There are investors who, no matter in any field, are only looking to make short-term real estate investments. That is, buy in low price, sell in high price; buy quickly, and sell quickly. These investors were once dominant in the Chinese stock or real estate market, so they also want to apply this experience to the Australian real estate market. Is this golden rule feasible in the Australian property market?
The answer is no. As a kind of industry, Australian real estate investment is a combination of buying and selling. The question is what's the reason to sell?
In fact, there is a conservation law of investment in Australian real estate - "Buy one, keep one".
First of all, some people think, house property appreciation always increases in the number, only buying in low price and selling at high price to get the real cash can be regarded as real profit. As a result, they always lack sufficient tolerance for the inherent fluctuations of the real estate market, and they can't wait to sell the property for "reliable" cash before they feel secure.
Secondly, some may be investors in a variety of industries for the sake of maintaining "cash flow", feeling that holding too many properties can fix too much cash. So the first thing that comes to mind is selling their investments when they're struggling to hold too much property, or when they're struggling to operate in other sectors, especially when they're dealing with a dilemma like the financial crisis.
Thirdly, some investors with small amount of capital, influenced by the traditional Chinese concept of "seeking stability and conservatism", pursue the practice of "sell one, buy one". So before they buy a new property, they think about selling the original one.
Finally, there is a category of people who are only planning to invest in short-term Australian real estate in any field. That is, buy in low price, sell at high price; buy quickly, sell quickly. These investors may have been successful in the Chinese stock or real estate market, so they applied this experience to the Australian real estate market.
The Australian real estate investment theory of "buy one, keep one" is exactly the opposite of these investors' idea. Why you always shouldn't sell real estate no matter how many houses you buy, in terms of investment in real estate, especially real estate investment in Australia, and how can you do not sell property?
The owner of the land is always the biggest winner of the whole era
The nearly 200 years of human history tells us that since entering modern society, the whole society has consisted of three kinds of people: workers, capitalists and landowners. While today's workers have evolved into the "white-collar class," what remains the same? That is working eight hours a day; it's a turnover of five days a week; It is the year-round effort; A lifetime of hardworking; however, no matter how high or low wages are, once you loss your job, you will face the dilemma of being in poverty.
What about capitalists? Of course they earn more money than the workers do, but do they have a comfortable life? He will rent land from others to open shops, businesses, factories, consider how to raise costs; how to control spending; how to manage employees. The workers only need to work 8 hours a day, but the capitalists have to devote all their energy to their business except sleeping. Sometimes they have to do things by themselves. They also need to face business failure, bankruptcy and the risk of failure, which makes them more painstaking than workers.
Then who's the happiest? That is the landlord who rents the land and the factory buildings above the land to the capitalist, they do not have to work, do not have to worry about management, regardless of the drought, flood and rain, and they just collect the money. It is only in this world that workers can be hired everywhere, capitalists can do any business, and the land is limited only, so the owners of the land are also limited. The happiest people in the world are those who can get profits from the land.
The more properties you have, the more lands you get
The same situation is in Australia. When investing the real estate in Australia, because the houses in Australia are with land, buying a house is in fact buying the land, more property ownership means more land possession.
Australian real estate investment in the past half century presents a steady upward trend: in the 1960 s, Australia's house price was at an average of $8000 / set, rose to $80000 / set in the 80 s, to $150000 / set in the 90s, and up to $300000 / set around 2000, now it is $560000 / set (2010). Though things may change, the profits of the property will not change for you, or your family's offspring as an "Australian landlord". Only land is the ultimate "real gold".
Australian real estate investment: "flexible and flowing bank"
Australian real estate investment is not only a "store of value", but also a flexible and convenient "bank". It depends on two things.
On the one hand, the habits of local Australians have fostered a stable market for renters. According to the survey, 30% of the permanent residents in Australia (that is, excluding overseas students) live in long-term rented houses, and some even rent houses for life. And unlike the Chinese, not all of these long-term tenants are from the low income group, some of them are from stable middle class with high incomes. With the floating population, renting houses must be a rigid demand, and a large number of tenants support a strong rental market. Because of this, the rental income from leasing a property that is purely for investment (rather than self-owned housing) can partially address many investors' concerns about cash flow.
In addition, the Australian loan policy is the most lenient for residential houses, which is different from other countries (such as China). Many Chinese investors do not know much about this, so they lack confidence in owning houses. For example, according to the regulations of the bank of Australia, if the property purchased by the buyer increases in value, the buyer can apply to the bank for 80% of the appreciation as a new loan, and the amount of the loan can be used for investment in other industries. The advantage is often used by many local investors and business owners for cost - raising or capital turnover. So don't worry about property clogging up your money.
Australia real estate investment, refuse to speculate
Here, the editor's view is to "speculate" on the Australian real estate market. In order to maximize profits because of "speculation", it may take the risk of tight capital chain from the perspective of investment. In terms of target, you may meet the risk as "all your eggs in one basket"; In addition, as Chinese real estate speculators, exchange rate risk and macroeconomic risk will be greatly magnified because of their activities. Any stable investment industry is not guaranteed to get profits without loss in a short period of one or two years. Therefore, anyone who wants to invest in Australian real estate should not use it to gamble.
Today, more and more Chinese investors are no longer what people used to call "real estate speculation group", because they do not use the property as a speculation to buy and sell, but they have learned to hold it for a long time. Therefore, if you want to be a successful real estate operator, you must learn to "Buy one, keep one".