Reasons for Making Mobile Marketing Your Priority

In the marketing arena, marketers are always on the lookout for great things that will keep them ahead of their competitors in the market. You do not have to worry anymore because the solution lies in your purse or the pocket. We are living in an era where mobile marketing is bringing forth a tremendous opportunity for marketers to a greater level. Cell phones help the marketer to reach wider audiences in real time and on a personal level, which is a different engagement you cannot find in other communication channels.Significance of Mobile Marketing to BusinessesAccording to the recent most statistics, almost all customers own a mobile device. Seventy percent of the customers have a mobile phone, seventy-five percent own a laptop, and fifty-five percent own a tablet. At least seventy percent of this population uses their mobile devices for accessing the internet and not the laptop. With an increase in the population of smartphone users, the number of devices in the world exceeds the current population.Using the mobile device is the most viable option, and marketers need to make adjustments towards this medium as many users possess these devices. The extensive use of mobile devices among customers is a growing and crucial part of the market. It helps in unlocking the potential held in the massive, captive, expanding, and engaged audience.Nowadays, many companies are taking the full advantage of this option as it is the new thing in the market. In case your brand is not in mobile marketing, you need to make sure that you get a bandwagon as your competitor will leave you behind. Below are some reasons as to why businesses have to give priority to mobile marketing.i. Social media offers a platform for advertsTwitter, Facebook, and other platforms have understood the potential that resides in mobile marketing. They have recognized this potential and have evolved their adverts platforms for you to target mobile customers efficiently. All you need to do is clicking a button to start. This change will take a few minutes if you use social media marketing.ii. Mobile Advertising Reaches New and Broad AudiencesThe number people who are using mobile advertising exclusively are increasing. If your business is not using mobile advertising, then you are not going to reach your target audience and potential customers.iii. Retailers are Getting Mobile Arrangements WronglyThe news around nowadays shows how retailers are struggling to keep their profit margins high as a result of poor returns. Most retailers have taken their employees and shareholders by surprise in recent years because of a massive decrease in sales and net profits. Such companies view mobile marketing and e-commerce as an option when they are planning their budget. However, despite the vast opportunities the channel gives, the retailers struggle in investing in mobile marketing which makes them fall into the rat race of dwindling sales and profits.iv. Mobile Devices are Growing Online GrowthWith improving internet infrastructure and escalating smartphone penetration in the world, mobile devices have become a primary method that consumers use as a gateway to accessing the internet. Recent research shows that internet access by use of smartphones is a daily action for more than 83% of all users in the world.v. Google Advice Retailers to Use Mobile Marketing The main reason that will make you start mobile advertising is the Google Mobilegeddon update which penalizes websites which have not begun to put mobile marketing into consideration. Your site has to be easy to browse and responsive on mobile devices. In simple terms, your site will get a slap from Google by going down in the search engine ranks. These penalties are getting stricter with time, and your company has to take necessary measures before feeling the impact.vi. It is PersonalIt is hard to get brand close to the audiences when you are doing it behind a computer. Using mobile devices is however different. These devices are special accessories which people carry along at all times. They provide a different physical aspect as compared to other media.This form of marketing is personalized because it allows retailers get closer to consumers. You will have a high chance of converting these people into high-paying customers. For now, mobile marketing is in the market to stay, and researchers say that it will be gaining momentum as time goes. Businesses and firms that are waiting will find it hard to get on board making them spend a lot of money.vii. You Have the Chance Of Hitting Them Time and AgainIn case your strategy is targeting desktops, you need to put in mind that there is a possibility that your audience is also using mobile devices. Therefore, it might take a few attempts to reach and resonate with customers. In case you miss the laptop chance, use the smartphone to get him/her and convert the viewer.viii. It is Getting Costlier With TimeFacebook advertising is the best example when looking at what might happen in the event an advertising method has grown in popularity. Costs have continued rising in the recent past for no good reason. However, you might attribute it to the increase in the market competition.The mobile marketing space is similar; you will have to engage it now or later. It is advisable to do it now because tasting costs are quite affordable than wait for the future when you will have to break the bank before gaining any return.ix. Mobile Advertising Opens Up Possibilities and Virtual RealitiesIncluding exciting technologies such as virtual reality will make mobile ads more useful and engaging. The vast options show that it is easy to make a profit from this channel. Therefore, you need to understand that there exists an opportunity for all businesses in all industries.x. Mobile Marketing is Large and Has Taken ChargeRecently mobile advertising had gone back to face to face mode of shopping. When the internet became populous, the mobile has once again hit the market spending a lot by the use of mobile devices. Research says that by 2018, more than 25% of business profits will be coming from mobile devices. Therefore, mobile advertising is a modest way of ensuring you get profit as people are always ready to purchase via their smartphones.

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Australian Residential Property Market – What Lies Ahead for Investors?

