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Ben Kingsley Blog post by Ben Kingsley

Property Investor Commentary

Generalise the residential property market at your investment peril.

Housing prices go up and housing prices go down as measured by average house price or median house prices data.  But there is no such thing as the average or median house or unit, or apartment or townhouse for that matter.  No dwelling is exactly the same as any other dwelling, right across Australia.

The HIA reports that there are 8.57 million residential properties within Australia.  This figure increases by around 151,000 per year or 2903 a week.  As an investor can we buy them all of them? Of course not.

Compare 8.57 million potential investment opportunities to around 2,200 stocks on the ASX, and you can understand the challenges and risks to the unsuspecting investor.  But this comment is not about the challenges—I could write a few books on challenges and mistakes property investors make, and if you review the archive newsletter on our website you will get a good idea of what I am on about, but I digress…..

Generalised commentary of the property market as a whole is fraught with danger and is technically misleading to owners, buyers and investors.  Generalising values simply has virtually no relevance to any one of the 8.57 million properties within the market!

As I’ve been commenting on over the past few months—the ‘noise’ in the media is starting to increase about a potential property bubble, and yes, as I have predicted at the middle of this year, prices in certain mortgage belts and some top end of the market areas are decreasing.  This will continue into 2011 and may get even worse.  However solid investment properties in superior locations, offering relative affordability to relative buyer interest, will not be as affected.  This position is supported by agents reporting great property in great areas are still achieving solid sales results, and demand for these types of rare properties remains steady.

My end of year message is the same consistent message—Great Properties in great locations are always in demand and always outperform—very true in the good times and still true in softer times.

So forget the noise, unless your not sure about your property or location…..

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