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futurity is now 26 years old  (est. 12/1/99) & has been providing quality financial advice ever since. 

the pebble has dropped!

 

Ripples image

Having watched the property market for some years I have developed a theory. I'm sure it is not unique to me but I would like to think so.

My theory is that the property cycle is akin to dropping a pebble into a pond. The initial pebble drop creates a big ripple and from where the pebble landed concentric circles of ripples spread out all the way to the edge of the pond. 

To me the initial pebble drop signifies property price increases in Sydney, as it is our largest market. When this happens property owners can capitalise on these valuation increases by either liquidating their assets or increasing the borrowings against them to avail access to the increase in equity. Whichever way this happens, it places them in a strong position to investigate and act on other investment opportunities. Armed with this capital they can look at other cities or regional areas in search of other investments offering better returns and/or capital growth. In doing this they stimulate the market in those other areas which can in turn be viewed as the concentric ripples that move away from the original pebble drop, Sydney.

Recently Sydney has experienced so much growth that (to my mind )its market is now maximised. To continue to purchase there, is risking little or no capital growth for some time.* It may be much more beneficial to concentrate on investing in other capitals or regional areas, so as to ride (or preferably be ahead of) the ripples as they move towards the pond’s edge.

The property cycle, just like the pond will experience the ripple effect all the way to the edge after which it will become calm. This calmness can be seen as the inactivity between market cycles. If one has bought before the ripple then this calmness will be an easy ride of indeterminate length as the returns should accommodate the holding costs. However, should you have missed the ripple, or worse still bought at the top of the ripple, then the ensuing calmness may be a very uncomfortable time in which to hold property as the repayments may be greater than the returns.

Should you wish to prepare your asset base to take advantage of this effect may I recommend contacting me to obtain updated valuations of your portfolio and evaluate your opportunities.

* Of course, in any cycle, there will always be some pockets that still offer good value but they require great diligence and dedication to discover.

Testimonials

Rob, Tash, Ethan and Leo

Hi Richard! Thank you so much for all your help in getting us to today. We can't thank you enough! It has all gone so smoothly! Sorry for the frantic call on Tuesday, but it got sorted relatively easy.? We shall learn from the experience! ?thanks again and hope you have a lovely Easter!
Cheers, Rob, Tash, Ethan and Leo ? 7/4/22

Carolyn

Oh yay!!!! Thanks so much! I was starting to think I’d be making more calls tomorrow!!! Thanks so much for everything! You’ve been amazing! After doing the budget this morning this will make a huge difference to us and take so much pressure off! Thanks so much ? 8/8/21

Shepherd

I am very happy!! Thank-you so much for helping me get everything done ? 8/8/21

Steve

Thats a great reduction, thank you for keeping up to date. Excellent service!  Thank you, 15/7/21

Martin

??? 1/7/21

Conner & Nicole

Thank you for your patience, knowledge & help in getting us our first home.  22/3/21

Ken

I have been dealing with Richard Wellsmore for approximately five years, following a recommendation from a friend. During this period I have purchased four properties, most of which were not entirely straight forward and required some thinking out of the square.... (read more)

Cameron

I have known Richard for approximately 2 years and in that time he has been instrumental in assisting my small business with finance for two essential work vehicles... (read more)

Jay

"We were introduced to by my brother-in-law to Richard in March 2018 and discussed all our needs in relation to Mortgages... (read more)

Sid

I have known Richard Wellsmore for more than 10 years and he has been our mortgage and insurance broker for only part of that time. (read more)

Beckie

Wonderful! Thanks Richard! You've been amazing, looking forward to working with you in the future!

Clive

Over the past 10 years Richard has, in his capacity as a Financial Consultant, advised both my company and my family... (read more)

Mark

Richard is both a complete professional and a thorough gentleman. As a client you are immediately drawn to his sense of commitment to meeting your needs. He is extremely knowledgeable and delivers outcomes that are truly in the best interest of his client. (read more)

Ross 

Richard is most personable and has provided just the right mix of encouragement, motivation and advice.  His professional expertise and approachable manner have greatly assisted in helping us to meet our financial goals. (read more)

Steven 

I have been dealing with Richard Wellsmore at Futurity for over 10 years. During that time he has assisted me in purchasing 6 investment properties along with my own home. Dealing with Richard has made each purchase seamless and effortless. I have found the service from Richard to be outstanding. He has handled all possible dealing with the financial institutions on my behalf. (read more)

Todd

I have known Richard Wellsmore for over five years. He has organized our investment loans for our three investment properties and the re financing of our own home. (read more)