By the end of this article, you will discover I have made a prediction which is the exact opposite of what most people believe. You’ll also discover why I am happy to put my prediction in writing so that you can verify my claim in the future. Let’s check out what determines property price movements. From my observations:
Short-term property price movements (within 1-3 years) are usually determined by human emotion (also known as human insanity).
Medium to long-term price movements (3-10 years or more) are more likely to be beyond human insanity, hence they are more predictable and controllable.Can we really predict human insanity? Some of the most intelligent people have been put to the test and still failed miserably. Economists have the unfortunate job of predicting human insanity, hence they earn the reputation of “having successfully predicted 9 out of the last 5 recessions”. What is the difference between human intelligence and human insanity? There is a limit to human intelligence. So what does determine property price movements over the medium to long-term? In my opinion, amongst many other things, property prices are predominantly determined by two factors:
The money supply of a nation
The wealth of a nation.The money supply of a nation.Let me explain. The money supply of a nation. Let’s take an extreme example to create a simple demonstration.
Let’s say on this little island country called Australia, a few thousand years ago, there were only 10 houses (probably called sheds back then), and there was no money being used at that time.
The island chief decides to issue some money called Australian Dollars for circulation. For the sake of simplicity, he decides that the money issued can only be used to buy properties and nothing else.
The island initially issues only $10, so each house is therefore priced at $1 each. (Amount of money available divided by number of houses.)
A year later, the island decides to increase the money supply to a total of $100 still with the same usage restrictions (can only be used to buy houses). Without any improvement to the properties, each house is now priced at $10 each. ($100 divided by 10 houses, equals $10 each.)Now you can see how property prices can go up just by increasing the money supply of a nation. We don’t even need to discuss the supply and demand situation as these only influence short-term price adjustments.If we look at the median property price in Melbourne and Sydney:
In the 1920s, property was priced at around 30;
In the 1960s, property was priced at around AUD$10,00;
In the 2010s, property was priced at around AUD$600,000.You know that the median priced properties are not better than those from 90 years ago when you compare their land size, location and quality of the building. But the price tag just keeps going up and up with no end in sight. This is the power of money supply increase. If you look at a graph of Australian Money Supply vs Property Prices you will see how Australia has been increasing its Money Supply at around 9% a year compounding non-stop, and how it “coincidentally” aligns with the property prices increase over the same period.)The wealth of a nation.Have you ever noticed that regardless of which particular industry caused a nation to prosper at any given time, the wealth of that nation always ends up sitting in its residential properties? It has been estimated that around 70% of an industrial nation’s wealth exists within its residential properties. You can test this yourself, by looking around at 10 of your friends to see where their wealth is. You will quickly discover that the majority of their wealth is in their home, regardless of what line of work they do. In other words, every 20-30 years you will see new industries come and go, in cycles of boom and bust, but the wealth left behind those industries tends to stay in residential properties. Let’s take a look at some of the nations over the past 100 years. Each has had some incredible industries at different times that have tremendously increased the wealth of those nations. For example:
The automobile industry, steel industry and IT industry each brought America enormous wealth during their individual eras. But where has most of the wealth ended up? In their residential properties.
The manufacturing industry of China, the oil industries of Dubai and Saudi Arabia and the electronics industry of Japan, all these industries have come and gone, but the wealth they created remains behind in their residential properties.In 2006, I had the chance to work with a multi-billion dollar international hedge fund to finance a AUD$1.5billion residential property development project. The managing director of this fund happened to be the head of the Asian Pacific division of one of world’s largest investment banks. His rationale for investing around AUD$200Million into this residential development project is too simple to believe, at least for people who don’t handle multi-billion dollars every day. On the trip to make his final decision to invest into the project, he said to me that it is always safe to invest, not speculate, in residential properties in a country which is becoming wealthier, regardless of which industry was predominantly responsible for creating that wealth. The reason is that the majority of the extra wealth is always going to end up sitting in residential properties anyway, with no exceptions. It’s just a matter of time. So the question to ask yourself is, will Australia become wealthier or poorer over the next 10-20 years? With the decline of the US and European economies, we are now firmly in the “Asian Century” as our Prime Minister recently put it. Australia is unusually well positioned to benefit from the growth of Asia, which represents 50% of the world’s population. Let’s look at what Australia has in terms of resources:
The world’s largest resources of brown coal, lead, nickel, uranium, zinc and silver;
The world’s 2nd largest resources of iron ore, bauxite, copper and gold;
The world’s 3rd largest resource of industrial diamonds and lithium;
The world’s 4th largest resource of manganese ore;
