Conducting Market Research and 30 Years of Investment with Terry Ryder
Terry Ryder has spent the greater part of 30 years writing about real estate. He started out as a journalist from New Zealand, before becoming a widely renowned real estate researcher, author, as well as founder and director of HotSpotting. Ryder’s work enables him to predict where the real estate market will boom next.
Join us in this episode of Property Investory to hear all about how Ryder organically transitioned from journalism to real estate, the early days of his investment journey, and how he started his successful business.
Ryder is an entrepreneur who turned his knowledge into a business and website.
I’m the managing director and founder of hot spotting dot com dot au which is a Web site which was set up in 2006 to essentially to advise property buyers the best places to buy around Australia taking a medium to long term view looking for the characteristics of the future hotspots and alerting people to them before they become hotspots. Because I think that’s the essential thing that property investors are looking for. They want to know that the places are going to rise before they arise.
A normal day for Ryder involves a lot of researching of information, to search out these ‘hotspots’
A large part of the day for myself and my team is involved in gathering information. We’re scanning all kinds of sources via the Internet and in and other ways trying to pull in as much information as we can about what’s going on in economics and property markets around Australia. We fundamentally believe that real estate markets arise out of the local economy not so much about national economic factors like interest rates or the banking or Royal Commission. It’s essentially about what’s happening in the local economy. So we’re looking for growth drivers looking for events that led us to potential future hotspots so we’re searching through newspapers around the country. Google alerts all sorts of sources trying to pick up on hints and indicators of the areas that are going to go ahead or are going ahead as potential hotspots. So that’s a large part of what we do. We’re putting together reports for both mum and dad investors but also we have B2B services so businesses that are involved in the real estate space often looking for custom-built reports on the areas that they’re interested in. So the teams are also putting together those kinds of reports so we spend a lot of time talking to media because is always hungry for information about what’s going on and markets around Australia. So I spent quite a bit of time talking to television radio and newspaper journalists.
Ryder discusses the sheer amount of information that he needs to sift through and make sense of for his clients.
I mean there’s too much information out there and that’s the problem real estate consumers have.
That’s why we have a business that’s why we provide the service we do essentially there’s just too much stuff out there for people to gather even if they knew where to go to find it.
Gathering it all together takes a lot of time and then making sense of it. That’s the hard part. And so we just have a system where various members of the team have certain areas that they’re searching for information and that’s all fed through to me and every day I’m sending that information off in various directions electronically file with our filing system under various category headings hundreds at different locations around Australia have their electronic file and while I’m doing that process is alerting me to indicators of things we maybe need to delve a little bit deeper into. And new piece of infrastructure announced for example some something that’s come through the information channels we tap into telling us that a market may be potentially rising so we’ll look at it a little bit deeper into that and maybe talk to some local real estate professionals on the ground valuers and buyers agents etc. and that all feeds into a process whereby we create reports essentially that’s what we’re doing we’re creating reports on locations mum and dad investors have a need for that.
And businesses that are in that space also do once a month I do alike Facebook Cumann a where I invite people to throw their questions at me via Facebook and I can answer the questions live via that medium and 90 or 95 percent of the questions I get are about location. That’s essentially what people are interested in they want to know what do you think of this subject what you think of I’m going a property here should I keep it should I sell it. That kind of thing. So it’s really people are very location-driven when it comes to real estate investments.
Originally from New Zealand, Ryder initially came to Australia to play rugby.
Born and bred in a very small town in New Zealand in the South Island came to Australia quite a long time ago in 1978 in fact on a working holiday expecting to be here for maybe a year actually came to Australia to play for a rugby union club. We’re short players and portraying New Zealanders have a pretty good rugby player so why that. I started out as a newspaper journalist and I was working at a newspaper in Wellington the capital in New Zealand and wrote an article about a guy from a rugby club in Ipswich in the Brisbane metropolitan area recruiting rugby players and anyway I decided to become part of that as a working holiday adventure. But having arrived in Australia one thing led to another and I never left.
I said I was a general news reporter at The Courier-Mail in Brisbane in the early 80s when the editor called me in one day and told me that he decided to make me property editor and I protested because I didn’t know anything about real estate. And they said you’ll find out it’s about houses and stuff which is something about the way newspapers were run then and still are afraid. Anyway I was appointed property editor and decided what if I got to do it I’m going to do it well and decided to do a lot of research. There wasn’t much research available in those days so I created my own research exercise and decided to make it a specialty and it just evolved from there from the Courier Mail to the Australian Financial Review and then became a freelance consultant and other things have evolved from that.
