A Perfect Storm is Emerging. Here’s Proof the Train’s Already Started Moving

1. Interest Rates are now at a 60 year low: When the Reserve bank of Australia (RBA) started slashing rates in November 2011 – property demand started to rise and the effect is now filtering through to Australian housing prices.
   Historically when interest rates record a decrease greater than 100 basis points, real median house price growth starts to feel the positive effects within six months.
   With the reserve bank having slashed interest rates by over 175 points since November 2011, the effects are unprecedented.
   Look out. The graph below shows that while we’re getting lower increases compared to previous rate cuts in 1996, 2001 and 2008… the magic is about to begin…
   
   Here’s even more proof the time to invest in real estate is when interest rates are at their low point…
   
   Take 1993 for example… while property didn’t really take off at this time because it came off a significant crash, it was still a great time to accumulate because prices were at rock bottom and interest rates had come down, so you were starting to see strong yields from rent.
   The next bottom was during 1996–97. If you look back in history, that’s when prices literally took off. You could have virtually doubled your money in the next few years of rapid growth.
   Move forward to 2009. While not all markets have jumped and some markets have moved faster than others, this was how I knew Sydney and Melbourne were about to rise when all the economists were scared the sky was about to fall in. That’s why you need to be at The Great Real Estate Boom Ahead Superconference and understand why we are at an all time low and sitting on a massive opportunity you don’t want to miss.
   Look where interest rates are now… Historical lows and in all likelihood could go even lower. You know what that means, real estate investors that attend my event and take action are likely to make a small fortune in the next 14 years.
2. China and India is buying into this country like droves: Did you see how many Chinese people were in the photo in the newspaper article above?
   It’s a sign of things to come: According to property researcher Kevin Stanley, Asian developers have spent more than $1.1 billion on potential sites in the past three years.
   There’s development applications in on all of these sites. There are 55 separate projects, bringing 2,000 houses and 19,000 units to market in Melbourne, Sydney, Brisbane, Gold Coast and Perth.
   These developments have a collective value somewhere north of $10 billion.
   Yep, it’s big money, and it’s going to have a huge impact on the market. Those 19,000 units are 30 percent of the 60,000 units typically brought to market in any given year in Australia.
   Let me ask you something: the media keeps telling us that the property market’s soft. CBD apartments are supposedly a ‘wasteland’. Building a Great Wall of Apartment Towers in Melbourne is nothing short of crazy.
   If that were true, why would the Chinese be placing such big bets on Australia? Believe me, there’s a lot they know that you don’t. They have access to tools, insights and understanding the average Australian watching the evening news is completely oblivious to.
   And unless you wise up and get smart about what’s happening, they’ll get rich and steal all the profits lying in your very own backyard.

Are you convinced yet?

Add to these 2 factors, that the governments live and die by the fact the only way people get wealthy in this country is through real estate prices (with 67% of people owning their own home) and you can see why the only way property prices are going is North.

Of course, there are many so-called-experts who disagree with me but…

The Economists are Wrong the Majority of the Time

For instance, right now they’re jibber-jabbering about the record expansion of credit and how it’s going to affect bank lending, suggesting our house prices are unaffordable compared to other western countries, and leading you to believe the sky is going to fall in.

But you should ignore them.

Why?

Let’s take a look at their track record.

Remember reading this…

“The Australian real estate market will fall by 20% now and 40% in the long-term.”

That was Steve Keen. When? Back in 2009. He even made a bet with a Macquarie banker, Rory Robertson that if his prediction didn’t come true, he would walk from Canberra to Mount Kosciuszko wearing a t-shirt with the slogan: “I was hopelessly wrong on house prices, ask me how”.

Steve lost the bet and walked to Kosciuszko. But that’s no the worst bit.

He even sold his apartment in Surry hills in 2010, just to prove his point…the bottom of the market…what an idiot!

Sydney and especially Surry Hills is up 13% since his prediction… good one Stevo!!!

At that same time, I told all my students to go in the opposite direction.

But maybe we just dodged a bullet.

How about another one?

“Aussie house prices are 40 percent overvalued and will be one of the last major asset bubbles to burst.”

That was Jeremy Grantham, from CMO, with over $100 billion in funds under management. When? Back in 2009.

How about this?

“Australian homes are over-priced by 25 percent, making them the fourth-most expensive in the world. There are signs of a bubble emerging.”

That was the IMF back in 2008.

And then what about this:

“The Australian property market is definitely looking frothy. Australia’s housing market has weakened. Home prices tumbled by an average of 8% in Sydney and by 13% in Melbourne in the first quarter. Anecdotal evidence suggests that the slide has continued since then, signalling that prices have farther to fall.”

That was the doyen of sensible – The Economist magazine. When?

June 2004.

I could go on and on. We’ve been hearing the same old story for years, from way back in the dark ages, well before the internet.

So for Kiki and the mob to say that it’s going to pop, any day now, starts to sound a lot like the Chicken Little that cried wolf.