The world’s 5th largest resource of black coal.(Source: Geoscience Australia)Australia is by far the world’s richest country in natural resources per person with an unstoppable demand coming from 50% of the world’s population over the next 20 years alone. According to investment firm Credit Suisse the median wealth of Australians is the highest in the world already, its Global Wealth Report shows the typical Australian adult is worth nearly four times the amount of an American. In fact the research reveals that half of all adults in Australia have a net worth above $216,000. Unfortunately most people living in Australia do not see that. Like the saying that “fish discover water last” we can’t see what we are in because we are surrounded by it. Let me give everyone a different perspective so you can see the impact on Australian property prices. I came to Australia from China in 1988. At that time there were almost 1 billion farmers in China and it wasn’t doing very much business with Australia. Now it is 2011 and China has 102 cities with an urban population of 5 million people or more. While Australia has none (Sydney has only 4.5 million people). China has become heavily dependent on Australia’s resources. China’s massive urbanisation process, which is continuing to move an incredible 400 million people into cities, is creating the demand for an extraordinary amount of resources such as steel and coal just to house all these people. If you have difficulty visualising what all this means to Australia’s wealth, imagine moving Australia’s entire population of 20 million people into a nearby fairly undeveloped country, say Papua New Guinea. Just to enable all these people to live a decent lifestyle would require building millions of new properties and supplying energy to these 20 million newly arrived residents. Then imagine doing the whole process 20 times over within the next few decades. If you happened to own a business that had the mandate to rebuild the entire Australian nation from scratch 20 times over within a couple of decades, and your business has been selected as the largest supplier of resources needed for the task, how do you think this business would do financially? Some people worried about the Chinese economy slowing down could hurt Australia, but really if they slows down by 10% (i.e. a serious recession), instead of building Australia 20 times over, they are now only doing it 18 times, what difference does it make? Australia still couldn’t keep up with that demand anyway. The above Chinese scenario doesn’t include the demand coming from other heavily populated countries such as India, Indonesia and Japan. For example, India is currently in the process of building over 300 shopping centres the size of Australia’s largest shopping centre – Chadstone Shopping Centre, it so heavily relies on Australia’s resources too. Recently BHP Billiton has predicted Australia’s resources industry will need an extra 170,000 workers in the next five years alone, not to mention jobs needed to be created in other industries to keep these workers functioning. Australia is not called the Lucky Country for no reason.Cutting through the noise.Many Australian property investors have been distracted recently by the events in US and Europe. Amidst all this noise, many have forgotten the fact that Australia was one of the few developed countries that didn’t go into a recession during the global financial crisis, and still retains the highest credit rating for its government and major banks. Let’s look at some facts to compare Australia to the rest of the world. When you look at the US Government’s budget for this year you can understand why their credit rating was recently downgraded:
U.S. Tax revenue: $2,170,000,000,000
Federal Budget: $3,820,000,000,000
New debt: $ 1,650,000,000,000
National debt: $14,271,000,000,000
Recent budget cut: $ 38,500,000,000(Source US government budget papers)To make their situation easier to understand, let’s remove 8 zeros and pretend it’s a household budget:
Annual family income: $21,700
Money the family spent: $38,200
New debt on the credit card: $16,500
Outstanding balance on the credit card: $142,710
Total budget cuts: $385Now let’s compare that to the Australian economy:
Annual family income: $29,840
Money the family spent: $34,610
New debt on the credit card: $4,770
Outstanding balance on the credit card: $8,460
Total budget cuts: $2,200(Source: budget.gov.au )Many people believe that the decline of US property prices over recent years was due to the global financial crisis. I see them more as symptoms rather than the cause, as residential property prices over the longer term tend to reflect the wealth of a nation. The underlying cause of the US property price decline is that they are becoming poorer as a nation due to their heavy indebtedness which was mainly caused by a long period of over-consumption, a lack of highly competitive industries in recent times, and a few very expensive wars. People ask me why Australia’s property prices didn’t drop like US after the global financial crisis, here is my view on this:
On the surface, it looks like our banking system is more prudent to avoid properties being over supplied, as Australian banks won’t lend you money to develop new properties until you have pre-sold most of them, whereas you can get finance to build 200 new homes in US without knowing who is going to buy them.
Below the surface, it is mainly because Australia is getting wealthier as a nation, and US (and many European countries) are getting poorer due to their heavy indebtedness; To make matter worse, US (and many European countries) are in denial of such situation and trying to use more debt to solve their debt problems. Do you think using more cocaine is the solution for a cocaine addict?So it is important for property investors to see the new trend where Australia has now permanently departed from the general decline of wealth in the rest of the developed world, and the performance of property in other developed countries bears very little relevance to Australian property performance.In SummaryI believe Australian residential properties are on the verge of a major bull run over the next 20 years, because of 3 major reasons:
The Australian dollar, as a relatively small currency in size, is at the mercy of the rest of the world’s money supply, and the rest of the world has been on a money supply increase path for the last 100 years. With no mechanism to stop printing more money around the world, Australia’s money supply will have to continually increase, hence the price tag on everything will continue to go up, including residential properties;
Australia will continue to grow wealthier over the next few decades and property prices will rise to match the wealth created through this process;
Australia is now aligned with the Asian region which is where the majority of growth will continue to come from and so the negative impacts of US and Europe will soon become less and less relevant.Here is my prediction: the next 20 years will be a golden era for Australian residential property investors, regardless of what will happen in the short-term. I recommend all our clients to follow good money management principles and put more money into residential properties as early as it is safe for them to do so within their own circumstances. At a practical level, Australian property investors need to take into consideration the impact on property prices from the baby-boomers’ impending retirement and follow the banks’ lead to park your money where the next income generating group will be residing.

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There is an excessive amount of traffic coming from your Region.

#EANF#

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There is an excessive amount of traffic coming from your Region.

#EANF#

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Australian Residential Property Market – What Lies Ahead for Investors?

