We’ve officially turned the corner! March was a great month for property and it’s only going to continue getting better.
The residential market is up 0.65%, with Sydney leading the way with 1.25%. These numbers are massive.
At Custodian our focus is on the big picture. We are experiencing the highest population growth in history. Listings are down 21% on a 5-year average as people don’t need to sell. Auction clearance rates are up 73%, the highest it’s been since last April when interest rates began increasing. Australia’s the wealthiest it’s ever been. According to Domain, rentals are down to only 18,500 properties across Australia. We are experiencing 50,000 to 100,000 net migration per month.
Often, we’ve seen the news and economists get it wrong. The news focuses on fear while economists base their forecasts on interest rates rather than looking at the big picture.
The treasury forecast that 2023 would bring 180,000 new dwellings and only 300,000 population growth. Yet the Urban Development Institute of Australia (UDIA) stated that Australia would be lucky to have 150,000 new dwellings. Meanwhile, we need 250,000 new dwellings to accommodate our population growth, which is closer to 500,000 to 600,000.
We simply do not have enough housing and we can’t increase that housing because we do not have enough builders or tradespeople. The Masters Builders Association predict that we need 500,000 new workers to build the amount of necessary housing.
To be a Custodian in the 2020’s, with our 20/20 vision is a once in a lifetime opportunity. We will never see this kind of rapid change again. Not even our children will see this sort of change in their lifetime!
Whatever you do, do not stand still. The market’s turned and we need to get ahead and make the most of it. Most importantly don’t do nothing.
I often think of a quote from Shunryu Suzuki, “Zen mind is beginners mind”. The experts mind only ever sees one outcome; the beginner sees lots of outcomes. We need to ensure that we continue to think like a beginner to move forward and maintain our momentum.
The Solution to the Housing Crisis
The Brisbane City Council (BCC) have finally caught on to what we’ve been saying for years. The solution to the housing crisis is density. The BCC has introduced new regulations allowing granny flats to be built on any size of land. This is great news for us, with Custodians owning about 4,000 homes in the BCC.
We need to take advantage of these new regulations. If you have a 400m2 block of land, with an average house size of 200m2, you’re only using half the block! As I outlined in 7 Steps to Wealth, the most important thing is to build a portfolio of land. Use the income from the house and the depreciation the government gives you to pay off the house and granny flat and soon enough the land will provide you with more income and more tenancies.
The Mindset Reboot
Mindset is so important, and I want to focus on rebooting our habits.
Success is repetition. For the past 40 years I’ve brought property. Why? Because I’m focused on the big picture.
In 1984, I bought my first block of land, which was 1000m2. I paid $16,000 and spent another $32,000 building the house, bringing the total to $48,000. Today that land alone is worth $1 million. This has always happened, and it’ll continue to happen thanks to inflation.
When Custodians begin their journey, they’re dedicated to changing their habits and practicing repetition and then doubt and uncertainty makes them stop.
Changing habits comes down to pushing through doubt and uncertainty and it’s especially relevant in real estate. In the 40 years I’ve spent investing in property, I’ve seen 15% interest rates, 12% inflation and a GFC. Despite this housing prices have continued to rise.
Dealing with doubt and uncertainty is about controlling our thoughts. 99% of our thoughts are negative or redundant, affecting our thinking.
Personally, I deal with doubt and uncertainty as a man of faith and by focusing on the big picture. The key is abundance. I’m constantly looking for abundance. I don’t see crisis, I see opportunity.
Every morning I meditate for an hour, read something that connects me with my faith and sit with my family to eat breakfast. This routine reminds me I come from abundance. If we compare that to other’s morning routines which involve coffee and phones, it’s a morning filled with doubt and uncertainty.
To maintain momentum, at the end of each day ask yourself what you’re grateful for.
Finally, you need to turn off your phone. Use it as a tool, not as a habit. I often don’t have my phone near me and don’t look at it for two or three hours after I wake up.
I want you to focus on making small changes. You don’t need to start with an hour away from your phone each morning but try thirty minutes. These small changes will begin to reboot your mindset.