Some people believe that the property market in Australia is cyclical. In a broad and general sense, we think that is true. Generally, the market is led by Sydney and Melbourne and then it’s a ripple effect from there. People find it too expensive in those areas so they move to other areas, and in turn increase demand there and it booms, so people move on from there and so on. But boom locations usually have nothing to do with that cycle, and it is boom locations that you should be buying in if you really want big results.
One example of this general trend is Tasmania. Not a lot of people move to Tasmania, but when the rest of the country gets so expensive, people, especially retirees, soon realise that they can get twice the house and land for the same money in Tasmania. So they move there. In turn that creates demand and a boom follows until prices catch up with the rest of the country.
But if you really want to do well in property, you can’t just pick good areas; you need to pick awesome areas! If you want to know where the awesome areas are, then here is one secret: follow large workforce movements.
If you have got large infrastructure spending by the government or big business, and it results in the arrival of a large workforce all of a sudden in one location, there will be a property boom of some scale. The magnitude of that property boom however will relate to the ratio between the existing population and the new workforce arriving.
For example, if you go and spend $18 billion in Sydney and create 15,000 jobs, the impact will be far less than if you did the same thing in a regional centre with only 100,000 people.
If you can master the art of finding these places and buying there at the right time you will make a large amount of money very quickly. It really is that simple!
Join me tomorrow and I will talk about “Types of Booms”.
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