By the end of this article, you will discover I have made a prediction which is the exact opposite of what most people believe. You’ll also discover why I am happy to put my prediction in writing so that you can verify my claim in the future. Let’s check out what determines property price movements. From my observations:
Short-term property price movements (within 1-3 years) are usually determined by human emotion (also known as human insanity).
Medium to long-term price movements (3-10 years or more) are more likely to be beyond human insanity, hence they are more predictable and controllable.Can we really predict human insanity? Some of the most intelligent people have been put to the test and still failed miserably. Economists have the unfortunate job of predicting human insanity, hence they earn the reputation of “having successfully predicted 9 out of the last 5 recessions”. What is the difference between human intelligence and human insanity? There is a limit to human intelligence. So what does determine property price movements over the medium to long-term? In my opinion, amongst many other things, property prices are predominantly determined by two factors:
The money supply of a nation
The wealth of a nation.The money supply of a nation.Let me explain. The money supply of a nation. Let’s take an extreme example to create a simple demonstration.
Let’s say on this little island country called Australia, a few thousand years ago, there were only 10 houses (probably called sheds back then), and there was no money being used at that time.
The island chief decides to issue some money called Australian Dollars for circulation. For the sake of simplicity, he decides that the money issued can only be used to buy properties and nothing else.
The island initially issues only $10, so each house is therefore priced at $1 each. (Amount of money available divided by number of houses.)
A year later, the island decides to increase the money supply to a total of $100 still with the same usage restrictions (can only be used to buy houses). Without any improvement to the properties, each house is now priced at $10 each. ($100 divided by 10 houses, equals $10 each.)Now you can see how property prices can go up just by increasing the money supply of a nation. We don’t even need to discuss the supply and demand situation as these only influence short-term price adjustments.If we look at the median property price in Melbourne and Sydney:
In the 1920s, property was priced at around 30;
In the 1960s, property was priced at around AUD$10,00;
In the 2010s, property was priced at around AUD$600,000.You know that the median priced properties are not better than those from 90 years ago when you compare their land size, location and quality of the building. But the price tag just keeps going up and up with no end in sight. This is the power of money supply increase. If you look at a graph of Australian Money Supply vs Property Prices you will see how Australia has been increasing its Money Supply at around 9% a year compounding non-stop, and how it “coincidentally” aligns with the property prices increase over the same period.)The wealth of a nation.Have you ever noticed that regardless of which particular industry caused a nation to prosper at any given time, the wealth of that nation always ends up sitting in its residential properties? It has been estimated that around 70% of an industrial nation’s wealth exists within its residential properties. You can test this yourself, by looking around at 10 of your friends to see where their wealth is. You will quickly discover that the majority of their wealth is in their home, regardless of what line of work they do. In other words, every 20-30 years you will see new industries come and go, in cycles of boom and bust, but the wealth left behind those industries tends to stay in residential properties. Let’s take a look at some of the nations over the past 100 years. Each has had some incredible industries at different times that have tremendously increased the wealth of those nations. For example:
The automobile industry, steel industry and IT industry each brought America enormous wealth during their individual eras. But where has most of the wealth ended up? In their residential properties.
The manufacturing industry of China, the oil industries of Dubai and Saudi Arabia and the electronics industry of Japan, all these industries have come and gone, but the wealth they created remains behind in their residential properties.In 2006, I had the chance to work with a multi-billion dollar international hedge fund to finance a AUD$1.5billion residential property development project. The managing director of this fund happened to be the head of the Asian Pacific division of one of world’s largest investment banks. His rationale for investing around AUD$200Million into this residential development project is too simple to believe, at least for people who don’t handle multi-billion dollars every day. On the trip to make his final decision to invest into the project, he said to me that it is always safe to invest, not speculate, in residential properties in a country which is becoming wealthier, regardless of which industry was predominantly responsible for creating that wealth. The reason is that the majority of the extra wealth is always going to end up sitting in residential properties anyway, with no exceptions. It’s just a matter of time. So the question to ask yourself is, will Australia become wealthier or poorer over the next 10-20 years? With the decline of the US and European economies, we are now firmly in the “Asian Century” as our Prime Minister recently put it. Australia is unusually well positioned to benefit from the growth of Asia, which represents 50% of the world’s population. Let’s look at what Australia has in terms of resources:
The world’s largest resources of brown coal, lead, nickel, uranium, zinc and silver;
The world’s 2nd largest resources of iron ore, bauxite, copper and gold;
The world’s 3rd largest resource of industrial diamonds and lithium;
The world’s 4th largest resource of manganese ore;
The world’s 5th largest resource of black coal.(Source: Geoscience Australia)Australia is by far the world’s richest country in natural resources per person with an unstoppable demand coming from 50% of the world’s population over the next 20 years alone. According to investment firm Credit Suisse the median wealth of Australians is the highest in the world already, its Global Wealth Report shows the typical Australian adult is worth nearly four times the amount of an American. In fact the research reveals that half of all adults in Australia have a net worth above $216,000. Unfortunately most people living in Australia do not see that. Like the saying that “fish discover water last” we can’t see what we are in because we are surrounded by it. Let me give everyone a different perspective so you can see the impact on Australian property prices. I came to Australia from China in 1988. At that time there were almost 1 billion farmers in China and it wasn’t doing very much business with Australia. Now it is 2011 and China has 102 cities with an urban population of 5 million people or more. While Australia has none (Sydney has only 4.5 million people). China has become heavily dependent on Australia’s resources. China’s massive urbanisation process, which is continuing to move an incredible 400 million people into cities, is creating the demand for an extraordinary amount of resources such as steel and coal just to house all these people. If you have difficulty visualising what all this means to Australia’s wealth, imagine moving Australia’s entire population of 20 million people into a nearby fairly undeveloped country, say Papua New Guinea. Just to enable all these people to live a decent lifestyle would require building millions of new properties and supplying energy to these 20 million newly arrived residents. Then imagine doing the whole process 20 times over within the next few decades. If you happened to own a business that had the mandate to rebuild the entire Australian nation from scratch 20 times over within a couple of decades, and your business has been selected as the largest supplier of resources needed for the task, how do you think this business would do financially? Some people worried about the Chinese economy slowing down could hurt Australia, but really if they slows down by 10% (i.e. a serious recession), instead of building Australia 20 times over, they are now only doing it 18 times, what difference does it make? Australia still couldn’t keep up with that demand anyway. The above Chinese scenario doesn’t include the demand coming from other heavily populated countries such as India, Indonesia and Japan. For example, India is currently in the process of building over 300 shopping centres the size of Australia’s largest shopping centre – Chadstone Shopping Centre, it so heavily relies on Australia’s resources too. Recently BHP Billiton has predicted Australia’s resources industry will need an extra 170,000 workers in the next five years alone, not to mention jobs needed to be created in other industries to keep these workers functioning. Australia is not called the Lucky Country for no reason.Cutting through the noise.Many Australian property investors have been distracted recently by the events in US and Europe. Amidst all this noise, many have forgotten the fact that Australia was one of the few developed countries that didn’t go into a recession during the global financial crisis, and still retains the highest credit rating for its government and major banks. Let’s look at some facts to compare Australia to the rest of the world. When you look at the US Government’s budget for this year you can understand why their credit rating was recently downgraded:
U.S. Tax revenue: $2,170,000,000,000
Federal Budget: $3,820,000,000,000
New debt: $ 1,650,000,000,000
National debt: $14,271,000,000,000
Recent budget cut: $ 38,500,000,000(Source US government budget papers)To make their situation easier to understand, let’s remove 8 zeros and pretend it’s a household budget:
Annual family income: $21,700
Money the family spent: $38,200
New debt on the credit card: $16,500
Outstanding balance on the credit card: $142,710
Total budget cuts: $385Now let’s compare that to the Australian economy:
Annual family income: $29,840
Money the family spent: $34,610
New debt on the credit card: $4,770
Outstanding balance on the credit card: $8,460
Total budget cuts: $2,200(Source: budget.gov.au )Many people believe that the decline of US property prices over recent years was due to the global financial crisis. I see them more as symptoms rather than the cause, as residential property prices over the longer term tend to reflect the wealth of a nation. The underlying cause of the US property price decline is that they are becoming poorer as a nation due to their heavy indebtedness which was mainly caused by a long period of over-consumption, a lack of highly competitive industries in recent times, and a few very expensive wars. People ask me why Australia’s property prices didn’t drop like US after the global financial crisis, here is my view on this:
On the surface, it looks like our banking system is more prudent to avoid properties being over supplied, as Australian banks won’t lend you money to develop new properties until you have pre-sold most of them, whereas you can get finance to build 200 new homes in US without knowing who is going to buy them.
Below the surface, it is mainly because Australia is getting wealthier as a nation, and US (and many European countries) are getting poorer due to their heavy indebtedness; To make matter worse, US (and many European countries) are in denial of such situation and trying to use more debt to solve their debt problems. Do you think using more cocaine is the solution for a cocaine addict?So it is important for property investors to see the new trend where Australia has now permanently departed from the general decline of wealth in the rest of the developed world, and the performance of property in other developed countries bears very little relevance to Australian property performance.In SummaryI believe Australian residential properties are on the verge of a major bull run over the next 20 years, because of 3 major reasons:
The Australian dollar, as a relatively small currency in size, is at the mercy of the rest of the world’s money supply, and the rest of the world has been on a money supply increase path for the last 100 years. With no mechanism to stop printing more money around the world, Australia’s money supply will have to continually increase, hence the price tag on everything will continue to go up, including residential properties;
Australia will continue to grow wealthier over the next few decades and property prices will rise to match the wealth created through this process;
Australia is now aligned with the Asian region which is where the majority of growth will continue to come from and so the negative impacts of US and Europe will soon become less and less relevant.Here is my prediction: the next 20 years will be a golden era for Australian residential property investors, regardless of what will happen in the short-term. I recommend all our clients to follow good money management principles and put more money into residential properties as early as it is safe for them to do so within their own circumstances. At a practical level, Australian property investors need to take into consideration the impact on property prices from the baby-boomers’ impending retirement and follow the banks’ lead to park your money where the next income generating group will be residing.