So I became a property expert quite by accident just a bit of a twist of fate that comes along people’s lives you know they save lives. What happens when you’re busy making other plans but never planned to be a real estate specialist. But that meeting and the Office of the editor of The Courier-Mail way back about 1982 to kind of fight for those terms that sort of dictated the future.
Ryder has had many careers before he finally settled on real estate.
My first job was in banking I very quickly realised that wasn’t for me but accidentally it made me realise that I wanted to do something in the writing space because I failed to show up for a staff meeting at the bank one day and they appointed me branch correspondent to the national magazine. So I decided if I was going to write reports for this magazine I was going to have some fun with it. So I satirized everything happening in the bank and I noticed that people who worked in the bank absolutely loved the fact that they enjoyed what I wrote so I decided I wanted to become a writer.
So I went to journalism school and then started to work in newspapers and that led me to work in the sports department of the major newspaper in Wellington. My encounter with the man from the rugby club in Ipswich on the fringe of Brisbane and that lead on to everything else it’s amazing how step by step little slices of fate lead you to where you end up.
Being well-practiced in writing as a former journalist came in handy down the track for Ryder.
I’ve published four books. I went through a phase of writing and publishing books for were published. But the last one was 10 or 12 years ago the novelty wore off I guess so much work goes into them. I am planning to return to publishing books on real estate topics and other things. The ones I have published were very much orientated towards the consumer protection side of real estate learning to pay people to the perils and pitfalls and some of the shonky elements of real estate that needed to be aware of. Buyer beware was one title.
I also wrote a book called real estate without agents which were designed to show people that they can actually sell property themselves without needing to pay a state agent commission so I’ve published four books of that nature and planned to go back very soon. Part of this year’s plan is actually to get another book written on real estate topics so that’s something I love doing. It’s just very time consuming and running a business and writing books aren’t necessarily compatible time-wise.
Despite being very different careers, the move from journalism to real estate happened organically for Ryder.
The biggest thing is in the area of research when I was property of the Courier Mail in the early 80s and then at the Financial Review in the mid-80s, there was really no source you can go to for real estate information. There was no domains or core logics real estate dot com that you didn’t exist. And so I decided that I was going to do my own research. So I created a research exercise myself I used to work very long hours because I just became fascinated by it. I didn’t just want to recycle press releases or just report what people were saying in the industry I wanted to know what was going on. So I started researching what was selling how much it was selling for and the commercial space as well as residential. Who owned the big buildings. Etc. and that became the basis of everything I did and also it became the basis of my consultancy when I evolved out of newspapers into becoming a consultant to major property firms and I used to write research-based reports for them. No one else was doing that at the time so the big difference now is that everything has changed in that regard. There are so many research sources obviously the evolution of the Internet and community computer technology has revolutionized that.
And so now we’ve got to the point where there is as I said earlier there’s too much information and then it becomes mind-boggling for people particularly as a certain degree all the information about residential property is dodgy data or rubbery figures to a certain degree so you can pull and price data from say six different sources and they’ve all got six different numbers for the same market. Some claim the particular market is rising. Other sources give figures that indicate it’s falling. So how do people make sense of that? And that’s the problem consumers have. There’s all this conflicting data swimming around and media and I think people are confused and a little bit daunted by it all.
Yeah yeah yeah.
So that’s one of the reasons we have a business and people need services like us to try and make sense of it.
Sourcing the kind of information Ryder was looking for was very different back in the 80’s.
It was like just setting up an exercise and then talking to people in the industry each of whom knew something and if you talked to enough people you find out everything you need to know. I mean I remember there was one phase in Brisbane where all the best corner sites in the centre of Brisbane were occupied by traditional pubs and developers was buying them because they were prime real estate to build office buildings primarily. So I created an exercise finding out where all the pubs are located in central Brisbane who owns them. How do you know what size lot size they wear et cetera et cetera? And that became a valuable piece of information for the industry because a lot of people were looking for that kind of property to the buyer to redevelop but it was just a lot of foot slogging and phone calling in those days.
And your almost like a private detective not like searching for the person you’re searching for property.
Yeah and it was actually being in a newspaper journalist in those times and it’s certainly the reporting of real estate was very different then it is now today it’s pretty much an exercise of recycling press releases which to me isn’t journalism at all. Publishing a press release was a sacking offense when I was working as a property editor in the 80s. So you were generating your own articles by going out and talking to people on the street finding out what’s going on and the idea was to be the first to know of the major deals that were coming up and you could do that if you talk to enough people.
