Sunfish hit the nail smackbang right on the head.
But you can extrapolate your own conclusions.
But you can extrapolate your own conclusions.
Property doubles every 14 years, not every 7
- Thread starter MichaelW
- Start date
Hi evand,
And that's a great approach too! There's a whole lot of investors here that argue the importance of timing at a macro level to maximise your returns.
There were two real points to my very first post as follows:
1. Even allowing for a very conservative assumption around capital growth of 5.2% pa, residential property investing still produces very healthy overall returns over the long term.
2. Looking back at the Sydney market, there's a strong argument to suggest now is a good time to enter given we appear to be back on the long term rising trendline.
So I guess the second point is the one which picks up on your argument that timing is important. I agree and have learnt this the hard way from some of my previous resi IP investments. But having learnt that lesson I now include timing as a key criteria in my purchase decisions.
Some good points made by everyone. Thanks for the constructive contributions!!
Cheers,
Michael
You can't really use past trends to definitely prove that gains will continue at that rate in the future.
Prices are going to drop, take head of this you who are learning. Becareful not to be sucked into something you may regret.
Research hard, not just on real estate, but also on the general economy of Australia and our partners.
Prices are going to drop, take head of this you who are learning. Becareful not to be sucked into something you may regret.
Research hard, not just on real estate, but also on the general economy of Australia and our partners.
Hi all,
Neither should I, but what the hell.....
asdlellel,
That is actually true, you can't prove anything will happen in the future, just give it your best guess.
If you can't use past trends, what can you use???
Please asdlellel, give me something that is not based on past trends that would tell people when to buy??
bye
Neither should I, but what the hell.....
asdlellel,
That is actually true, you can't prove anything will happen in the future, just give it your best guess.
If you can't use past trends, what can you use???
Please asdlellel, give me something that is not based on past trends that would tell people when to buy??
bye
I know it was an obvious comment I made, but the way some people talk its as though a gain is a sure thing. Many are calling the 'bottom' now and the end of the recession etc etc. Maybe in the long run gains will come, but not necessarily in the next few years).
I am just urging caution among people who are new to home buying. If people keep trying to assure gains and that the bottom has been reached, along with that security of home ownership and pressure from others to buy, many less experienced and uninformed people may buy, but many of those people may well be hit hard by the things to come.
My comments are driven by the fact that some say the hard times are over, but I say the hard times are just beginning. Therefore caution is needed by many. I hope the more naive (spelling) don't get suckered into buying without some serious research and confience in their long term circumstances before buying. Stories are emerging now of people losing homes. There will be many more to come. That is a tough and very sad thing. I wouldn't wish that on anyone, who would? Therefore I share my view, even if its unpopular with many.
Of course trends can influence decisions at times. But saying that people are going to get a property doubling based upon the trends is obviously not always correct and I firmly believe is not correct at this time in history.
My beleif of a fall in property is not so strongly based upon past trends, but upon what is happening in the world in recent history and what is coming in the near future. This point in history, particularly economically, is more akin to 70 years ago than recent decades, but it is still unique and things are changing every week with the economy. Sure, I am not a prophet, but wise people would be smart to look at what is happening in the world and know that there circumstance can endure the things to come. As I may have said before, learn a bit about what people are saying is gonig to happen in economies in the years to come and how negative changes are going to affect them. Don't just listen to the guys who work at Soandso Realty or at some Realestate data blah blah blah.
I am new to this forum, but what I see largely in recent threads is a alot of people (not all) shouting about how now is the time to buy.
My main point is to get people to have great caution, don't let trends saying that prices will double in several to a dozen years influence your decision. Things are going to get much worse in the economy. I don't need to look back a few decades to work that out and if people think differently about that view, I would wonder what rock they have been living under.
Some very good posts here.
IMO even if property only doubled every 14 years, its still the best investment class because we all need a roof over our head and also because
1. It's a relatively safe investment,
2. it provides us with an appreciating Income while the loan depreciates,
3. we can claim losses and depreciation and reduce our taxable income
4. and the most important, we can access the equity and leverage to grow our portfolio or to invest in other asset classes.
Very powerful concept IMO
IMO even if property only doubled every 14 years, its still the best investment class because we all need a roof over our head and also because
1. It's a relatively safe investment,
2. it provides us with an appreciating Income while the loan depreciates,
3. we can claim losses and depreciation and reduce our taxable income
4. and the most important, we can access the equity and leverage to grow our portfolio or to invest in other asset classes.
Very powerful concept IMO
BV forgot, why it is a great investment class.
5. their is 650 people every day entering the community, adding to the population.
6. the shortage , and ever expanding red tape in construction , are pushing construction costs up every year. so their will be fewer built in the future.
7. i belive its time for the kids to be moving from mum and dads place, is about now as to the start of their own familys. this will only add to the accomadation shortage.
So its a safe bet that property will rise further more .
5. their is 650 people every day entering the community, adding to the population.
6. the shortage , and ever expanding red tape in construction , are pushing construction costs up every year. so their will be fewer built in the future.
