Do your research, Newcastle is still a great place to invest: Terry Ryder

Research is the cornerstone of successful investment but I would guess that one in 10 people I meet conduct genuine research before buying real estate.

 
Most people take the research process no further than a skimming of the day’s newspaper headlines. The outcome is they feel negative, see misinformation as fact and have no real knowledge of the asset class they’re buying.

 
It’s a recipe for poor results at best, a financial disaster at worst.

 
I’ve lost count of the number of times I’ve told audiences about the fundamential importance of doing the research before making a major financial commitment – and then heard a torrent of questions from the floor, all of them based on misinformation from media. Well-informed people would not ask such questions.

 
I’ve watched with growing alarm as more and more people have piled into the auction frenzy in Sydney and Melbourne, inspired by a fear of missing out – the worst reason to buy.

 
And then this week an email came across my desk that encapsulated it all. It was from a wannabe investor who had little idea how to proceed. No surprises there, most people don’t understand how to get started. This Sydney-based consumer was evidently motivated to buy because of reports of the market being white-hot.

 
The email ended with this: “What are your thoughts about the Newcastle market, given the end of the mining boom.”

 
In replying to such communications, it’s hard to know which misconception to deal with first.

 
This consumer has accepted, as a fact that the mining boom is over. But it’s not a fact; it’s a media sound byte. An inaccurate one. And one that a genuinely-informed person would not believe, because the notion is contradicted by daily events in the resources sector.

 
There’s also the muddled thought that if the “boom” was no longer running, Newcastle wouldn’t be a good place to buy.

 
Newcastle is the world’s largest coal export port. A major expansion of port facilities has just been completed. But there’s more to Newcastle’s port than coal. And there’s more to Newcastle than its port.

 
This is an urban area with half a million residents. Newcastle and the Lower Hunter region have considerable economic diversity, with tourism, wine, horse-breeding, construction, manufacturing, power generation, mining and education in the mix.

 
I tallied up projects under construction or in planning in this region and it came to $17 billion in investments. Not all of it is happening now and not all of the proposed projects will proceed. But if just 30% of it goes ahead, it’s an injection of $5 billion in construction costs alone.

 
A lot is being spent on infrastructure. The $1.5 billion Hunter Expressway is almost finished, rail links are being upgraded, the port is being expanded and the airport has just been elevated to international status. The Newcastle CBD is on the cusp of a major rejuvenation process.

 
This is one of the major regional economies in Australia – and one of our most underrated property markets. It’s a vibrant affordable alternative to Sydney and more people should be considering it.

 
Anyone who did an hour’s internet research would know it to be true.

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Terry Ryder is the founder of hotspotting.com.au and you can contact Terry via email or on Twitter.