Adam Flynn, 41, has been in the real estate game since he was 18 – but this is the first time he has been truly worried about the ‘property bubble popping’
Australia’s most tattooed real estate agent and self-made multi-millionaire says the property bubble will burst soon after interest rates begin to rise – and revealed his tips for surviving the market crash.
Adam Flynn, 41, who was kicked out of school at 16 and says it ‘never suited him anyway’, has refused to let his lack of formal education rob him of a financially secure future.
He has been in the real estate game since he was 18 – but this is the first time he has been worried about the nation’s ‘property bubble popping’.
Mr Flynn said he remained quietly confident about Australia’s property market even during the worldwide instability following the September 11 attacks in 2001 and the Global Financial Crisis in 2007.
But now the single dad, who boasts a $7million property portfolio, is anxious.
He believes the continuous ‘cheap money’ low interest rates have left Australian homeowners seriously over-extended.
‘This is the first time I have believed the market is in trouble,’ Mr Flynn said.
The single dad is known for being the most tattooed real estate agent in the country
Mr Flynn left school at 16 deciding it wasn’t a good fit for him, but didn’t let that stop him from creating his fortune
‘I don’t want to be all doomsday about it but I think there is a bigger issue with serviceability (people’s ability to pay off their loan) than people are putting weight on.’
He said individuals looking to buy should hold off for now and keep treading water until after interest rates rise and the impact is fully understood.
‘The average loan is $750,000, if interest rates go up, even by one percent that will cost families an extra $750 a month,’ Mr Flynn said.
‘For lots of families that’s $750, which is just interest not even principal, and it’s the money they are counting on to survive.’
The real estate expert, who oversees Coronis Property Management operations across Victoria, describes his job as ‘being on the coal face’.
What are Adam’s top five tips for surviving the next 24 months?
1 – Consider fixing interest rates if you are planning to hold on to property long-term
2 – If you want to sell in the next two years then do it now
3 – Work out your serviceability – so if interest rates increase you can pay mortgage
4 – If you are looking for a good investment then steer away from mass-produced apartments
5 – If investment is long term remember markets change but history shows a 10per cent growth per annum for houses in Australia
He said he has ‘real-time data of how much people are stretching themselves’.
‘Some experts think the bubble will burst 12 months after interest rate rises but my opinion is that it will happen much more quickly than that,’ he said.
‘I think we will see the effect of interest rate rises after three months.’
He suggests people who plan to offload their properties in the next two years to do so now – before the market becomes saturated.
‘The market will be flooded with properties when those who have become over extended realise they can’t pay their mortgages with each increase,’ he said.
‘This will lead to an oversupply and the only way real estate agents will be able to compete is by dropping prices.’
But if homeowners want to hold onto their properties for the long term there are also things they can do to protect their interests.
Mr Flynn suggests opting for fixed-rate interest plans, which will limit the amount repayments go up every time the Reserve Bank changes rates.
‘Interest rates aren’t going to go down, so it is a smart financial move unless you plan to sell quickly, because then you will get penalties.’
Mr Flynn describes himself as a ‘serial entrepreneur’ and believes making money work hard is more important than earning a good salary.
The real estate expert, who oversees Coronis Property Management operations across Victoria, describes his job as ‘being on the coal face’
Mr Flynn describes himself as a ‘serial entrepreneur’ and believes making money work hard is more important than earning a good salary
What has the Reserve Bank of Australia said about interest rates?
Interest rates will increase next year to counter rising inflation – making it harder for Australians looking to pay off their mortgage, Reserve Bank of Australia governor Philip Lowe has indicated.
Dr Lowe addressed the National Press Club on Wednesday, a day after the RBA’s first board meeting of the year where it left the cash rate at a record low 0.1 per cent and ended its $350billion bond buying program.
He called on Australians to build financial ‘buffers’ to help them weather any future rise in interest rates.
‘Interest rates will go up… I can’t tell you when, but they will,’ he said.
‘We need to be prepared for that and people need to have buffers.’
He said the bank would wait to see how Covid-induced supply chain issues impact prices over the next year before deciding whether to lift interest rates.
‘We expect this evidence to emerge over time, but it is unlikely to do so quickly,’ Dr Lowe said.
‘The board is prepared to be patient as it monitors the evolution of the various factors affecting inflation in Australia.’
Source: Daily Mail Australia
He bought his first property – a weatherboard house in regional Victoria when he was 20 – and built three units on the site.
He has since purchased and developed 50 properties.
He is now building his dream home by the beach on the Mornington Peninsula.
The $6million property with a swimming pool and tennis court will be his private residence but is also an investment.
‘The Australian property market has a history of 10 percent growth per year,’ he said.
He is now building his largest ever investment – a $6million family home for he and his son
‘The market goes up and down but long-term the figure remains the same.’
So his $6million home will ‘earn’ him $600,000 in the first year.
He plans to keep it for the next 10-15 years and believes it will be worth at least $12million when he sells it.