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Australian Residential Property Market – What Lies Ahead for Investors?

By the end of this article, you will discover I have made a prediction which is the exact opposite of what most people believe. You’ll also discover why I am happy to put my prediction in writing so that you can verify my claim in the future. Let’s check out what determines property price movements. From my observations:
Short-term property price movements (within 1-3 years) are usually determined by human emotion (also known as human insanity).
Medium to long-term price movements (3-10 years or more) are more likely to be beyond human insanity, hence they are more predictable and controllable.Can we really predict human insanity? Some of the most intelligent people have been put to the test and still failed miserably. Economists have the unfortunate job of predicting human insanity, hence they earn the reputation of “having successfully predicted 9 out of the last 5 recessions”. What is the difference between human intelligence and human insanity? There is a limit to human intelligence. So what does determine property price movements over the medium to long-term? In my opinion, amongst many other things, property prices are predominantly determined by two factors:
The money supply of a nation
The wealth of a nation.The money supply of a nation.Let me explain. The money supply of a nation. Let’s take an extreme example to create a simple demonstration.
Let’s say on this little island country called Australia, a few thousand years ago, there were only 10 houses (probably called sheds back then), and there was no money being used at that time.
The island chief decides to issue some money called Australian Dollars for circulation. For the sake of simplicity, he decides that the money issued can only be used to buy properties and nothing else.
The island initially issues only $10, so each house is therefore priced at $1 each. (Amount of money available divided by number of houses.)
A year later, the island decides to increase the money supply to a total of $100 still with the same usage restrictions (can only be used to buy houses). Without any improvement to the properties, each house is now priced at $10 each. ($100 divided by 10 houses, equals $10 each.)Now you can see how property prices can go up just by increasing the money supply of a nation. We don’t even need to discuss the supply and demand situation as these only influence short-term price adjustments.If we look at the median property price in Melbourne and Sydney:
In the 1920s, property was priced at around 30;
In the 1960s, property was priced at around AUD$10,00;
In the 2010s, property was priced at around AUD$600,000.You know that the median priced properties are not better than those from 90 years ago when you compare their land size, location and quality of the building. But the price tag just keeps going up and up with no end in sight. This is the power of money supply increase. If you look at a graph of Australian Money Supply vs Property Prices you will see how Australia has been increasing its Money Supply at around 9% a year compounding non-stop, and how it “coincidentally” aligns with the property prices increase over the same period.)The wealth of a nation.Have you ever noticed that regardless of which particular industry caused a nation to prosper at any given time, the wealth of that nation always ends up sitting in its residential properties? It has been estimated that around 70% of an industrial nation’s wealth exists within its residential properties. You can test this yourself, by looking around at 10 of your friends to see where their wealth is. You will quickly discover that the majority of their wealth is in their home, regardless of what line of work they do. In other words, every 20-30 years you will see new industries come and go, in cycles of boom and bust, but the wealth left behind those industries tends to stay in residential properties. Let’s take a look at some of the nations over the past 100 years. Each has had some incredible industries at different times that have tremendously increased the wealth of those nations. For example:
The automobile industry, steel industry and IT industry each brought America enormous wealth during their individual eras. But where has most of the wealth ended up? In their residential properties.
The manufacturing industry of China, the oil industries of Dubai and Saudi Arabia and the electronics industry of Japan, all these industries have come and gone, but the wealth they created remains behind in their residential properties.In 2006, I had the chance to work with a multi-billion dollar international hedge fund to finance a AUD$1.5billion residential property development project. The managing director of this fund happened to be the head of the Asian Pacific division of one of world’s largest investment banks. His rationale for investing around AUD$200Million into this residential development project is too simple to believe, at least for people who don’t handle multi-billion dollars every day. On the trip to make his final decision to invest into the project, he said to me that it is always safe to invest, not speculate, in residential properties in a country which is becoming wealthier, regardless of which industry was predominantly responsible for creating that wealth. The reason is that the majority of the extra wealth is always going to end up sitting in residential properties anyway, with no exceptions. It’s just a matter of time. So the question to ask yourself is, will Australia become wealthier or poorer over the next 10-20 years? With the decline of the US and European economies, we are now firmly in the “Asian Century” as our Prime Minister recently put it. Australia is unusually well positioned to benefit from the growth of Asia, which represents 50% of the world’s population. Let’s look at what Australia has in terms of resources:
The world’s largest resources of brown coal, lead, nickel, uranium, zinc and silver;
The world’s 2nd largest resources of iron ore, bauxite, copper and gold;
The world’s 3rd largest resource of industrial diamonds and lithium;
The world’s 4th largest resource of manganese ore;
The world’s 5th largest resource of black coal.(Source: Geoscience Australia)Australia is by far the world’s richest country in natural resources per person with an unstoppable demand coming from 50% of the world’s population over the next 20 years alone. According to investment firm Credit Suisse the median wealth of Australians is the highest in the world already, its Global Wealth Report shows the typical Australian adult is worth nearly four times the amount of an American. In fact the research reveals that half of all adults in Australia have a net worth above $216,000. Unfortunately most people living in Australia do not see that. Like the saying that “fish discover water last” we can’t see what we are in because we are surrounded by it. Let me give everyone a different perspective so you can see the impact on Australian property prices. I came to Australia from China in 1988. At that time there were almost 1 billion farmers in China and it wasn’t doing very much business with Australia. Now it is 2011 and China has 102 cities with an urban population of 5 million people or more. While Australia has none (Sydney has only 4.5 million people). China has become heavily dependent on Australia’s resources. China’s massive urbanisation process, which is continuing to move an incredible 400 million people into cities, is creating the demand for an extraordinary amount of resources such as steel and coal just to house all these people. If you have difficulty visualising what all this means to Australia’s wealth, imagine moving Australia’s entire population of 20 million people into a nearby fairly undeveloped country, say Papua New Guinea. Just to enable all these people to live a decent lifestyle would require building millions of new properties and supplying energy to these 20 million newly arrived residents. Then imagine doing the whole process 20 times over within the next few decades. If you happened to own a business that had the mandate to rebuild the entire Australian nation from scratch 20 times over within a couple of decades, and your business has been selected as the largest supplier of resources needed for the task, how do you think this business would do financially? Some people worried about the Chinese economy slowing down could hurt Australia, but really if they slows down by 10% (i.e. a serious recession), instead of building Australia 20 times over, they are now only doing it 18 times, what difference does it make? Australia still couldn’t keep up with that demand anyway. The above Chinese scenario doesn’t include the demand coming from other heavily populated countries such as India, Indonesia and Japan. For example, India is currently in the process of building over 300 shopping centres the size of Australia’s largest shopping centre – Chadstone Shopping Centre, it so heavily relies on Australia’s resources too. Recently BHP Billiton has predicted Australia’s resources industry will need an extra 170,000 workers in the next five years alone, not to mention jobs needed to be created in other industries to keep these workers functioning. Australia is not called the Lucky Country for no reason.Cutting through the noise.Many Australian property investors have been distracted recently by the events in US and Europe. Amidst all this noise, many have forgotten the fact that Australia was one of the few developed countries that didn’t go into a recession during the global financial crisis, and still retains the highest credit rating for its government and major banks. Let’s look at some facts to compare Australia to the rest of the world. When you look at the US Government’s budget for this year you can understand why their credit rating was recently downgraded:
U.S. Tax revenue: $2,170,000,000,000
Federal Budget: $3,820,000,000,000
New debt: $ 1,650,000,000,000
National debt: $14,271,000,000,000
Recent budget cut: $ 38,500,000,000(Source US government budget papers)To make their situation easier to understand, let’s remove 8 zeros and pretend it’s a household budget:
Annual family income: $21,700
Money the family spent: $38,200
New debt on the credit card: $16,500
Outstanding balance on the credit card: $142,710
Total budget cuts: $385Now let’s compare that to the Australian economy:
Annual family income: $29,840
Money the family spent: $34,610
New debt on the credit card: $4,770
Outstanding balance on the credit card: $8,460
Total budget cuts: $2,200(Source: budget.gov.au )Many people believe that the decline of US property prices over recent years was due to the global financial crisis. I see them more as symptoms rather than the cause, as residential property prices over the longer term tend to reflect the wealth of a nation. The underlying cause of the US property price decline is that they are becoming poorer as a nation due to their heavy indebtedness which was mainly caused by a long period of over-consumption, a lack of highly competitive industries in recent times, and a few very expensive wars. People ask me why Australia’s property prices didn’t drop like US after the global financial crisis, here is my view on this:
On the surface, it looks like our banking system is more prudent to avoid properties being over supplied, as Australian banks won’t lend you money to develop new properties until you have pre-sold most of them, whereas you can get finance to build 200 new homes in US without knowing who is going to buy them.
Below the surface, it is mainly because Australia is getting wealthier as a nation, and US (and many European countries) are getting poorer due to their heavy indebtedness; To make matter worse, US (and many European countries) are in denial of such situation and trying to use more debt to solve their debt problems. Do you think using more cocaine is the solution for a cocaine addict?So it is important for property investors to see the new trend where Australia has now permanently departed from the general decline of wealth in the rest of the developed world, and the performance of property in other developed countries bears very little relevance to Australian property performance.In SummaryI believe Australian residential properties are on the verge of a major bull run over the next 20 years, because of 3 major reasons:
The Australian dollar, as a relatively small currency in size, is at the mercy of the rest of the world’s money supply, and the rest of the world has been on a money supply increase path for the last 100 years. With no mechanism to stop printing more money around the world, Australia’s money supply will have to continually increase, hence the price tag on everything will continue to go up, including residential properties;
Australia will continue to grow wealthier over the next few decades and property prices will rise to match the wealth created through this process;
Australia is now aligned with the Asian region which is where the majority of growth will continue to come from and so the negative impacts of US and Europe will soon become less and less relevant.Here is my prediction: the next 20 years will be a golden era for Australian residential property investors, regardless of what will happen in the short-term. I recommend all our clients to follow good money management principles and put more money into residential properties as early as it is safe for them to do so within their own circumstances. At a practical level, Australian property investors need to take into consideration the impact on property prices from the baby-boomers’ impending retirement and follow the banks’ lead to park your money where the next income generating group will be residing.

Posted in Uncategorized | Comments Off

Australian Residential Property Market – What Lies Ahead for Investors?

