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By Terry Taylor – Specific Property
Come on – admit it – you’ve got butterflies in your stomach. Nervous, maybe very nervous even scared of what we are about to experience in investment markets in Australia. If that is what you are feeling right now then you are probably just like the person next door to you, the person next door to them and the people across the road as well.
The world, particularly since the Global Financial Crisis, has been going through some relatively uncharacteristic turmoil, for our times at least, which we obviously don’t like and which makes us very nervous and we don’t seem to be at the end of this turmoil yet, and may not be for some time.
Other than the financial and humanitarian challenges the world faces we are experiencing a technological revolution and somewhat like the industrial revolution, which started more than two hundred and fifty years ago, is going to change almost everything we know and are used to. The Industrial Revolution changed everything that the people of those times were comfortable with and thought would never change.
But it did change and we are at such a point in time again when there will be massive disruption to the way we do business and transact with each other. Just as then we will come out of this period and there will be some who lose but many others who recognize the changes that are occurring will gain massively by the opportunities those coming changes will provide.
So what does that mean for property and should you be investing in property or shares or other asset classes now when the market appears so volatile? The answer of course is YES and you should start or continue to build your assets as and when you are able to do so safely. There can never be any guarantees given but you can certainly reduce risk by a careful selection process designed to minimize the risk and this is the case for all types of investment. The reality is that the biggest risk you can take is to do nothing and not to invest at all.
If you are investing in residential property then that property needs to be close to where an increasing number of us want to live, predominantly because of lifestyle, amenities and of course , more importantly, that is where the new jobs of the new technological age will also be.
On a final note, and if you would like to have some comparative asset class performance data over the last twenty years, go to the ASX website and find this link http://www.asx.com.au/documents/research/russell-asx-long-term-investing-report-2016.pdf to go to the ASX 2016 Long Term Investing Report prepared by Russell Investments.
In this report you will see that residential investment property has well and truly outperformed every other asset class by a considerable margin over the ten and twenty year periods examined. Now a word of caution, this does not mean that every property will perform well or the same as every other property.
That certainly will not be the case in any circumstance. I have a saying that “there is always too much of the wrong kind of property and never enough of the right type of property”. Our job is to help you find the right type of property.
Research and knowledge is required to determine what is happening in the market, how changing demographics are affecting property choices of old and young alike and that we need to understand not just what has previously happened in the market but what may happen in the new technologically changed world that we are going to live in.