When buying property you really want to create a list of plausible benefits and disadvantages before you even look at any specific locations. Of course looking at locations can help us develop the list as we stretch our understanding of what is possible. We are looking for lifestyle and investment benefits. The things we might include are:
1. Growth values: Those factors which are going to offer you a greater return on your investment include:
a. National population growth: National population increases demand on the land. Those pressures are greatest in those areas where population is growing fastest, where land supply is constrained by regulation (NSW govt policy) or topographic influences (Wellington, Queenstown)
b. Regional property growth - the total national population does not have to be growing, people just have to be moving internally, eg. Nagoya in depopulating Japan
c. New freeway/highway developments - these tend to reduce travel times - important for holiday destinations outside the city, eg. North Sydney and South Auckland highway extension opened up new areas for weekenders, so lifestyle values drove up prices up to 4 hours north of the city.
d. New airports - These give people the potential to travel longer distances, eg. Australian and New Zealand regional airports
e. Deregulation - This reduces costs which allows far more people to come with fewer hassles. It also tends to stimulate new business activity, which further expands growth. eg. ASEAN, Aust-NZ common markets, EU. Travel and market deregulation are the big factors. Watch the ASEAN region. The Philippines is particularly promising because its English speaking, its an attractive country, its regionally segmented, and it has the most generous visa rules in the world. You can stay 18 months before you need to leave the country (for a few days).
f. Extension of train lines - We are now in recession so we are not going to see a lot of private business building new infrastructure, but you might see governments do it to stimulate the economy. You can anticipate where new stations will be on occasion with existing line extensions. New lines are harder to pick. Sometimes existing urban development or topographical constraints will give you a clue so you can anticipate the development. eg. Tokyo subways
g. Larger block sizes - Larger properties give you the possibility of subdividing it at a larger date. It does not help if everyone shares the same benefit, but its good if you buy one of the original blocks of land in an old town or city which gave residents particularly generous block sizes. eg. Australia or New Zealand. Lot sizes in these countries are often 800-1200m2. Even the Philippines which has historically not regulated land development now makes sense because they have universally adopted policies to do just that.
h. Shopping precincts - Commercial land is more valuable than residential land, and residential land close to commercial precincts is just as special for its convenience, particularly if it preserves its 'residential' character and is not overrun by the neighbouring development. The convenience needs to be retained, the congestion needs to be avoided, as well as the broken bottles and noise that can accompany regional hubs.
i. Exchange rates: Of course it makes more sense to buy in those locations where you can extract some foreign exchange advantage. At the moment we have low commodity prices (except precious metals) so Australia and New Zealand make the most sense because they are free-floating currencies.
2. Lifestyle values: There are those values which make a place a nice or comfortable place to live.
a. Developed countries: Having lived in developing and developed countries I prefer the developed countries for nicer surroundings, amenities, cultural experiences. Living in wealthy, large cities offers the greatest promise, but small, wealthy towns can also offer this, particularly if you have a choice of towns. But the city has far more options. Living in the Philippines, each mall is a carbon copy of the other, except in the wealthy areas.
b. Nice people: City people tend to be cold, goal-orientated, uptight and arrogant, whereas rural people are relaxed and easy going. Some places are just large enough to have a nice balance. eg. Some rural country towns, expat communities elsewhere. Just sometimes you get a glimpse in some new bar in the city before its ruined. If you are an old man needing validation from some 20yo girl, you might appreciate the illusion of a girl from the Philippines desperate to embrace materialism.
c. Nice climate: There are countries where you are uncomfortably hot or cold, and there are those which are just right. Those which are right include Australia, South Africa, and the elevated areas in tropical areas like the Philippines.
d. Convenience: Convenience means different things to different people. It might be enough to be close to your local pub, maybe family; some want the convenience to their favourite holiday destination. Maybe Americans are only too happy to stay in the USA. Australia and NZ might be considered isolated, but given their glorious environments, for many this is enough because its a self-contained experience. It seems perfect with the common market between Aust-NZ.
e. Space & natural surroundings: Many like the buzz of a city, but I suggest a great many people like to escape from people, and to embrace natural surroundings. The USA, Australia, NZ, Canada and Japan are great in this respect, but you will pay in Japan given the cost of tollways. I remember friends paying $100 in tolls just to go from Tokyo to Mt Fuji. That's why the Japanese train system is such good value, you can only afford to use your car for local trips. That's why Japanese 2nd hand cars have unbelievably so few kms on them. These countries had the foresight to protect wilderness areas. Surprisingly Japan also has a lot of wilderness - I have seen it, and its very beautiful too.
f. Contextual values: There are a whole range of values you can appreciate because they are specifically important to your life. For me its mountain biking, whitewater canoeing, public libraries and good communications infrastructure. In a few years it might be schools, day care and hospital facilities.
These are all factors I'm inclined to consider when I buy property. I am a drifter, going from one new experience to another, intellectual and geographical, so these are just some of the issues I consider. I am pleased to say I have for the last 8 years ceased to be a prisoner of some corporate, governmental regime that has told me how to live. I have managed to etch out a living that reflects my values. They key is finding self-aware people who know what they want, and who are heading in the same direction as you. Real people. Its interesting that when you know what you want, you actually attract those people. It has nothing to do with being 'positive', creating a 'positive aura'. That's nonsense, its about being self-aware.