So there’s a very good way to learn about research and research was about six foot slogging and talking to as many people as you could to find out what was going on to a certain degree that’s still the case.
Ryder had a week between columns to make sure he had sourced all his information, and written his article.
The resources in newspapers were a lot more than they are now. So you did have to certain extent the resources to do things well. But my section at the Courier Mail was a weekly section published on a Friday so you had the week to get your stories together if something was really high it would go in the general news on the day. But generally speaking, we’re working week to week we were working Monday to Thursday getting to get the articles and features to be published on Friday so it was not quite the daily deadline pressure that people working in other sections of the paper had. So that was a little bit easier. But a lot of work we worked long hours to try and do it well because I’ve always had this obsession with whatever I’m doing and kind of do it as well as I can. So I’ve always been a bit of a workaholic and the area that I’m interested in working in which isn’t a bad quality to have as long as you keep it under control.
Ryder explains how he first got into property investing, after being thrown into the real estate sphere by his employer
I was actually quite a late starter. I initially was interested in the subject because I was appointed to do it so I thought okay I’m going to do it as well as I can but I wasn’t that interested in wealth accumulation so I was slow to get interested in investing personally but eventually I did. And early on you know I think anyone you talk to I’m sure you’ve had this experience anyone you’ve interviewed who’s had a long history with real estate investment tell all the mistakes they made early on I think everybody has had that experience. No one’s had a clean sailing career as a property investor in the sort of with the wisdom of hindsight you wish you’d done things differently.
Early on I was buying and selling net worth of hindsight I wouldn’t have done that I would have accumulated just kept in what I initially had owned and just added to a portfolio but I didn’t understand in the early days the importance of doing that so I was buying something and after I’d grown and selling it and buying something else and did quite well from that then I would have done a lot better I think long term if I kept everything that was good and just accumulated the growing portfolio. But early on I had a philosophy that whatever I bought it was going to have a view I decided that property with a view had a selling feature and that seemed to work pretty well for me. But along I just noticed that things even ugly real estate this is one of the things I still believe to be true is that ugly real estate grows and very often as well as pretty real estate is all about affordability for a lot of people. And what it’s close to is more important than the actual look and feel of the property itself. Well locate a property close to a train station for example that’s affordable close to shopping close to schools all those basic things that I start to pick up on early in my property investing career and still I believe remain true. I’ve added that extra element through the hot-spotting process where firstly we’re looking at really great locations and then have an underlying economy that’s going to support superior growth. But within that than looking for a property that’s got good proximity to public transport shopping and schools so stay as the fundamentals to look for.
Ryder describes the common mistakes made by first-time investors, who don’t follow these fundamentals.
That’s really interesting that in the last week we’ve seen published some research out of real estate dot coms and they were looking at where people were showing the most property searches they were interested in Sydney people were looking outside of New South Wales and where Melbourne people were looking outside of Victoria. And what it showed was that they are looking for shiny objects. The vast majority of searches from people in Melbourne and Sydney outside of their own areas were focused on the Gold Coast, for example, the Gold Coast as it does not have a great track record for capital growth particularly the high rise market as a very poor record but people are learning by those sexy locations they got a bit out and a sizzle that appear like great places to own real estate but you know they’re overlooking the fundamentals and often contrast the capital growth record of a surface barrier department with a three-bedroom house in Dubbo and regional NSW full is by far superior investment over time but a lot of people don’t appreciate that they’re not understanding the fundamentals of what makes a good property purchase.
It’s been 30 years since Ryder bought his first property, and claims in hindsight, he should have held onto it longer.
I bought my first property because I was renting and got sick of having to move all the time because for reasons outside of my control was one year in which I had to relocate six or seven times because the landlord decided to sell or I’d offended the landlord in some way and he kicked me out and I decided I’m sick of this I’m going to buy my own place. And of course 25000 dollars that was in a very modest suburb in Ipswich in the far west of the Brisbane metropolitan area. And at that point, I was actually working at the room so it was a very long commute so it’s interesting that there’s a lot of media today about first-time buyers can’t afford to buy and they’ve got to go into far outreaches Well it was the same situation way back then more than 30 years ago when I bought my first place. That was the best I could afford. I couldn’t afford to buy clothes again and so you know to get on the property ownership ladder you first got to be prepared to make sacrifices and compromises. No one gets their dream home and their dream location as the first purchase. Even back then things were cheaper but you know incomes were lower as well so it was all relative. So they got twenty-five thousand dollars. And whenever I drive past these those I look at it and think oh my god I can’t believe I live there is the idea of peace.
