When most Australians are asked about ‘the X factor’ they think the question is about a science fiction TV show. However, ‘the X factor’ is also talked about in the less glittery world of economic forecasting.

Economists refer to ‘the X factor’ when an unforeseen event or situation blows all their carefully laid forecasts away. Like the subprime crisis did last year.

If you would you like to know my thoughts on what the X factor is going to be for our property markets for 2008, please read on. But first I’d like to give you some background. 

I first came across the term “X factor” many years ago when distinguished economics commentator and forecaster, Dr Don Stammer, used to try and predict it for the forthcoming year in the January edition of BRW magazine each year. Of course, by definition the X factor is unforeseen, so you can’t really predict it.

But it was a little game he used to play and then review his prophecy 12 months later. And it is a game I also took up many years ago and have had fun with over the years.

And there have been some amazing X factors in that time.

Events such as the MX missile crisis in 1985, the stock market crash in 1987, the Asian Crisis of 1997, the terrorist attacks of September 11 and the Boxing Day Tsunami which hit South East Asia in 2005. These are all examples of ‘X factors’ that stunned the world as well as experienced economic forecasters.

These major X factors affect the economy at large, which of course affects our property markets, but our property markets also have their own specific X factors. Unforseen events that affect the best laid plans and predictions.

So when people ask:

“Why do property analysts get it so wrong if they have access to all the research data?” Or…

“Why did a property boom with 20% plus growth catch many of us by surprise last year? And why did the fall out from the Sub Prime Crisis catch us by surprise this year?”

My answer is - there are lots of reasons, but one is that every so often financial markets get hit with an X factor – an unforeseen circumstance.

Clearly the X factor for last year was the US Sub Prime mortgage crisis and we are still feeling the effects of it this year.

Over the last months I have being doing my research looking for the X factor for 2008? And I found a few surprises.

No it’s not likely to be high interest rates – that was an expected consequence of the overseas financial problems.

The X factor for this year, the real “out of left field” surprise, that could affect the way we look at our investment strategies is probably not what you would have expected.

In fact I am considering 2 events that could end up being the X factor for 2008, and I guess we won’t know which is right until the events pan out.

But if you are not aware of them, and haven’t taken them into account, it could be detrimental to your property investments.

And if you have prepared for them, you may be able to take advantage of the opportunities our changing property markets will offer.

At our upcoming round of Understand What is Really Happening to Our Property Markets seminars, which will be held around Australia in August and September, I am going to explain what I see as the likely X factor for this year. And I have invited top selling author and property tax accountant Ed Chan to join me to share his views.

Everyone knows that the Australian property markets have changed and confusion is rife. Does that mean you have to change your investment strategy?

The truthful answer is – I don’t know, because I don’t know what your strategy is- but congratulations if you have one.

At our upcoming Understand What is Really Happening to Our Property Markets seminars both Ed Chan and I will outline our investment strategies and what we are doing with our property portfolios.

With the all the mixed messages in the media (and many of them very negative) and the changed attitudes of many lenders, plus the stock markets suffering from a bad case of jitters thanks to a financial crisis brought about by the writing of heaven knows how many bad home mortgages overseas, it is natural enough for everyone in the working world, as well as those who are retired, to be worried about the likelihood of an economic recession.

But not everyone will be worried. Some investors will do very well out of the current economic situation. Those who are prepared for what is ahead. And we are going to do our best to prepare you at our Understand What is Really Happening to Our Property Markets seminars throughout Australia in August and September so please make sure you attend.

You may well ask - does the existence of an external shock or ‘X factor’ make all economic forecasting obsolete? Not at all.

There are still economic trends in the world that can be drawn upon when making assumptions about the future. We work in a world of ‘knowns’ and ‘unknowns’ and having a good grasp of what we know can help us.

That’s why Ed Chan and I are conducting our Understand What is Really Happening to Our Property Markets seminars around Australia in August and September.

Together we aim to help you make sense of the media hype currently surrounding the economy and help you understand how you can protect yourself as a property investor.

I have successfully invested through 4 property cycles and Ed through 3 cycles. We each own a significant property portfolio. We are not theorists.

We’ve been through times like this before and we’ll help you discover what others simply don't know about the real estate market today.

Ed and I plan to give you straight forward, no nonsense, practical steps and honest answers to improve your property performance this year and into the future.

We’ll use our expertise to help you uncover answers to:

·          What is the likely X factor for 2008 and why you must carefully evaluate your investment strategy?

·          Where are we in the property cycle and what’s really ahead for our property markets now?

·          How to analyse the key factors that affect our property markets.

·          Understanding investment strategies that work in today’s economic climate and how to protect your existing portfolio in today's market.

·          How you can continue to profit and avoid the pain.

·          Is now a good time to start an investment portfolio?

·          How YOU can arm yourself with the right strategies to make the most of it!

·          How to make best use of the legal tax strategies that can put more dollars in your pocket.

To be a successful property investor there are 2 critical questions you must ask yourself:

1.    “Where the market's heading?” and

2.    “Where am I heading?”

My question to you is – “Are these both heading in the same direction?”

Please click here and join us at our Understand What is Really Happening to Our Property Markets seminars and let’s see if we can get you aligned with what is really happening out there.

These will be held in:

Melbourne: Saturday August 23rd
Sydney: Saturday September 13th
Brisbane: Saturday September 20th
Perth: Saturday September 6th 
Adelaide: Sunday September 7th
Canberra: Sunday September 14th

Please click here to find out more about these seminars and to reserve your place.

Our seminars always book out and have done so for the last 3 years. Ed and I will not be conducting another seminar series like this until 2009 so click here and join us at our Understand What is Really Happening to Our Property Markets seminars.

The rules are different now. As a property investor you need to ask yourself 3 questions:

1.      Which way are the property markets heading?

2.      Which way are you heading?

3.      Are they both in the same direction?

In their only round of national public seminars until 2009, property expert Michael Yardney and tax expert Ed Chan will help you understand what is really happening in our property markets.