of growth drivers like jobs.
• Perth hasn't bottomed yet. Sales volumes are down, but people are still waiting to see if it hits rock bottom. Significant oversupply of apartments in Perth.
• Hobart is still Australia's most affordable capital city. The market is very small. This years hot spot can be next year's not spot.
• Darwin is still suffering from the effects of the end of the mining boom.
• Cenberra is a two tiered market. Detached homes rose, but apartments are holding back. The population should grow 6% by 2020. It may not be a good place to invest because of the large land tax.
• There are some regional markets which are also growing well.

The Property Markets of 2018

• The market needed to calm down. The growth wasn't sustainable.
• There won't be a bubble or crash in 2018.
• There should be more of a soft landing.
• Hobart should be the hottest market encouraged by speculators – so it's one to avoid.
• Melbourne should be the second best performing market.
• Canberra will also be a steady performer. Avoid the apartment market.
• Well located homes in Brisbane should do well.
• Adelaide should underperform the other cities.
• Perth is near its bottom.
• Darwin property values will continue to drop.

Links and resources:

• Michael Yardney
• Metropole
• Rich Habits Poor Habits
• Property Update App
• APRA
• Dr. Andrew Wilson
• Ken Raiss
• Ahmad Imam
• Kate Forbes
• Brett Warren
• My National Property Market and Economic Updates : http://propertymarketupdate.com.au Use Coupon Code: Podcast

Quotes:

"2017 was also the year when first time home buyers came back. There were more than 94,000 first time homes bought across Australia." Michael Yardney

"There was also a significant oversupply of apartments in the capital cities in 2017." Michael Yardney

"2017 was also the year that headlines in Sydney changed from boom to flat lining and doom and gloom." Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

With our property markets moving to the next phase of the cycle, how do you create capital growth?

Do you have to change your strategy?

Today, we discuss

1. Some of the myths of capital growth.
2. The "5 P's"that actually cause capital growth.
3. Some likely trends for property in 2018, and
4. I talk about what is ahead with Dr. Andrew Wilson, Australia's leading property economist from My Housing Market.

6 Myths About Capital Growth:

1. Population growth leads to capital growth. That's only partially correct, but you need to find the right locations with the correct demographics and people with higher disposable incomes so they can afford to pay more for properties.
2. Invest in any capital city and experience strong capital growth. Not true – in each capital city there are multiple submarkets. You can't just buy in any property and expect it to outperform.
3. Buy land and it will appreciate. Not all land is equal. Target where you will get above average capital growth. Inner and middle ring suburbs of our capital cities are the places to invest. Find areas that are gentrifying and locations where people want to live and are therefore prepared to trade space for place.
4. You can predict capital growth. There is no shortage of experts predicting the next hot spot.

But most have been wrong much more often than they have been correct - you must understand the level of accuracy of their predictions.

1. You are likely to get capital growth if you buy negatively geared properties. This is another myth as many negatively geared properties have experienced no or minimal growth. Negative gearings isn't an investment strategy, it is just the way the property is financed at a certain point of time.
2. New developments are good news for an area. Not necessarily. These may lead to local population growth, but they often stifle the supply and demand ratio. The demographic may have less disposable income or be overstretched.

The 5 P's of Capital Growth:

1. People
2. Purchasing power
3. Position
4. Property
5. Places

Some property market trends likely to occur in 2018:

1. Increased stock levels, as more vendors come to market and thousands of new apartments are completed following the construction boom.
2. A reduction in investor demand – due to lower consumer confidence and as owner occupiers struggle with affordability.
3. Flight to quality - the buyers remaining in the market will be pickier given improved supply
4. Auction clearance rates will fall back to the more normal rate of around 60%.
5. Price growth will continue – albeit at a slower pace, particularly in Sydney and Melbourne's best suburbs.
6. There will be some minor price corrections – a healthy outcome following such a prolonged period of rapid growth.

The Bottom Line: don't let yourself be distracted by the headlines. Yes, the boom is over but the opportunity to make money in the slowing Sydney and Melbourne markets will always be there if you keep a long-term view. There will be some good opportunities in Brisbane in 2018.

Links and resources:

• Michael Yardney
• Metropole
• Property Update App
• National Property & Economic Market Update Promo Code: Podcast
• My Housing Market Dr. Andrew Wilson
• Episode 1: What Makes an Investment Grade Property | Become the Pilot of Your Life, Not the Passenger

Quotes:

"After five years of an upward trajectory, we are now seeing affordability constraints, tighter lending criteria, and lack of consumer confidence. We have moved to a new normal." Michael Yardney

"There are two things you can do about the new normal. Learn the new rules and understand how they work and take advantage of the current available opportunities." Michael Yardney

"Real wealth from real estate is achieved through long-term capital appreciation and the ability to refinance and keep adding to your asset base." Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

What habits do rich and successful property investors share?

