Recently the Australian Bureau of Statistics warned our population growth is slowing. So does slowing population growth pose a risk to property? Michael Yardney discusses whether this slowdown pose a risk to our economy and pull the rug out from under our property markets?

Why would you want to look after your own management, whether it is a single property or the the strata management of a block. Michael Teys from Block Strata tries to answer that for me in in the process you’ll see, I think, why you would have to be crazy.

Can you lodge a caveat over the property of someone who owes you money? When can a caveat be laid and what can you do if someone slaps one on your property? Find out today.

We can tell you about a country wide prohibition on yet another round of dodgy Chinese-manufactured cabling products that have gone into homes in Australia. Who is at risk and what can you do?

AMP Senior Economist Shane Oliver shocked many people with his prediction of a 7.5% downturn in the Australian property market. He talks to us today and we get to the bottom of his claim.

Smart investors know that if it looks too good it probably is. That could be the case with off the plan purchasers but if you are going to buy off the plan, Shannon Davis explains how best to do that.

 

Transcripts:
Shannon Davis
Kevin:  I was on a plane recently and overheard a conversation. Someone was talking about how they had made a lot of money out of real estate, and the way they had done is that they specialized in buying properties off the plan – this is before they were even constructed or even started construction – and because the developers had to pre-sell a number of the apartment blocks, they were quite prepared to discount the first few just to get some numbers up so that the banks would feel good about it. He was getting an automatic discount at the front, and he would then on-sell them several years later, given the fact that the market would move forward.

That may have been okay a couple of years ago. I wonder what that strategy is like today. It’s a conversation I want to have with Shannon Davis from Metropole Property Strategists, who looks after the Queensland side of the business.

Shannon, thanks for your time.

Shannon:  No worries, Kevin.

Kevin:  Not a bad strategy, maybe 15, 20 years ago, or even 10 years ago, but does it work today?

Shannon:  Well, if you get to put a small deposit down and the market does its thing in the meantime, and you settle two years later in a rising market, then sure, that’s a great strategy.

What we’re seeing more recently, though, is that maybe the concentration, the size of the developments have been a little bit bigger, and sometimes the developer can actually be your competition. If people put down a small deposit, their circumstances change, and the developer is selling off stock at the same time as maybe they want to sell off – shortly after completion – therefore, that discounting actually is a bad thing for the investor.

Kevin:  Yes, it pulls it back down. That strategy I talked about at the start is okay if – as you said – you get in on a low deposit and you can actually achieve a discounted price, and then assuming that the developers sell all the stock on completion, you may be able to turn it over. But as you said, you could be in competition with the developer.

Shannon:  Yes, that’s right – and any other investors who have had a change of circumstances. And especially if it hasn’t gone the right way, no one wants to settle on a property that’s worth less than what they were wanting to buy it for. I think this is news right now for people in Brisbane, Perth, and Melbourne because we’re starting to see in the CBD areas a bit of an oversupply in those capital cities.

Kevin:  If someone wanted to buy off the plan, what should they be doing, what sort of due diligence, Shannon?

Shannon:  I think floorplans are really essential.