The acceleration’s actually positive in England.So it isn’t a given, but compared to other bubbles around the world, the only bubble that compares to ours in the past is the Japanese bubble.
I don’t see us having that big of a fall, but I see % as being modest in terms of thinking of how far it could fall. Again, the one wild card here is Chinese buying. And as soon as there are problems with house prices.
I can see the Australian government reversing its current www.melbournevaluers.net.au attempt to stop overseas purchases and encourage them back again if it keeps house prices rising. So I can see them going that.Ryan Okay. I guess there’s more at play here than just mortgage rates of Australians. We ‘ve also got to take the global economy into effect and other countries like China investing in Australia.
Steve And politics in China. Because if the Chinese continue to want to get their money out because they’re afraid of a collapse in their economy and the crack down by the communist party, then we can get flooded with money. If the communist party cracks down success rally, people could be forced to sell their properties over here.
So the final gamble people are making is what’s going to happen in China. That’s a pretty big gamble.Ryan That is a pretty big gamble. We’re talking about another country’s government making a decision that could affect our property prices here in Australia.Steve Yeah, that’s right.Ryan Okay. Wow, I’ve learned a lot from this. I really appreciate you for your time and taking.
Best Valuation and won’t name-names but they know who they are can’t believe they get a TV show and a column in the paper anyway we move on how did he know he don’t you are you should know I mentioned a bee that might work it out I saw some of the listeners light work out who that is so yeah if we got flooding so absolutely we need to understand peak flood events storm events bushfire events those types of things that will risk the marketplace on a macro level so you know again these are some of the things are outside our control but if we if we make a decision now to invest because of climate change we’re well you’re still going to have to be around you’re still gonna have live a little while longer exactly you don’t want sort of just live in a box.
Property Valuation and don’t doanything the way you online house valuations can mitigate thatbecause I agree is in prison forexample we can actually see records ofthe in the floods yeah so weas an advisory team will not buy correcta property for a client that’s beenaffected by a flood pride what’sinteresting about the in the floods is was higher water level affected more people because of density flood level was actually hi okaybecause oh yeah the point of that isyou can mitigate I guess weather isbecause Brisbane is the river city it’sgot a big damn it has to let go and there’s a huge amount of rain and that’s got to run downstream and youknow.
I remember saying we all rememberseeing that we are boardwalk down at thebottom ago getting smashed under thestory I absolutely get done but we wedon’t buy something that’s beenpreviously affected now there are peoplewho are speculators all going to matewho bought a property that was underwater and injure pillions made quitegood dollars because there’s yearsbetween floods and so he’s just takenapart and said i can buy cheap i canrenovate add some value and move on andpeople will forget quickly and they maychange the infrastructure de ver to bethat water I won’t you know that I’llsavor these events even though they’reone in a hundred year events we knowwhat happened twice in years or foodso do you think one in a hundred yearsit doesn’t mean it happens once everyhundred years just go there’s aone-percent chance of it happening everycorrect that’s a really good point sowhere the risk is definitely a risk butyou can mitigate even so you know youlook at.
The storms the storms areprobably the hardest one because up inFar North Queensland they’ve gotinsurance premiums that reflect thatthat’s pretty a sort of ad hoc andrandom but ultimately you know they theysurvive as long as you can have a lookat previous flood level history that’sthat’s a good and be trans let’s notforget the rising king tides these bigstorm surges you know we see videos ofand new stories of houses falling intooceans and all of that because of theselarger storm events so you knowbeachfront land which we would consideris absolute scarce you want to make surethat if you’re buying beachfront landwhat are the risks associated witherosion and those types of things aswell so it’s not just the big stormsthat come through and the floodingflooding it’s also these storm surges inthese locations where what we wouldclass as beautiful prime real estate canalso be impacted through through weatherevents so the question of those sorts ofproperties are are they investment gradebecause I make for beautifulowner-occupier residences but for mostpeople they can mitigate the fact thatit’s probably a fair way out of the bellcurve not impossible but I stretchdefinitely not been some out of the bellcurve for most property investors whoare looking to probably spend submillion to buy so that’s kind of the youput it boring but important the.
The value of property has gone up or is it just in-rate with inflation, or that %?Simon It’s generally in-rate with inflation. I mean, you can’t go higher than % from the annual rate and generally, it’s CPI’s, they’re all % is the industry standard. Bust does vary. I mean, you know, people do try to get more.Ryan And that’s up to what? Do you negotiate that at the start of the contract or can negotiation ate it mid-contract?Simon No, it’s start of the contract. If it’s a plus , which is generally a standard sort of a lease term for a small office. You would put those rent increases in the initial contract in the beginning.Ryan And what do you mean by plus ? Sorry.Simon So, plus means you’ve got a -year lease and at the end of that term, you have the option to renew that to another -year lease if you wish. So, if someone wanted that particular office, you’ve got the first right of renewal before it goes back on the market.Ryan Okay. So, that’s for the business who’s renting from you. They can get another -year lease from you. So you can’t just kick them out and get someone else in.
They have the first chance to re-lease that property from you.Simon Yeah. It is a renewal of a lease. Depending on the case by case.Brisbane Property Valuers Generally, at the end of that -year, if you, as a landlord is unhappy, then obviously, that’s the break of the lease.At that point you can move them on.Ryan Okay. So, we’ve talked about some of the differences between residential and commercial.And I think I’ve got my head around it, you know, you’re generally going to need a larger deposit. Rental yields tend to be higher for commercial properties. You’ve got expenses are paid by the tenant themselves. You’ve got longer leases with increases annually throughout that lease. And then, you’ve also got potentially longer vacancy rates in order to get someone in but once they are in, it’s going to be more consistent for you. Is there anything – we were going to talk about what are the advantages.
They can get another -year lease from you. So you can’t just kick them out and get someone else in. But basically, all of those things except the longer period of vacancy rate are the advantages of investing in commercial property. It seems to make a lot of sense to me. I guess, people would need a larger deposit in order to get into it. So, is there anything that we’ve missed that people should know about investing in commercial property?Simon The biggest thing is – one of the disadvantages, I would say, would be that typically they have low capital growth.