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Andrew Sheldon www.sheldonthinks.com
1. Growth values: Those factors which are going to offer you a greater return on your investment include:
a. National population growth: National population increases demand on the land. Those pressures are greatest in those areas where population is growing fastest, where land supply is constrained by regulation (NSW govt policy) or topographic influences (Wellington, Queenstown)
b. Regional property growth - the total national population does not have to be growing, people just have to be moving internally, eg. Nagoya in depopulating Japan
c. New freeway/highway developments - these tend to reduce travel times - important for holiday destinations outside the city, eg. North Sydney and South Auckland highway extension opened up new areas for weekenders, so lifestyle values drove up prices up to 4 hours north of the city.
d. New airports - These give people the potential to travel longer distances, eg. Australian and New Zealand regional airports
e. Deregulation - This reduces costs which allows far more people to come with fewer hassles. It also tends to stimulate new business activity, which further expands growth. eg. ASEAN, Aust-NZ common markets, EU. Travel and market deregulation are the big factors. Watch the ASEAN region. The Philippines is particularly promising because its English speaking, its an attractive country, its regionally segmented, and it has the most generous visa rules in the world. You can stay 18 months before you need to leave the country (for a few days).
f. Extension of train lines - We are now in recession so we are not going to see a lot of private business building new infrastructure, but you might see governments do it to stimulate the economy. You can anticipate where new stations will be on occasion with existing line extensions. New lines are harder to pick. Sometimes existing urban development or topographical constraints will give you a clue so you can anticipate the development. eg. Tokyo subways
g. Larger block sizes - Larger properties give you the possibility of subdividing it at a larger date. It does not help if everyone shares the same benefit, but its good if you buy one of the original blocks of land in an old town or city which gave residents particularly generous block sizes. eg. Australia or New Zealand. Lot sizes in these countries are often 800-1200m2. Even the Philippines which has historically not regulated land development now makes sense because they have universally adopted policies to do just that.
h. Shopping precincts - Commercial land is more valuable than residential land, and residential land close to commercial precincts is just as special for its convenience, particularly if it preserves its 'residential' character and is not overrun by the neighbouring development. The convenience needs to be retained, the congestion needs to be avoided, as well as the broken bottles and noise that can accompany regional hubs.
i. Exchange rates: Of course it makes more sense to buy in those locations where you can extract some foreign exchange advantage. At the moment we have low commodity prices (except precious metals) so Australia and New Zealand make the most sense because they are free-floating currencies.
2. Lifestyle values: There are those values which make a place a nice or comfortable place to live.
a. Developed countries: Having lived in developing and developed countries I prefer the developed countries for nicer surroundings, amenities, cultural experiences. Living in wealthy, large cities offers the greatest promise, but small, wealthy towns can also offer this, particularly if you have a choice of towns. But the city has far more options. Living in the Philippines, each mall is a carbon copy of the other, except in the wealthy areas.
b. Nice people: City people tend to be cold, goal-orientated, uptight and arrogant, whereas rural people are relaxed and easy going. Some places are just large enough to have a nice balance. eg. Some rural country towns, expat communities elsewhere. Just sometimes you get a glimpse in some new bar in the city before its ruined. If you are an old man needing validation from some 20yo girl, you might appreciate the illusion of a girl from the Philippines desperate to embrace materialism.
c. Nice climate: There are countries where you are uncomfortably hot or cold, and there are those which are just right. Those which are right include Australia, South Africa, and the elevated areas in tropical areas like the Philippines.
d. Convenience: Convenience means different things to different people. It might be enough to be close to your local pub, maybe family; some want the convenience to their favourite holiday destination. Maybe Americans are only too happy to stay in the USA. Australia and NZ might be considered isolated, but given their glorious environments, for many this is enough because its a self-contained experience. It seems perfect with the common market between Aust-NZ.
e. Space & natural surroundings: Many like the buzz of a city, but I suggest a great many people like to escape from people, and to embrace natural surroundings. The USA, Australia, NZ, Canada and Japan are great in this respect, but you will pay in Japan given the cost of tollways. I remember friends paying $100 in tolls just to go from Tokyo to Mt Fuji. That's why the Japanese train system is such good value, you can only afford to use your car for local trips. That's why Japanese 2nd hand cars have unbelievably so few kms on them. These countries had the foresight to protect wilderness areas. Surprisingly Japan also has a lot of wilderness - I have seen it, and its very beautiful too.
f. Contextual values: There are a whole range of values you can appreciate because they are specifically important to your life. For me its mountain biking, whitewater canoeing, public libraries and good communications infrastructure. In a few years it might be schools, day care and hospital facilities.
These are all factors I'm inclined to consider when I buy property. I am a drifter, going from one new experience to another, intellectual and geographical, so these are just some of the issues I consider. I am pleased to say I have for the last 8 years ceased to be a prisoner of some corporate, governmental regime that has told me how to live. I have managed to etch out a living that reflects my values. They key is finding self-aware people who know what they want, and who are heading in the same direction as you. Real people. Its interesting that when you know what you want, you actually attract those people. It has nothing to do with being 'positive', creating a 'positive aura'. That's nonsense, its about being self-aware.
----------------------------------------------
Andrew Sheldon www.sheldonthinks.com
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