McGrath Real Estate Shares lose 31% after trading stop
One of our best known Real Estate personalities, John McGrath, has proved just how well he understands the cyclic nature of the property market. He has not made his money on buying and selling investment property this time but in McGrath Real Estate Shares when he floated his company on the ASX at the top of the property growth cycle in Sydney in December 2015.
Mr McGrath listed his company on the ASX at the peak of the Sydney housing boom, at the obvious peak of his company’s earning potential and walked away with a cool $30 million plus for his efforts. Will it make such a difference now if McGrath Real Estate Shares lose 31%.
Like many other experienced commentators, Mr McGrath expected the market in Sydney to cool after December 2015 and was suggesting that investment property investors should look at South East Queensland as an area with much higher potential for short-term growth than the ‘hot’ Sydney market. It is very surprising that Mr McGrath is now reported to be claiming,
“an unforeseen low volume of listings and sales in the first half of April, particularly in the north and north-western suburbs of Sydney, has led to an earnings downgrade for the 2016 year.”
McGrath, which listed in December, has seen its share price fall by as much as 31 per cent when it came out of a trading halt. The share closed down 40¢ to 90¢. They last traded on Thursday at $1.30. I suppose the big question must be, was this really a much larger drop in the market than he expected when the float papers were prepared at the end of last year?
To us, it does demonstrate the power of understanding the property market and timing things correctly to get the most out of your investment – whither it is real property investment or just selling up your Real estate Company!
Full story: http://goo.gl/FSBEq2