By the end of this article, you will discover I have made a prediction which is the exact opposite of what most people believe. You’ll also discover why I am happy to put my prediction in writing so that you can verify my claim in the future. Let’s check out what determines property price movements. From my observations:
Short-term property price movements (within 1-3 years) are usually determined by human emotion (also known as human insanity).
Medium to long-term price movements (3-10 years or more) are more likely to be beyond human insanity, hence they are more predictable and controllable.Can we really predict human insanity? Some of the most intelligent people have been put to the test and still failed miserably. Economists have the unfortunate job of predicting human insanity, hence they earn the reputation of “having successfully predicted 9 out of the last 5 recessions”. What is the difference between human intelligence and human insanity? There is a limit to human intelligence. So what does determine property price movements over the medium to long-term? In my opinion, amongst many other things, property prices are predominantly determined by two factors:
The money supply of a nation
The wealth of a nation.The money supply of a nation.Let me explain. The money supply of a nation. Let’s take an extreme example to create a simple demonstration.
Let’s say on this little island country called Australia, a few thousand years ago, there were only 10 houses (probably called sheds back then), and there was no money being used at that time.
The island chief decides to issue some money called Australian Dollars for circulation. For the sake of simplicity, he decides that the money issued can only be used to buy properties and nothing else.
The island initially issues only $10, so each house is therefore priced at $1 each. (Amount of money available divided by number of houses.)
A year later, the island decides to increase the money supply to a total of $100 still with the same usage restrictions (can only be used to buy houses). Without any improvement to the properties, each house is now priced at $10 each. ($100 divided by 10 houses, equals $10 each.)Now you can see how property prices can go up just by increasing the money supply of a nation. We don’t even need to discuss the supply and demand situation as these only influence short-term price adjustments.If we look at the median property price in Melbourne and Sydney:
In the 1920s, property was priced at around 30;
In the 1960s, property was priced at around AUD$10,00;
In the 2010s, property was priced at around AUD$600,000.You know that the median priced properties are not better than those from 90 years ago when you compare their land size, location and quality of the building. But the price tag just keeps going up and up with no end in sight. This is the power of money supply increase. If you look at a graph of Australian Money Supply vs Property Prices you will see how Australia has been increasing its Money Supply at around 9% a year compounding non-stop, and how it “coincidentally” aligns with the property prices increase over the same period.)The wealth of a nation.Have you ever noticed that regardless of which particular industry caused a nation to prosper at any given time, the wealth of that nation always ends up sitting in its residential properties? It has been estimated that around 70% of an industrial nation’s wealth exists within its residential properties. You can test this yourself, by looking around at 10 of your friends to see where their wealth is. You will quickly discover that the majority of their wealth is in their home, regardless of what line of work they do. In other words, every 20-30 years you will see new industries come and go, in cycles of boom and bust, but the wealth left behind those industries tends to stay in residential properties. Let’s take a look at some of the nations over the past 100 years. Each has had some incredible industries at different times that have tremendously increased the wealth of those nations. For example:
The automobile industry, steel industry and IT industry each brought America enormous wealth during their individual eras. But where has most of the wealth ended up? In their residential properties.
The manufacturing industry of China, the oil industries of Dubai and Saudi Arabia and the electronics industry of Japan, all these industries have come and gone, but the wealth they created remains behind in their residential properties.In 2006, I had the chance to work with a multi-billion dollar international hedge fund to finance a AUD$1.5billion residential property development project. The managing director of this fund happened to be the head of the Asian Pacific division of one of world’s largest investment banks. His rationale for investing around AUD$200Million into this residential development project is too simple to believe, at least for people who don’t handle multi-billion dollars every day. On the trip to make his final decision to invest into the project, he said to me that it is always safe to invest, not speculate, in residential properties in a country which is becoming wealthier, regardless of which industry was predominantly responsible for creating that wealth. The reason is that the majority of the extra wealth is always going to end up sitting in residential properties anyway, with no exceptions. It’s just a matter of time. So the question to ask yourself is, will Australia become wealthier or poorer over the next 10-20 years? With the decline of the US and European economies, we are now firmly in the “Asian Century” as our Prime Minister recently put it. Australia is unusually well positioned to benefit from the growth of Asia, which represents 50% of the world’s population. Let’s look at what Australia has in terms of resources:
The world’s largest resources of brown coal, lead, nickel, uranium, zinc and silver;
The world’s 2nd largest resources of iron ore, bauxite, copper and gold;
The world’s 3rd largest resource of industrial diamonds and lithium;
The world’s 4th largest resource of manganese ore;
The world’s 5th largest resource of black coal.(Source: Geoscience Australia)Australia is by far the world’s richest country in natural resources per person with an unstoppable demand coming from 50% of the world’s population over the next 20 years alone. According to investment firm Credit Suisse the median wealth of Australians is the highest in the world already, its Global Wealth Report shows the typical Australian adult is worth nearly four times the amount of an American. In fact the research reveals that half of all adults in Australia have a net worth above $216,000. Unfortunately most people living in Australia do not see that. Like the saying that “fish discover water last” we can’t see what we are in because we are surrounded by it. Let me give everyone a different perspective so you can see the impact on Australian property prices. I came to Australia from China in 1988. At that time there were almost 1 billion farmers in China and it wasn’t doing very much business with Australia. Now it is 2011 and China has 102 cities with an urban population of 5 million people or more. While Australia has none (Sydney has only 4.5 million people). China has become heavily dependent on Australia’s resources. China’s massive urbanisation process, which is continuing to move an incredible 400 million people into cities, is creating the demand for an extraordinary amount of resources such as steel and coal just to house all these people. If you have difficulty visualising what all this means to Australia’s wealth, imagine moving Australia’s entire population of 20 million people into a nearby fairly undeveloped country, say Papua New Guinea. Just to enable all these people to live a decent lifestyle would require building millions of new properties and supplying energy to these 20 million newly arrived residents. Then imagine doing the whole process 20 times over within the next few decades. If you happened to own a business that had the mandate to rebuild the entire Australian nation from scratch 20 times over within a couple of decades, and your business has been selected as the largest supplier of resources needed for the task, how do you think this business would do financially? Some people worried about the Chinese economy slowing down could hurt Australia, but really if they slows down by 10% (i.e. a serious recession), instead of building Australia 20 times over, they are now only doing it 18 times, what difference does it make? Australia still couldn’t keep up with that demand anyway. The above Chinese scenario doesn’t include the demand coming from other heavily populated countries such as India, Indonesia and Japan. For example, India is currently in the process of building over 300 shopping centres the size of Australia’s largest shopping centre – Chadstone Shopping Centre, it so heavily relies on Australia’s resources too. Recently BHP Billiton has predicted Australia’s resources industry will need an extra 170,000 workers in the next five years alone, not to mention jobs needed to be created in other industries to keep these workers functioning. Australia is not called the Lucky Country for no reason.Cutting through the noise.Many Australian property investors have been distracted recently by the events in US and Europe. Amidst all this noise, many have forgotten the fact that Australia was one of the few developed countries that didn’t go into a recession during the global financial crisis, and still retains the highest credit rating for its government and major banks. Let’s look at some facts to compare Australia to the rest of the world. When you look at the US Government’s budget for this year you can understand why their credit rating was recently downgraded:
U.S. Tax revenue: $2,170,000,000,000
Federal Budget: $3,820,000,000,000
New debt: $ 1,650,000,000,000
National debt: $14,271,000,000,000
Recent budget cut: $ 38,500,000,000(Source US government budget papers)To make their situation easier to understand, let’s remove 8 zeros and pretend it’s a household budget:
Annual family income: $21,700
Money the family spent: $38,200
New debt on the credit card: $16,500
Outstanding balance on the credit card: $142,710
Total budget cuts: $385Now let’s compare that to the Australian economy:
Annual family income: $29,840
Money the family spent: $34,610
New debt on the credit card: $4,770
Outstanding balance on the credit card: $8,460
Total budget cuts: $2,200(Source: budget.gov.au )Many people believe that the decline of US property prices over recent years was due to the global financial crisis. I see them more as symptoms rather than the cause, as residential property prices over the longer term tend to reflect the wealth of a nation. The underlying cause of the US property price decline is that they are becoming poorer as a nation due to their heavy indebtedness which was mainly caused by a long period of over-consumption, a lack of highly competitive industries in recent times, and a few very expensive wars. People ask me why Australia’s property prices didn’t drop like US after the global financial crisis, here is my view on this:
On the surface, it looks like our banking system is more prudent to avoid properties being over supplied, as Australian banks won’t lend you money to develop new properties until you have pre-sold most of them, whereas you can get finance to build 200 new homes in US without knowing who is going to buy them.
Below the surface, it is mainly because Australia is getting wealthier as a nation, and US (and many European countries) are getting poorer due to their heavy indebtedness; To make matter worse, US (and many European countries) are in denial of such situation and trying to use more debt to solve their debt problems. Do you think using more cocaine is the solution for a cocaine addict?So it is important for property investors to see the new trend where Australia has now permanently departed from the general decline of wealth in the rest of the developed world, and the performance of property in other developed countries bears very little relevance to Australian property performance.In SummaryI believe Australian residential properties are on the verge of a major bull run over the next 20 years, because of 3 major reasons:
The Australian dollar, as a relatively small currency in size, is at the mercy of the rest of the world’s money supply, and the rest of the world has been on a money supply increase path for the last 100 years. With no mechanism to stop printing more money around the world, Australia’s money supply will have to continually increase, hence the price tag on everything will continue to go up, including residential properties;
Australia will continue to grow wealthier over the next few decades and property prices will rise to match the wealth created through this process;
Australia is now aligned with the Asian region which is where the majority of growth will continue to come from and so the negative impacts of US and Europe will soon become less and less relevant.Here is my prediction: the next 20 years will be a golden era for Australian residential property investors, regardless of what will happen in the short-term. I recommend all our clients to follow good money management principles and put more money into residential properties as early as it is safe for them to do so within their own circumstances. At a practical level, Australian property investors need to take into consideration the impact on property prices from the baby-boomers’ impending retirement and follow the banks’ lead to park your money where the next income generating group will be residing.