Today, we have another summer series episode of my show where I'm interviewed by Tyrone Shum of Property Investory. Tyrone digs in deep and asks what held me back when I first started investing in property investment.

He also asks me about the rich habits versus the poor habits of property investors and why some are more successful than others.

I explain a bit about the nuts and bolts of my own property investment strategy, and how I add value to property.

I even give some insight into my personal habits that have helped me achieve my goals.

Today's discussion includes:

• How Michael had a desire and dream to be a successful property investor, but his mindset conditioning would have only got him so far.
• Recognizing the importance of mindset and being mentored by Jim Rohn.
• What held Michael Yardney back when he made his first investment into property.
• Yardney's personal finance book, Rich Habits Poor Habits, he explains what sets it apart from other books on the market.
• Wealthy people do things and think in a certain way. Money habits include delayed gratification and saving and investing.
• Wealthy people also hang around with other wealthy people.
• How many people have had poor educations around money. People often have bad money habits and don't know how to get out of the rat race.
• Recognize what is not working and disempowering habits and then replace them one by one with empowering habits.
• The importance of having and being good mentors.
• Coming from a place of abundance and making other people wealthy while making the world a better place.
• Yardney explains the nuts and bolts of his own property investment strategy.
• How investor's today can be plagued with too much information.
• The importance of looking at what is going on in the future.
• Finding properties with continual strong demand. Population growth and demographics.
• How Metropole strategists come from a financial background and are wealth advisors.
• Yardney's six-stranded approach to identifying investment grade property to buy.
• How to add value to your portfolio.
• Michael believes in having a useful belief of taking responsibility for his actions and not blame others.
• Learning from mistakes and using those lessons to move foreword.
• Yardney's personal habits that helped him to achieve his goals.

Links and resources:

• Michael Yardney
• Metropole
• Rich Habits Poor Habits
• Property Update App
• Property Investory
• Jim Rohn
• Wealth Retreat
• Roger Hamilton
• Christopher Howard
• Brian Tracy

Quotes:

"If you suddenly become wealthy, but your mindset does not grow to your level of wealth you will lose that wealth." Michael Yardney

"Every year I upscale and upgrade the way I think about things because I want to keep growing." Michael Yardney

"What average people think and do is very different from what wealthy people think and do." Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

Are you interested in getting into property investment this year?

Either your first investment or to grow your portfolio – well today's show is for you.

Hopefully, you've been enjoying a bit of a vacation at the beginning of this New Year. Pam and I are currently cruising around South America, so this show is another episode in the summer series where I share the recording of an interviewed with me by Alex and Liz from the Finder Money Podcast

In this episode, they ask me about how I got started in property investment and I give some of my best tips for those looking to get into the property market.

During our chat I answer their questions and share the lessons I have learned from my hands on experience after buying my first investment property over 40 years ago.

In the Podcast We Touched On:

• How real estate investment is not a get rich quick scheme.
• Running into problems by buying quickly and not investing in the right type of properties.
• Residential real estate is high growth relatively low yielding investment.
• Buying for capital growth as opposed to cash flow.
• The most important difference between successful and average property investors
• The three stages of your property investment journey: asset accumulation, lowering your loan-to-value ratios, and then living off of your property portfolio.
• How real estate investing is a game of finance with some properties thrown in the middle.
• Finding properties that will have strong demand in the future – what I call investment grade properties.
• How investment grade properties are stable with above average market growth.
• Where an investor should be looking in Australia for their first property
• How important location is in the success of a property investment and how property type factors into this
• Capital growth drives your investment. You need to get your first property purchase right.
• Why it's wrong to buy an investment property you would like to live in
• How you know when you're ready to invest in property
• Michael's personal property investment strategy and how he selects an area to invest in
• The difference between investment grade properties and investment stock
• Investing where the job growth will be.
• Why I think Melbourne and Sydney are still good places to consider invest.
• What really drives property prices
• How having the wrong habits and a poor wealth operating system is why so many don't get out of the rat race.
• Using debt to leverage your money and buy appreciating assets that go up in value.
• Some of the mindset differences between the rich and poor
• Recognize that you are where you are today because of what you have chosen to do and what not to do.
• Become financially fluent, learn about money, and hang around with people who are financially fit.

Links and resources:

• Michael Yardney
• Metropole
• Rich Habits Poor Habits
• Property Update App
• Money Podcast #37: Michael Yardney gives us his best property investment tips
• Warren Buffet

Quotes:

"It's not the size of your portfolio that matters, it's how big the asset base is and how the properties work. " Michael Yardney

"Find other people who have achieved what you want to achieve and then do what they do." Michael Yardney

"Cash flow will never get you out of the rat race, but an asset base will." Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.