But it grew in value a couple of years.
It grew from 25 to 40000 and I sold it and my second purchase was a lot closer to the center of Brisbane.
And so I kept doing that until maybe on my fourth purchase I was closer to what I regarded as the dream home. And as I say with hindsight I would have kept those properties and just made them part of a rental portfolio but I didn’t understand the wisdom of that back then.
Ryder explains that buying property wasn’t so simple in the 80’s.
So that’s just some respects it was harder back then because the only time who weren’t the borrowing options that exist now the only place you get a loan was that the people you’d banked with for several years and built up a record with and there were no government grants or stamp duty concessions and things. So how do you respond?
So it was harder and it.
And I was going to say interest rates were very high as well too in comparison to today.
I mean I remember my parents were telling me that they had like 18 20 percent interest rates.
In the mid to late 80s interest rates were about 10 percent and Paul Keating kept raising them to try and dampen down the boom but the boom kept raging and mortgage rates did get up to 17 18 percent before the been stopped in the late 80s and I experienced that so yeah in all those respects it was harder back then. So all relative.
I know prices you know in the biggest cities are pretty high but some people are willing to make sacrifices and compromises and that’s the key thing they can get their foot on the property ladder increasing. We’re seeing people now going down the rent vesting part which is probably a good compromise. People decide well we do want to live in certain areas of Sydney or Melbourne. We can’t afford to buy them but we don’t want to live there so we can buy our first properties are an investment property and maybe a good regional centre that’s affordable and I think that’s a great compromise to make.
And right now there’s plenty of pumping places in Australia that the media is overlooking because they tend to focus on the big cities.
Why The Media and Real Estate Don’t Mix: Market Research Overview
Throughout his investment career, Ryder believes, in hindsight, he could have made other decisions…
There was one in particular that I do wish I’d kept it was very much my first house actually close to the centre of Brisbane and it was quite a modest and ugly place and of course I recall about fifty thousand dollars but it was on a great block of land that was elevated with views looking up the Brisbane River to the Gateway Bridge. And I sold it for 110000 so I double my money in a relatively short space of time and have done very well but I noticed last time I drove past that that someone had bought that knocked it down and built a mansion on that block. And so imagine what it would be worth today.
One of the lessons learned by Ryder on his journey is the importance of patience and persistence in a search for property
A good object lesson is come from some years ago buying or trying to buy a property in regional New South Wales and for a whole host of different reasons every property I tried to buy just didn’t come off. Someone bought it out from under my nose or that the vendor changed their mind and decided not to sell after I’d done a lot of work and spent a lot of money on searches and valuations etc. and it just dragged on for months and months but I persisted and eventually I wound up getting a good property in that location and there’s no lessons out of that and that is it. It does happen that way sometimes and you have to persist and be patient. And the other lesson was that never to be repeated. Bargains happen almost every day. So you think the property that your first target is the only one is going to fulfill your dreams in that location and you miss out. But another one that’s even better will pop up if you persist. One of my mentoring clients has actually been through that process just in the last several months just constant frustration of targeting properties that look great. Exactly what we’re looking for and then for some reason someone beats them to it or they do the building and pest inspection and find it’s riddled with termites and it’s taken about four months he’s finally bought a property and that’s probably the best that we’ve looked at and that formant process. But and if he’d given up and lacked patience and persistence he wouldn’t have got there.
It’s a lesson that even someone doing it as long as Ryder needs to be reminded of at times.
I’ve just re-learned that lesson today, in fact, this morning I’m looking to buy. I don’t mind telling you in Bendigo in Victoria which I think is a for a lot of potential right now and in the future and the property that we were targeting has just been sort of snaffled from under our noses by another buyer and I’ve just applied the same attitude that the property was ideal for what we were looking for. But another one as good or probably better were wool will pop up next week probably. And so I’m totally unfazed by that. There was a time when I would have been devastated to witness what appeared to be the perfect answer to my current criteria but you know experience is a very valuable thing in real estate and this.
Ryder describes the realisation that changed the investment game for him.