7. i belive its time for the kids to be moving from mum and dads place, is about now as to the start of their own familys. this will only add to the accomadation shortage.
So its a safe bet that property will rise further more .
Hi all,
The problem I have with the D&G brigade is that history is bunk according to them, but the evidence they use is history, of a different time and with different actions by governments to what is happening now.
Apparently less relevant history, and only parts of it, is a better guide to the future than anything else. Sorry I just don't buy it.
Looking at the last 40 years, and longer if you read Jan Somers books, there has always been some where in Australia that was good to invest in property. For example, during the last recession 1990 is regarded as the top of the market for a few years, yet Brisbane had 40% growth over the next 4 years.
bye
The problem I have with the D&G brigade is that history is bunk according to them, but the evidence they use is history, of a different time and with different actions by governments to what is happening now.
Apparently less relevant history, and only parts of it, is a better guide to the future than anything else. Sorry I just don't buy it.
Looking at the last 40 years, and longer if you read Jan Somers books, there has always been some where in Australia that was good to invest in property. For example, during the last recession 1990 is regarded as the top of the market for a few years, yet Brisbane had 40% growth over the next 4 years.
bye
I wonder why the hardcore D&G'ers bother full stop (referring to newbies who preach from post one without any history - not regular members who contribute often and just happen to be down on property at this particular point in time).
They must have a huge sense of social responsibility to protect all the masses from buying property that may fall in price, and to criticize the people doing well from it.
Here's an idea, spend your time more productively on an area where you feel will enrich your life either financially or spiritually. Believe now is the time to invest in shares rather than property? Go to a shares forum. Don't have any interest in investment as the world is going to end and there are no good investments? Then find a needle point / dog walking / xBox / etc forum to contribute positively to.
I just can't fathom what a waste of life it is to spend time on a site of which you don't agree in the investment principle / major topic. It's like spending time on a cat lovers forum (do they exist?) explaining to all the members that cats are terrible pets and dogs are just so much better. What are you actually trying to achieve?
They must have a huge sense of social responsibility to protect all the masses from buying property that may fall in price, and to criticize the people doing well from it.
Here's an idea, spend your time more productively on an area where you feel will enrich your life either financially or spiritually. Believe now is the time to invest in shares rather than property? Go to a shares forum. Don't have any interest in investment as the world is going to end and there are no good investments? Then find a needle point / dog walking / xBox / etc forum to contribute positively to.
I just can't fathom what a waste of life it is to spend time on a site of which you don't agree in the investment principle / major topic. It's like spending time on a cat lovers forum (do they exist?) explaining to all the members that cats are terrible pets and dogs are just so much better. What are you actually trying to achieve?
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Thanks Jazz. I was very surprised at the 5year bit so I just had another look at the crude spreadsheet I did. I hadn't put in any commas so I did the calcs to $3 million.
Sadly I'm not a millionaire.
But it is still a real life, long term example for the discussion.
Regards.
All you need to do is find 6 or 7 average houses built 50 years ago, spread out around Aus - say; 1 per cap city - within say; 15 km's from the CBD.
Find another 6 normal houses in regional areas that were built 50 years ago.
Find out what each house cost to buy on completion back then, find out their values today, add 'em all up and then divide by the number of years.
That'll tell you what has actually happened.
OK stats heads; get to it.
Find another 6 normal houses in regional areas that were built 50 years ago.
Find out what each house cost to buy on completion back then, find out their values today, add 'em all up and then divide by the number of years.
That'll tell you what has actually happened.
OK stats heads; get to it.
This has always been my retort with these people; talk to us about your runs on the board, and then I'll take you seriously.
I enjoy peace and silence.
So when the economy falters further and property prices start to get realistic again (i.e. drop a lot), just blame it all, not on the Aussie economy, not on Wall St, not on everyones greeed to get rich or have everything they want instantly, just blame it on the D&Gers. . . .
This forum seems pretty unreal, just keep slapping each others backs while we all pretend everything will be fine and all our properties will keep gaining in value and if it all goes wrong, its because of some negative people talking things down.
Come on guys, so someone expresses and opinion that says the property and the money that is worshipped by so many is about to take a hit and you all get peeved by it.
Be real, if this is all about property and making money, some discussion on those things I mentioned is healthy and relevant.
Anyway, keep up your dreaming, nothing will ever go wrong and you will keep making lots of money
This forum seems pretty unreal, just keep slapping each others backs while we all pretend everything will be fine and all our properties will keep gaining in value and if it all goes wrong, its because of some negative people talking things down.
Come on guys, so someone expresses and opinion that says the property and the money that is worshipped by so many is about to take a hit and you all get peeved by it.
Be real, if this is all about property and making money, some discussion on those things I mentioned is healthy and relevant.
Anyway, keep up your dreaming, nothing will ever go wrong and you will keep making lots of money
Anyway, keep up your dreaming, nothing will ever go wrong and you will keep making lots of money
At least we have a target and a plan to get there.
What have you got other than hope that things will turn the way you like them?
Once thing is certain, inactivity won't change your life.
Take action my friend, it's the only way to get ahead in life.
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