By: Rosemary Johnston- Wednesday, October 08, 2014
A client sent me a link to the latest BIS Shrapnel report as published by Property Observer. I was impressed. He is a relatively new investor who is keen to learn more.
BIS Shrapnel is a reputable research group that do economic research. They explore the trends for economic growth that drive the economy and from this offer a forecast for property growth over time. Their latest publication forecasts that Brisbane is set to grow 17% over the next 3 years, with Sydney at 9% and Melbourne at 5%. Many have been touting Brisbane as the next opportunity for some time however few have been disciplined enough to evaluate the length of time of the opportunity.
Most touters are property commentators, who are offering opinions. Opinions are the realm of real estate law. An agent is paid to have an opinion on the price of a property in the current market, or a rental appraisal, their opinion of the rent that can be achieved. Property investors relying on someone’s opinion is far too exposed for my comfort, especially as most agents specialise in their local market. I want to see the evidence and stack up the facts across the country.
In comparison Property Investment Advisors are Advice Professionals – they talk the facts. They stay close to the economic experts and can provide information about the five key capital growth drivers for each of the population centres over 100,000 people in Australia.
Availability of Money
Population Growth
Confidence
Infrastructure, and
Government Policy.
If we know to how anticipate changes in local conditions due to the capital growth drivers then we can increase our opportunities for success. If we buy an above average opportunity in an area with above average capital growth nationally then we are really beginning to identify where the best results will be. If you have a forecast from a reputable group for the length of time a capital growth wave may be active there is less uncertainty especially compared to an individual’s opinion. If you want to grow your portfolio rapidly and if Brisbane is forecast for 17% then we should be able to find opportunities that can deliver 20%, 25% or even 30% capital growth. If Melbourne is forecast for 5% then we might be able to deliver 6% or 7% or 10% capital growth.
If you want to kick start your portfolio the real estate agent can show you what works in their opinion. You are going to need more than that. Property investment Advisors consider the economic facts to appreciate where the five capital growth drivers are strong and then search for local opportunities. They can show you the facts, show you the expert research from reputable firms and you can make an informed decision. No need for any opinions.