I think the aha moment was understanding that it’s not about buying and it’s not about trading real estate. I mean that’s actually a very foolish way to go about it. You’re selling and buying costs eat up so much of your capital gain that you’ve achieved, the aha moment was realising that it’s about the accumulation of good assets. I think it might have been something that I read from Warren Buffet. I mean he’s one of the smartest people in terms of investing he invest in share market type investments, not real estate so much but a lot of his philosophy applies equally to real estate. And I remember him saying that he applies a strategy whereby it doesn’t matter if they close the share market for the next five years he’s happy because he buys assets that are fundamental long term and value doesn’t buy them with a view to selling then he buys them because they are good assets and he’s got plans to keep them for the duration. And I think that’s very true in real estate as well. So they are accumulating good assets and keeping them.
In a cooling market, Ryder also emphasises the importance of adding value yourself.
And more recently I think the aha moment as some point in the recent past was that it’s no longer about passive investment as you might call it we buy something that’s rentable and has the potential for capital growth and you wait for it to grow. Increasingly investors including myself are looking for something to accelerate the process so we’re looking for that but also something we can add value whether it’s through renovation extension building granny flat or subdividing or redeveloping in the future. I think it’s about finding a property that has the zoning and the land size and the potential to do something extra with. And what I’m currently looking for very much fits that general category it’s something that immediately rentable but you can subdivide or build a second dwelling or perhaps redevelop with townhouses in the future.
Most importantly, be educated about your property and what you may be able to do with it.
Well, a lot of properties already have their zoning in place already has what’s required to do extra with it quite often the seller doesn’t understand the potential themselves.
Ryder describes how his business works to find out the latest hotspots all around Australia.
Because we do know there’s a report that I’ve got to update next week called How to identify hotspots and the certain characteristics that we look for. When I was going back more than a dozen years when I was planning to create this business I started out by doing a series of articles for Money magazine where I each of the series dealt with the different aspect that my research showed created hotspots it might be the ripple effect it might have been proximity to jobs.
I focused on each topic individually in a series of articles that were published in Money magazine. I was doing the research not only for doing some money as a freelance writer at the time but to create the research basis for the hot-spotting business. So when our research but we’re looking for certain characteristics and events and probably the single most important one of eight distill it all down to one word the word is infrastructure and a good location to only have the good existing infrastructure but more particularly. The Game Changer will be planned for new infrastructure.
Here’s an example of this theory in practice.
I’m in Sunshine Coast hinterland the Sunshine Coast is a great case study five or six years ago when cleated the Sunshine Coast and a no go zones report because it was a poorly performing market as essentially its economy was about tourism which is a very fickle and volatile industry very very prone to downturn and so real estate didn’t perform very well.
So hadn’t shown any growth in most of the last 10 years for example.
By its iconic reputation but something fundamentally changed and it was through infrastructure spending is 20 billion dollars were happening in the Sunshine Coast was a medical precinct being created that wasn’t there before it created a whole new industry for the Sunshine Coast has brought a lot of new people to live there. Many of them very well-paid people and that’s really given put a turbo charge on that property mark and are spending half a million on the airport spending a billion dollars right now on that motorway. There’s a new CBD being created in Maroochydore the biggest shopping centre on the Sunshine Coast is being expanded by 400 million dollars. All these things are happening using insurance to set up its national headquarters on the Sunshine Coast. That wouldn’t have happened five years ago. So those are the sort of game-changing things that we’re looking for and it all centers around infrastructure.
Ryder puts growth in any market down to infrastructure spending.
I believe that the biggest single factor for Sydney’s boom in the last five years until recently was the infrastructure spend tens and tens of billions of dollars being spent on rail links and motorway upgrades in universities and hospitals and that generates economic activity it creates jobs and out of that comes to mind for real estate the wealth that’s created or helped to create has made the Sydney NSW economy fundamentally the strongest economy in Australia and that’s generated a property boom. A lot of wealth has come out of that.
He explains how some increased infrastructure can snowball into more and more growth.
I think the things demand was there as the action of government has been lagging. So the Sunshine Coast region was a growing region because it was you know in terms of lifestyle a good place to live.
There are many factors that affect whether or not a market will grow, including what’s happening in other markets around Australia.
Medical services were falling behind and there was a need for a new hospital so they built a two billion dollar one after much lobbying from local people and. And then once that was established some of decided well we’re going to build a private hospital next to the public hospital and then specialist medical buildings were built and so suddenly this precinct devolved so one thing led to another. But in the case of Sydney it’s a huge need for the infrastructure that they’ve been building over the last say five years just at the previous government was just not spending anything on infrastructure or was so riven by internal division and corruption and all sorts of distracting things that governance wasn’t happening and spending on necessary infrastructure got way behind. More recently they’ve caught up and it’s generated a strong economy. So the only factor but it’s been a big factor.
