Bad News Sells

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In this digital age of media where it is all about how many clicks you get, balanced commentary has become secondary to bad news stories. Bad news gets the clicks and attracts the advertising.

After as many years as I have in this industry, I do not need to worry too much about click rates as GPS is a well-established and viable business.

I have been saying for quite some time, and I still believe, that I do not see carnage coming in the Brisbane apartment market. Some areas most certainly are oversupplied, some are overpriced and some projects will not be successful.

If there was a 20% price correction for product in some areas it would simply bring them back to market value. How much extra does it cost to build using CFMEU labour and to sell the end product through high-churn marketers (the ones that cold call you at dinner time)?

Even if I wanted to, I could not get such comments published in the wider media as they are not considered “click worthy”.

My biggest concern for the residential development industry in Brisbane is how many new lenders are entering the market and how quickly others are growing. I have seen the down side with the solicitors mortgage lending failures in the late 1990’s and again with GFC. Two of my (tedious I know) sayings are:

“It is not how many loans you can handle in the good times, but how many you can handle in the bad times” and;

“Lend because you want to lend and not because you have to lend to keep up with fund-raising”.

GPS remains open for business for new investors, but we are very conscious of maintaining the right balance. When we are not comfortable, we stop lending. We have done this many times in the past 20 years, and it is a major reason why we are still here.

I have no plans for GPS to ever be the biggest (unless by doing a Steven Bradbury). My priority is to maintain the ‘no loss of capital’ record of GPS Investment Fund Limited.

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