Posted in Uncategorized | Comments Off

Australian Residential Property Market – What Lies Ahead for Investors?

By the end of this article, you will discover I have made a prediction which is the exact opposite of what most people believe. You’ll also discover why I am happy to put my prediction in writing so that you can verify my claim in the future. Let’s check out what determines property price movements. From my observations:
Short-term property price movements (within 1-3 years) are usually determined by human emotion (also known as human insanity).
Medium to long-term price movements (3-10 years or more) are more likely to be beyond human insanity, hence they are more predictable and controllable.Can we really predict human insanity? Some of the most intelligent people have been put to the test and still failed miserably. Economists have the unfortunate job of predicting human insanity, hence they earn the reputation of “having successfully predicted 9 out of the last 5 recessions”. What is the difference between human intelligence and human insanity? There is a limit to human intelligence. So what does determine property price movements over the medium to long-term? In my opinion, amongst many other things, property prices are predominantly determined by two factors:
The money supply of a nation
The wealth of a nation.The money supply of a nation.Let me explain. The money supply of a nation. Let’s take an extreme example to create a simple demonstration.
Let’s say on this little island country called Australia, a few thousand years ago, there were only 10 houses (probably called sheds back then), and there was no money being used at that time.
The island chief decides to issue some money called Australian Dollars for circulation. For the sake of simplicity, he decides that the money issued can only be used to buy properties and nothing else.
The island initially issues only $10, so each house is therefore priced at $1 each. (Amount of money available divided by number of houses.)
A year later, the island decides to increase the money supply to a total of $100 still with the same usage restrictions (can only be used to buy houses). Without any improvement to the properties, each house is now priced at $10 each. ($100 divided by 10 houses, equals $10 each.)Now you can see how property prices can go up just by increasing the money supply of a nation. We don’t even need to discuss the supply and demand situation as these only influence short-term price adjustments.If we look at the median property price in Melbourne and Sydney:
In the 1920s, property was priced at around 30;
In the 1960s, property was priced at around AUD$10,00;
In the 2010s, property was priced at around AUD$600,000.You know that the median priced properties are not better than those from 90 years ago when you compare their land size, location and quality of the building. But the price tag just keeps going up and up with no end in sight. This is the power of money supply increase. If you look at a graph of Australian Money Supply vs Property Prices you will see how Australia has been increasing its Money Supply at around 9% a year compounding non-stop, and how it “coincidentally” aligns with the property prices increase over the same period.)The wealth of a nation.Have you ever noticed that regardless of which particular industry caused a nation to prosper at any given time, the wealth of that nation always ends up sitting in its residential properties? It has been estimated that around 70% of an industrial nation’s wealth exists within its residential properties. You can test this yourself, by looking around at 10 of your friends to see where their wealth is. You will quickly discover that the majority of their wealth is in their home, regardless of what line of work they do. In other words, every 20-30 years you will see new industries come and go, in cycles of boom and bust, but the wealth left behind those industries tends to stay in residential properties. Let’s take a look at some of the nations over the past 100 years. Each has had some incredible industries at different times that have tremendously increased the wealth of those nations. For example:
The automobile industry, steel industry and IT industry each brought America enormous wealth during their individual eras. But where has most of the wealth ended up? In their residential properties.
The manufacturing industry of China, the oil industries of Dubai and Saudi Arabia and the electronics industry of Japan, all these industries have come and gone, but the wealth they created remains behind in their residential properties.In 2006, I had the chance to work with a multi-billion dollar international hedge fund to finance a AUD$1.5billion residential property development project. The managing director of this fund happened to be the head of the Asian Pacific division of one of world’s largest investment banks. His rationale for investing around AUD$200Million into this residential development project is too simple to believe, at least for people who don’t handle multi-billion dollars every day. On the trip to make his final decision to invest into the project, he said to me that it is always safe to invest, not speculate, in residential properties in a country which is becoming wealthier, regardless of which industry was predominantly responsible for creating that wealth. The reason is that the majority of the extra wealth is always going to end up sitting in residential properties anyway, with no exceptions. It’s just a matter of time. So the question to ask yourself is, will Australia become wealthier or poorer over the next 10-20 years? With the decline of the US and European economies, we are now firmly in the “Asian Century” as our Prime Minister recently put it. Australia is unusually well positioned to benefit from the growth of Asia, which represents 50% of the world’s population. Let’s look at what Australia has in terms of resources:
The world’s largest resources of brown coal, lead, nickel, uranium, zinc and silver;
The world’s 2nd largest resources of iron ore, bauxite, copper and gold;
The world’s 3rd largest resource of industrial diamonds and lithium;
The world’s 4th largest resource of manganese ore;
The world’s 5th largest resource of black coal.(Source: Geoscience Australia)Australia is by far the world’s richest country in natural resources per person with an unstoppable demand coming from 50% of the world’s population over the next 20 years alone. According to investment firm Credit Suisse the median wealth of Australians is the highest in the world already, its Global Wealth Report shows the typical Australian adult is worth nearly four times the amount of an American. In fact the research reveals that half of all adults in Australia have a net worth above $216,000. Unfortunately most people living in Australia do not see that. Like the saying that “fish discover water last” we can’t see what we are in because we are surrounded by it. Let me give everyone a different perspective so you can see the impact on Australian property prices. I came to Australia from China in 1988. At that time there were almost 1 billion farmers in China and it wasn’t doing very much business with Australia. Now it is 2011 and China has 102 cities with an urban population of 5 million people or more. While Australia has none (Sydney has only 4.5 million people). China has become heavily dependent on Australia’s resources. China’s massive urbanisation process, which is continuing to move an incredible 400 million people into cities, is creating the demand for an extraordinary amount of resources such as steel and coal just to house all these people. If you have difficulty visualising what all this means to Australia’s wealth, imagine moving Australia’s entire population of 20 million people into a nearby fairly undeveloped country, say Papua New Guinea. Just to enable all these people to live a decent lifestyle would require building millions of new properties and supplying energy to these 20 million newly arrived residents. Then imagine doing the whole process 20 times over within the next few decades. If you happened to own a business that had the mandate to rebuild the entire Australian nation from scratch 20 times over within a couple of decades, and your business has been selected as the largest supplier of resources needed for the task, how do you think this business would do financially? Some people worried about the Chinese economy slowing down could hurt Australia, but really if they slows down by 10% (i.e. a serious recession), instead of building Australia 20 times over, they are now only doing it 18 times, what difference does it make? Australia still couldn’t keep up with that demand anyway. The above Chinese scenario doesn’t include the demand coming from other heavily populated countries such as India, Indonesia and Japan. For example, India is currently in the process of building over 300 shopping centres the size of Australia’s largest shopping centre – Chadstone Shopping Centre, it so heavily relies on Australia’s resources too. Recently BHP Billiton has predicted Australia’s resources industry will need an extra 170,000 workers in the next five years alone, not to mention jobs needed to be created in other industries to keep these workers functioning. Australia is not called the Lucky Country for no reason.Cutting through the noise.Many Australian property investors have been distracted recently by the events in US and Europe. Amidst all this noise, many have forgotten the fact that Australia was one of the few developed countries that didn’t go into a recession during the global financial crisis, and still retains the highest credit rating for its government and major banks. Let’s look at some facts to compare Australia to the rest of the world. When you look at the US Government’s budget for this year you can understand why their credit rating was recently downgraded:
U.S. Tax revenue: $2,170,000,000,000
Federal Budget: $3,820,000,000,000
New debt: $ 1,650,000,000,000
National debt: $14,271,000,000,000
Recent budget cut: $ 38,500,000,000(Source US government budget papers)To make their situation easier to understand, let’s remove 8 zeros and pretend it’s a household budget:
Annual family income: $21,700
Money the family spent: $38,200
New debt on the credit card: $16,500
Outstanding balance on the credit card: $142,710
Total budget cuts: $385Now let’s compare that to the Australian economy:
Annual family income: $29,840
Money the family spent: $34,610
New debt on the credit card: $4,770
Outstanding balance on the credit card: $8,460
Total budget cuts: $2,200(Source: budget.gov.au )Many people believe that the decline of US property prices over recent years was due to the global financial crisis. I see them more as symptoms rather than the cause, as residential property prices over the longer term tend to reflect the wealth of a nation. The underlying cause of the US property price decline is that they are becoming poorer as a nation due to their heavy indebtedness which was mainly caused by a long period of over-consumption, a lack of highly competitive industries in recent times, and a few very expensive wars. People ask me why Australia’s property prices didn’t drop like US after the global financial crisis, here is my view on this:
On the surface, it looks like our banking system is more prudent to avoid properties being over supplied, as Australian banks won’t lend you money to develop new properties until you have pre-sold most of them, whereas you can get finance to build 200 new homes in US without knowing who is going to buy them.
Below the surface, it is mainly because Australia is getting wealthier as a nation, and US (and many European countries) are getting poorer due to their heavy indebtedness; To make matter worse, US (and many European countries) are in denial of such situation and trying to use more debt to solve their debt problems. Do you think using more cocaine is the solution for a cocaine addict?So it is important for property investors to see the new trend where Australia has now permanently departed from the general decline of wealth in the rest of the developed world, and the performance of property in other developed countries bears very little relevance to Australian property performance.In SummaryI believe Australian residential properties are on the verge of a major bull run over the next 20 years, because of 3 major reasons:
The Australian dollar, as a relatively small currency in size, is at the mercy of the rest of the world’s money supply, and the rest of the world has been on a money supply increase path for the last 100 years. With no mechanism to stop printing more money around the world, Australia’s money supply will have to continually increase, hence the price tag on everything will continue to go up, including residential properties;
Australia will continue to grow wealthier over the next few decades and property prices will rise to match the wealth created through this process;
Australia is now aligned with the Asian region which is where the majority of growth will continue to come from and so the negative impacts of US and Europe will soon become less and less relevant.Here is my prediction: the next 20 years will be a golden era for Australian residential property investors, regardless of what will happen in the short-term. I recommend all our clients to follow good money management principles and put more money into residential properties as early as it is safe for them to do so within their own circumstances. At a practical level, Australian property investors need to take into consideration the impact on property prices from the baby-boomers’ impending retirement and follow the banks’ lead to park your money where the next income generating group will be residing.