Another growth factor to look at is how proactive local councils are.
With the Sunshine Coast and there are other places. Geelong is a great example of that particular economy just outside of Melbourne it is absolutely thriving as a lot of it has been generated by infrastructure spending a feature I think that’s underrated and a lot of people wouldn’t even think to look for it the importance of a proactive local council or a lot of the rising areas in terms of real estate have very strong proactive councils that go out there and actually encourage people to come and live encourage people to come in and best and set up businesses the Sunshine Coast definitely has that Geelong definitely has that you know these are economies in transition Wollongong and other one or used to be a smokestack economy and now it’s more about health and education and I.T. services. Geelong is very similar it’s evolved from the old blue-collar histories to modern industries and that’s been facilitated by ambitious local councils and also state governments to some extent.
Ryder discusses the importance of being educated and proactive in your investment decisions.
There are processes that create these things are quite long and involved processes. So it starts with an idea and then it becomes a proposal and then some research and some debate and eventually it will happen but it’s quite a long drawn-out process to a certain extent. We’re gathering it all together and taking a punt sometimes that something will happen. I mean a game-changer for the peninsula in the north of Brisbane was the new rail link that was promised for 50 years before they actually decided to do it and actually deliver it. But one of the interesting things about infrastructure is there’s the sort of three phases of growth. One wonders when they announce it and then the second is when they actually start building it. And the third biggest one is when they have finished and people can touch and feel and see the benefits. So you stand to potential to gain the most as an investor when you buy when the announcement is made that you’re taking a risk that the political announcement will be delivered on quite often promises kept and probably the safest time to invest is when they actually start building it because you’re pretty sure it’s going to go ahead and be finished and the benefits will be felt. But most people investors have essentially herded animals so most people will wait till it’s finished and then oh yeah that that’s an influence maybe would be good to buy there were the smart people would have bought say two years earlier and we’d be getting the most benefit. And that’s one of the fundamental truths in investment. Most people don’t get fantastic results because they’re herd animals. They follow the herd and by the time they buy the booms already well underway the people who do best are the ones who buy ahead of the big upsurge. But relatively few people who have the wisdom and the foresight and the courage to actually run in the opposite direction to the pack so you know smart people will be buying right now in Perth but most people wait until I read that the Perth market’s rising before they even think of it.
Many will miss out by waiting until the herd goes in that direction.
The rise is inevitable but most people aren’t sufficiently well researched and sufficiently independent in their thinking to act upon that. I also think people are going to be amazed and surprised about Adelaide when the word finally gets out. We’ve been trying to convince people that Adelaide is a looming hotspot for all sorts of reasons that are happening local economy people are very hard to convince about Adelaide. My next purchase will be there because I really believe what’s happening and it’s going to be very exciting. But as I say most people are pack animals. They’ll follow the herd when they read that there’s been happening.
The first thing is going so slowly gradually back through the period that Sydney Melbourne is booming Perth kind of being in retreat because fundamentally because of its links with the resources sector and know the previous resources and best boom. So prices are down. So great opportunity to buy as long as you believe that it’s not going to go down any further and I don’t think it will make sense.
The indicators now are actual prices writing one of the problems is that people use media as their research medium which is a huge mistake.
One of the things media does is they generalise so they produce one figure saying that prices are down 2 percent last 12 months. If you do it suburb by suburb as we do you know there are pockets within Perth that are already rising strongly particularly the top end and that’s often the beginning of a cycle most cycle start with the top end. Not always but mostly. And we’re actually seeing strong price growth in Adelaide and Perth in the million-dollar suburbs but not across the board. So that’s an indicator that something is happening. The reduction in vacancy rates is another indicator quite often rents and vacancies are a precursor to price movements that actually happened in Sydney prior to Sydney’s getting on its growth path about 2013. A couple of years where rents rose a lot but prices didn’t and that was an indicator for the smart people it was a good time to buy in Sydney. So we’ve seen vacancies dropped in Perth to a point where they are now about 3 percent and falling. We’re starting to see evidence of rental growth again and we’re seeing movement at the top end of the market and also in our quarterly research of demand figures sales activity we’re seeing a big uplift in sales activity in Perth. So all of those things are telling us that Perth is ready to roll. And it’s not going to fall any further than the underlying state economies improve the lot. The resources sector is revitalizing. Jobs are being created again. So I’m pretty confident about that being a growth market meaningful but now is the time to be looking at.
