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It is always a pleasure to receive a social media post or email from my valued Property Cycle Investor newsletter readers. Especially where they’re bringing a particularly relevant news item to my attention.
This is what happened recently when a very interesting article was forwarded to me.
And today I’ve decided to share it with you all.
First, a big shout out to you, James O’C. Thank you, sir. This is precisely the type of news you should be looking for right now.
The 18.6-year Real Estate Cycle is about to enter its true speculative final few years globally.
Each cycle has always played out similarly to the one that preceded it, even if it “looks” different. This much is shown by studying the history of the cycle.
And yet, how come almost all the news most relevant to its journey seemingly gets missed or ignored by most?
You must concentrate on making your perception razor sharp and block out the white noise of negativity and blatant nonsense that pervades most media today.
The evidence of what’s coming is all around you. This article will prove it.
What’s more, there’s a very opportune window here to make yourself some decent money over the next three to five years.
Does that interest you?
Read on now as I explain how simple innocuous articles can, if you know how to interpret them, give you those vital clues as to the timing of the real estate cycle.
And legitimate ways you can play it for your benefit way before everyone else catches on.
Pay rent and your Weetabix all at the same time.
What’s going on in the fabulous world of supermarkets?
Apart from gouging prices on the necessities that continue to shrink in volume but not in price.
Well, it appears they would very much like to be your landlord as well as offer overpriced foodstuffs.
From a recent Sydney Morning Herald article.
Woolworths has sought a rezoning review for the redevelopment of its Neutral Bay site as it expands its strategy of developing apartments above supermarkets in Sydney, Melbourne, and Brisbane.
The supermarket giant says its residential building projects are a response to changes in shopping behaviour that have also prompted other initiatives such as drive-through shopping and small-format grocery stores.
Source – Sydney Morning Herald
Along with Coles, Woolworths basically has a monopoly in terms of fresh food supermarkets in Australia.
Apparently, this has been driven by changing shopping habits by its customers.
I can understand small format shopping centers, though drive-through grocery shopping – well – it will have to grow on me, frankly.
But you’ll have to excuse my ignorance when I say I’ve yet to meet anyone in my social circles who have claimed that if only they could live above their favorite supermarket, then their life would be complete.
That aside, this development speaks volumes for where we are at this current stage of the 18.6-year Real Estate Cycle.
It is yet another great example of how you should be viewing the world right now but also demonstrates one of those little anecdotes of how the real estate cycle continues to find ways to turn.
I’d say it’s a better use of your time to look for stories like this rather than buying into negative news stories about how things will collapse etc.
This article, while brief, tells me a lot. It’s why I’m bringing it to your attention today.
Look at where these developments are being proposed.
Neutral Bay is a prime local, but the others are at least the same, if not premium address.
Waterloo in NSW, Kangaroo Point in Queensland, Elsternwick in Victoria, which was voted the most walkable places globally by, well, people who live there! It’s also close to the beach and has good schools.
These are the type of locals that property developers would walk over themselves to secure.
Would it surprise you to know that Woolworths has its own director of property development?
A true turning point in property development.
Meet Andrew Loveday. He’s the said director of property development at Woolworths.
In the above article he said mixed-use developments were a response to a demand for shops and services close to where people live.
Loveday said more people wanted to shop closer to home, especially as increasingly dense cities create more congestion on roads and public transport.
True. However, take in what he says next.
Because this is one of the key reasons why I go on and on to you about needing to understand the real estate cycle and what the economic rent is.
The bold text below is my own.
“By controlling the development outcome of mixed-use developments, it means that we can put the customer and community at the heart of our decision-making, as opposed to being solely driven by residential development objectives,” he said.
Loveday said Woolworths had been a property developer for years but its recent move into building apartments “reflects an urban trend of higher density in metropolitan locations.”
There you go. You thought Woolworths was a supermarket business? Think again, they are into the property game.
Once you develop your own real estate cycle lens and apply it to the world, things become crystal clear to you.