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Keep These 5 Rules in Mind for Successful Commercial Designing

Who doesn’t want an excellent commercial design? Excellent commercial design is important to maintain the reputation and brand image of the company. As it is said, the first impression is the last impression, a good impression always attracts potential customers. It’s obvious no one would ever love to walk in a congested environment with bad lighting.

Bad design and interiors deteriorate the productivity of the employees. It can be a confusing task when planning a commercial designing project for the first time, hiring expert Commercial Architects Melbourne can be the best option to know about the latest trends and perfect matching designs.

This blog is about some basic rules to consider for making the commercial project successful.
Keep structures versatile

When it comes to transforming any commercial space, focusing on convertibility and keeping office interior decor versatile can be the best option. It can be done by implementing a versatile structure to spaces such as cafeterias, offices, and many more. Everyone gives preference to comfort hence, focusing on spatial and versatile design will help to complete commercial designing projects in an optimal way.

Consider the latest technology implementations

Technology plays a supportive role to enhance the commercial designing project. Moving forward with the latest technology is important to execute any business smoothly because technologies make the work much easier and comfortable for the employee as well as organizations. Implementing centralized and decentralized digital control is much needed in any commercial design.

Keep office aesthetics updated

Good aesthetics and interiors impact the overall representation of the office and make the place functional and attractive. Hire a reputed designer for modern d├ęcor and furniture ideas. Hiring a designer reduces half of the project stress and helps to meet the contemporary fashion and latest trends. They can help to choose the perfect theme that blends well with the office decor, atmosphere, and colour.

Provide personalized space to prevent congestion

Majority of customer prefers personalized space such as different seating to seat comfortably and do the personal work. Personalized space is one of the crucial factors for customer-based service offices such as hotels and cafeterias to provide an ambient and comfortable place.

Always keep safety first

Safety is the central feature of every construction and designing project. Hence, it’s the high-priority factor to keep the aesthetic and functional safety at the working place. It can be compromised for interior decoration and design purposes but it’s not at all affordable to compromise for safety purposes.

Following the above useful ideas can easily help in the successful completion of a commercial designing project in a safe and pleasing way. In today’s, modern construction, reliability, and comfort is also an equally important factor.

Final words,

It’s important to hire the experienced Building designer Melbourne to make the commercial designing project worthy. Hope the above rules helped you to scale up your interior designing projects with a better outcome. Follow the above tips for any renovation or remodelling project and surely you will get award-winning and achieve a better office experience.

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How Long Should A Laptop Battery Last And How To Increase the Battery Life

No matter how expensive your laptop is, its battery won’t last more than four years. According to experts, a new laptop battery gives you as many as 1,000 cycles. In other words, you can charge and recharge the battery up to 1000 times. However, many factors play their role to increase or decrease the lifespan of a laptop battery. For instance, the material used for producing the battery substance. So, if you want to ensure that your battery stands the test of time, given below are some of the tips that can help.

1. Install a good battery monitor

If you are looking for an alternative, you can choose from tons of third-party utilities. Basically, the software programs help you monitor your laptop battery. These programs have no compatibility issues with any type of laptop.

Using these tools, you can find out which programs are using most of the battery power. You can then close the unwanted programs to save battery power.

2. Install maintenance apps

You can use some manufacturer-recommended maintenance tools for maintaining your laptop battery. Based on the type of your battery, you will receive different suggestions. Apart from this, your operating system will come with a built-in utility that can help you keep an eye on your battery condition.

3. Maintain your device temperature

You should try your level best to ensure your laptop maintains its temperature. In summer, electronic devices tend to heat up, which negatively impacts the life of the battery packs.

Therefore, you should make sure that there is a little bit of space between the bottom of the device and the table you have placed your device on. Besides, the ventilation system of your device should be working properly. For this purpose, regular cleaning of your device is quite important.

4. Don’t use maximum brightness

When your screen brightness is at maximum level, your device will use the maximum power. So, turning down the brightness is the first thing you can do to save power. Also, it is not a good idea to keep the brightness at max level as it can have a negative impact on your eyesight.

So, by following these simple tips, it will be easier for you to extend the life of your laptop battery.

5. Change the power-saving settings

Before you do anything, go into the power options of your laptop. If you are using Windows operating system, you can go to the control panel to access the power options. The control panel can be accessed from the Start Menu.

Some users have MacOS. If you are one of them, you need to access Energy Saver, which is found in the System Preferences. If these values are set to default, your computer will use the least amount of power.

So, what you need to do is make small changes to the settings so that you achieve a balance between power and performance. For best performance, there is always the choice to connect your device to the AC outlet.

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