And the mentoring client I mentioned earlier who is frustrated because various attempts to purchase have been thwarted for various reasons he’s just now secured property at a very good price in a good area in Perth and I think it’s going to turn out to be a very good investment for him.
Terry Ryder has also mentioned Adelaide as a top hotspot for growth in coming years.
I do believe that real estate markets arise out of the local economies. And I’m excited about what’s happening in the South Australian economy. It’s got a reputation for being a low growth state on population and income but it’s changing a lot and the daily collection of information it just keeps coming through you know that the Deloitte Access Economics the Oxford Economics those sorts of people what they do there and the CommSec state of the states report their quarterly reports and noting, for example, the rise in business confidence is higher in Adelaide than anywhere else in Australia and many of these organisations are predicting South Australia to lead on economic growth in the next few years and that’s coming out of one of the things that I don’t think people understand is that Adelaide is the high tech innovation capital of Australia. We’re constantly reading in our research that major businesses many of them are global businesses are moving their headquarters to Adelaide for that reason but it seems to be flying under the radar screen of Australian media and Australian investors Technicolor. I’m sure everybody is happy with Technicolor play movies. They’re a business based in France but they’re setting up their own headquarters right now in Adelaide creating hundreds of jobs and they’re going there because they recognize this is where it’s happening with high tech innovation in Australia Australia’s new space agency has been set up in Adelaide Elon Musk with the battery technology he’s set up as housetrain operation in Adelaide. There are dozens of examples like that and it’s really building on that momentum. You know the world is increasingly about technological innovation and whereas it’s happening in Adelaide and in addition to that you’ve got the contracts for building vessels for the Navy. Ninety billion dollars worth starting right now and that’s going to be massive for a city the size of Adelaide for the city of any size for Sydney be massive for Adelaide it’s so all of that is happening. Adelaide is also a strong resources state and that’s the national leader for alternative energy development wind farms solar farms various hybrid renewable energy things. It’s happening fundamentally in South Australia. So those are the reasons why I’m really excited about and you know looking like Bendigo as I mentioned but the other place I’m looking for my next purchases certain parts of the Adelaide market.
Ryder keeps himself responsible for his advice, by revisiting his proposed hotspots every year.
The current edition of Money magazine I still write for it and in the February edition I always write the top 50 property hotspots report and part of that as we review it out our tips for last year go. And so that’s part of the exercise each year when we write that feature and we looked at what we took last year actually do very well some of the locations that we suggested because you know we look at the factors that we know drive real estate markets. And right now there’s plenty of pumping places in Australia that the media is overlooking because they tend to focus on the big cities regional Australia is where it’s happening at the moment that’s where most of the growth markets right now are regional Victoria is going ballistic. Regional Tasmania parts of regional NSW and increasingly regional Queensland starting to deliver growth markets like Macai is leading the comeback in central Queensland. You know that the research that we do actually identifies these places but you’re not going to find out about media because all they want to write about is the downturn in Sydney.
Of course because that’s how they make money.
Anyone talking about gloom and the need if that’s what the media wants because that’s how they can sell more ads.
But if you cut through all that you come to stuff that you two got there a lot.
But it does create opportunity for businesses like yours and businesses like mine because media is just not providing what people need in that space.
He shares some of the resources that helped him on his journey in investment and business.
I’m just a general philosophy of reading as much as you can. There’s been a lot of real estate books written over the years but not all of them are great and also some of the books to be read are not specifically real estate books. I’m just actually looking at my bookshelf in my office here. There’s one I found great recently called The Answer was written by Alan and Barbara these are the people who wrote the original book on body language and they invented that concept that people might be familiar with. A very good book on how to call the answer on how to go ahead with your goals. The object of life is another one I’m looking at called Winners and How They Succeed by Alastair Campbell who was the speechwriter for Tony Blair when he was prime minister of Great Britain. That kind of book I think developing a reading habit reading those kinds of books you know avidly is a key to success in any sphere but certainly in real estate because you learn so much. A good book that you read. So yes I had meant as it suits the authors of some of those books and I’ve adopted some of those strategies to be more successful in business and in life generally.
Not all good advice is given directly face to face.
I think the best advice I’ve come so indirectly from things that I’ve read not from someone who is standing in front of me talking to me.
