In this blog post, I want to discuss the D word.

Depression?

Investopedia.com defines an economic depression as an extreme recession that lasts three or more years or which leads to a decline in real GPD of at least 10% in a given year.

There are multiple statements from state and commonwealth treasurers to the effect that it will take three years to recover from lockdown and GPD will fall by 10% or more this year (7% fall already in the June quarter).

I’m not sure why we aren’t talking about the likelihood of an economic depression – but in my opinion, adopting the above definition, it is inevitable.  But this is not the D word I have in mind.

(As an aside – we should also be discussing psychological depression and the other non-economic costs of lockdown).

Developments?

There have been so many developments as a result of covid-19 – working and studying from home, the boom in on line retail, reductions in movement, reductions in migration, increased government spending, changed perceptions of government’s role in the economy, curtailment of individual freedoms and the list goes on.

All of these developments will have profound implications for all of us – but again it’s not my d word.  

Downfall?

China accounts, on the latest figures, for something like 48% of Australia’s exports.  Australia’s recent prosperity has been underwritten by the growing exports of both resources and services to China.

However, the bilateral relationship is deteriorating rapidly.  China’s relationships with America, India and most Asian nations also seem to be deteriorating. 

China has typically managed it’s foreign affairs carefully with an eye on the long game.  It is not yet clear what pressures have led to this recent change of approach.

What is clear is that we are already seeing Australia’s trade focus shifting to other nations – including India which is likely to soon become the world’s most populous nation.

Might this herald the beginning of a period of downfall or downgrading for China?  Certainly it’s an issue we should be discussing.  However, it’s not my D word.

Disruption!

My ‘D’ word is DISRUPTION!

Economic depression, the massive developments and changes in our society and the downgrading of our trading relationship with China will each cause massive disruption to our society and our economy and herald a period of unprecedented change over the next few years.

This is not all doom and gloom however.  Disruption will cause losses for those who don’t recognise the world is changing.  However, it will also create unparalleled opportunities for those that are astute enough to recognise the opportunities and are in a position to seize those opportunities.

I have previously suggested that the present is a great opportunity to reduce excess debt, accumulate surplus funds and focus on maximising borrowing capacity.

I believe now is the time to acquire the skills required to seize the opportunities that will arise.

Preventative Law  

At Lewis O’Brien and Associates we are trying to anticipate the changes to the legal profession.  The old pattern of clients signing contracts without advice and only seeking advice when things go wrong is expensive and unfulfilling.  Far better is a model where we find cost effective ways to offer advice and the benefit of our experience up front and avoid things going wrong – what I call preventative law.

With this in mind we have upgraded the range resources that we offer to clients:

  • Our FREE five-minute guide YouTube videos offer valuable insights to property developers and home buyers.  Click HERE to access these free videos;
  • Our monthly Thursday seminars offer a more detailed guide to topical issues.  The next seminar is on 24 September and will help you to take your joint venture agreements to the next level. Click HERE for more information / to register; and
  • Our upcoming Guide to Property Development Contracts will explore in detail over 12 weeks the major contracts that all property developers have to sign.  Too often property developers just sign the contracts they are presented with and as a result find that their projected profits go to everyone else. Click HERE for more information / to register.

By utilising digital technologies we can provide, in a cost effective manner, the benefit of our experience and the advice previously only available to established investors and developers to allow you to take advantage of the opportunities that are about to unfold!

Lewis O’Brien
Victoria’s Property Lawyer of Choice
Expertise to Improve your Property Outcomes