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Reading Time:

3 minutes

Published:

09 June 2003

PROPERTY FORECASTING

Tipping Locations

Yes, I agree with your comments that it’s probably a bad time to invest, but what you have neglected to also say is that if people had taken your advice and not invested in areas like Melbourne and Sydney CBD, but invested in areas that hadn’t already boomed they may have well been doing quite well by now, and been able to ride the roller coaster that’s more than likely on its way.

You should probably admit that you got it slightly wrong and realise that trying to tip this sort of stuff is like predicting the weather which yes will turn to some extent but when and how much we don’t know.

RESPONSE

Since issuing our first warnings in late 2001, I have, many times, made reference to places that I believe are safe to invest. As those who attend my consumer seminars will know, I often mention specific locations.

In Tasmania, I told Tasmanians that their prices represented good value. I said the same in Ballarat, Albury and many regional centres across Australia. All this was well before the prices rocketed.

As far back as the mid to late 90s I was laughed at for saying the western suburbs of Sydney represented excellent value. Many people sneered when I suggested the Adelaide Hills.

My recommendations are usually the opposite to the common advice. If there is one thing I have learned in all my years in real estate, it is this: The majority opinion is usually wrong. When I first began my real estate career in 1972, I was told I was too late. The boom was over. I soon began to invest.

To me, real estate investment is relatively easy to predict (much easier than the weather). All you do is follow the essential rules I outlined in our Boom & Bust report, such as only buying when the return is greater than seven per cent.

Granted, I am conservative. I don’t always get it exactly right. But I stay safe. I always focus on risk before return. While some people may still make great returns, I believe the risks in most areas today are very high. Sure, if people had not invested in Melbourne and Sydney in 2002, they would not have enjoyed the continued rises. But these rises have mostly been driven by ignorance, misinformation and greed. The recent increases have been a boom without substance.

We will be releasing another property report soon. In the meantime, take care.

Neil Jenman

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