You know I mentioned Warren Buffet quite often quoted him and in my reports on real estate because his philosophy is so relevant to real estate is fundamentally taking a long term view accumulation of good assets and keeping them. That’s very much his philosophy but probably the number one philosophy for Warren Buffet is that if you do the opposite to the herd you buy when others are selling yourself and others are buying. And that’s what I think we’re real estate investors get it wrong the most as I mentioned earlier they just follow the herd and the readers are being won. They pile in. Whereas the Warren Buffet philosophy is you’re doing the opposite to what it’s doing. And I think that’s fundamentally a very good philosophy. So that’s where I think you would get the best advice by reading books by interesting people and successful people on understanding what they did or the people writing them. The Good Book winners by Alastair Campbell he’s interviewed people who are renowned Dean business in entertainment in sport all sorts of different backgrounds all sorts of different spheres of life have a kind of commonality or philosophy that permeates all those different fields of endeavour that make them winners and hence the title of the book.
And that’s where I think you get the best advice I have received.
If Terry Ryder could meet himself 10 years ago, he’d have this to say:
I would have said to him to get busier with investment and to understand the importance of accumulation rather than trading certainly those things back Bakhit judgment I think of probably a mistake I’ve made has been been very good at making other people wealthy people have followed my advice particularly on location I’ve done well and sometimes I think I’m too hesitant to follow my own advice.
All those probably more too busy running a business and doing other things to put the time and so I went back 10 years.
That would be I think a change that I would make.
I love your hindsight we always learn something from it.
Yeah absolutely. But it’s never too late right. You know no matter what stage of life you can make a beginning but I think and best advice to people out there is to start as early as you can even in a very very small way just get yourself on the path you don’t have to be in a hurry you don’t have to take big risks but start as early as you can and just so by the time you get to a 40 and 50 year already well down the path and you’re not. A lot of people are sort of suddenly wake up one day and say oh my God I’m going to be retiring in 10 years I better do something. You know it’s just so much better and easier for you if he got started when you’re in your 20s even if it means you’ve got to make some sacrifices maybe you can’t go out with your mates to the nightclubs as often as you’d like but it’s worth making a few compromises and sacrifices to get going.
You’ll benefit in the long run.
While he has no intention of stopping, Ryder is looking forward to slowing down a little in the next few years.
Over the next five years I think it’s been being able to throttle back a little bit have had the business set up so that I don’t have to be involved as much although I mean I’ve got no concept of retirement I want to be. But David Attenborough of real estate research I think is the age of 91.
You’re still doing what he loves as enthusiastically as he was when he was in his 30s. Yes, I intend to be the same.
But I’d like to be able to have the option to be a little less involved because I’ve got things up to set up exactly the way I want them my the real estate portfolio humming along and allowing me to run to write more books and travel as I’d like to think.
He believes some luck and a lot of skill and education have contributed to his success.
I think it’s probably 75 skill hard work and 25 percent luck plays a part but I really think that there are very few people who succeed the way they wish to succeed in life and that’s not all measured in terms of monetary gains all sorts of ways of measuring success but I think luck is a relatively minor component of any successful life. I’m reading as I’ve indicated about success stories all the time and they all have elements of tragedy and hard work and reversals and believing they never going to make it. But persistence and hard work is the common denominator of all people who’ve never got to where they want to go.
So I like a combiner but it’s not a big one and.
If you wish to get in contact with Terry Ryder, here’s the easiest way to do so:
They can contact me directly by email Ryder, R Y D E R at hotspotting dot com.au But are you always happy to respond to people’s questions and inquiries. They can find the hot-spotting Office 0 7 5 4 9 4 2 5 7 5. There they also chat facilities on the website. There’s alike chat thing that’s available during the day and quite often they can talk directly to me via that. So there’s all sorts of ways they can touch base they can get on our free newsletter mailing list and that’s a good way to start out and get an idea of sorts of information. We send out before access to spend your money on on the reports that identify future hotspots and we have an increasing presence via social media particularly on Facebook. I’m doing this every Tuesday night at the hotspot of the week which is a live broadcast. Like you and once a month. Thursday I deem what I call my war on media misinformation.
Yeah, that’s a very broad topic. So there’s all those ways that they can sort of engage with us and now that the Facebook things are great because people you know sort of can identify with that and they can in a question or just follow a line broadcast and respond for it via that medium.
This episode was produced by Ashlyne Ocampo with narrations and interviews conducted by Tyrone Shum.