Something I’ve strived very hard all year to show you.
If you overlay the pattern of immigration into Australia, it’s the two biggest cities in Australia that are receiving the lions share of new arrivals.
And everyone from the council, property developers, social welfare groups to the federal government are screaming that we need to build more apartments.
Now, let’s revisit two of the above locals, Neutral Bay in North Sydney, and Elsternwick in Victoria.
How to say very little yet explain everything all at once.
Here, there is some pushback from the local council over the plans submitted by Woolworths.
North Sydney mayor Zoe Baker said the council had opposed the Woolworths plan for Neutral Bay because it exceeded permitted building heights and floor-space ratios.
Baker said the retailer, “like any landowner, can build apartments,” but a rezoning to permit taller buildings was not necessary to upgrade the supermarket.
Again, look at what he said as a way of explanation.
“If the rezoning application is approved, it will provide a massive uplift in value to Woolworths without providing a single affordable housing unit,” she said.
Well – Duh!
How do you maximise any footprint of land to extract the maximise the amount of economic rent the landowner can capture?
You build higher. And to do so requires property developers, like Woolworths remember, to effectively lobby the council to overcome their objections. This takes time and money to do.
But as North Sydney’s mayor very eloquently pointed out, the windfall gains Woolworths stands to make here means it’s a worthwhile cost.
It’s time in the cycle now for rampant speculation. The big boys know it. Get the zoning laws you need today, and the path opens for even higher apartment blocks tomorrow.
The trend here is clear. But this is what I want you to take away. You should be aware now where we are in the real estate cycle.
The absolute speculative mania for Australian land markets hasn’t even started yet. This applies globally too.
Here is yet another sign of how businesses you wouldn’t generally associate with playing the land game are aware of this.
Are you prepared yet, like Woolworths? Would you know how precisely to position you and your family to benefit?
Let alone the critical importance of timing both your buying and selling of speculative assets?
Well, you will learn if you take up membership to the Boom Bust Bulletin (BBB). Give me the opportunity to take you in depth into the cycle.
Learn about the history of the 18.6-year Real Estate Cycle and why even today it continues to repeat like clockwork.
It will teach you how to decipher the news that we get bombarded with every day to focus solely on what truly matters. Much like what I’ve tried to do here.
No more negativity and noise, just the science of the economic rent and the timing inherent in the real estate cycle.
This is all you need to succeed. You’ll know what do to. When to do it. And how to tune out the hype and the nonsense in the news.
Do you still think it’s only Woolworths who are doing this? Are Coles and Aldi, two of Woolworths national competitors, also in this game? You bet they are!
This is why it’s misplaced to buy into the negativity surrounding interest rates.
Follow where the big boys are spending their money. Soon you’ll see the smaller companies cotton onto what’s happening here, and they will jump feet first into mixed zone developments based around their own supermarket businesses.
Because Woolworths and co will have already brought all the prime real estate locations, these smaller players are forced to look for locations on the margins.
This is when the property market really goes over the top as everyone piles in.
It can’t come as a surprise to learn that one of the prime sectors to outperform in Australia over the next three to five years are property developers.
But which ones? Should you be spending your hard-earned capital on them today? If you wait, is it too late, as the big gains will all be over?
It’s something the Boom Bust Bulletin is designed to teach you.
As a Boom Bust Bulletin member you will receive 12 monthly editions a year detailing all the key turning points of the cycle, a deep dive into the most important markets across the globe and ways that you can personally benefit from this knowledge.
All derived from our unique and proprietary research – which you’ll not find anywhere else.
Plus, you’ll receive exclusive invites to BBB member-only webinars when we run them.
All this for just US $4 a month, less than a takeaway coffee.
Best wishes,
Darren J Wilson
and your Property Sharemarket Economics Team
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This content is not personal or general advice. If you are in doubt as to how to apply or even should be applying the content in this document to your own personal situation, we recommend you seek professional financial advice. Feel free to forward this email to any other person whom you think should read it.