Property doubles every 14 years, not every 7

[HiEquity]

Be real, if this is all about property and making money, some discussion on those things I mentioned is healthy and relevant.

You are absolutely right. Being a new member you may not appreciate how these topics have already been done to death and then some already on this forum. I suggest you search the back catalogue of the "Property Market Economics" forum to confirm this.

The more healthy and relevant discussions that have been missing from the forum of late relate to what strategies and steps investors are using to make money out of current market circumstances. It would be good if this balance could be redressed...

As my old boss used to say "Don't tell me how it can't be done, tell me how it can be done!".

And waiting around for the stars to align just means you're not doing anything...

 

[Bill.L]

Hi all,

asdlellel,

property prices start to get realistic again

Why do you think they are not realistic?? What is your evidence?? What do you base this on??

bye

 

[BayView]

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. . . .

No, we'll blame it on the factors that cause it like the factors that caused the US implosion. But we don't have the same factors ligning up like they did. I lived there when it happened and saw much of it.
As for the D&G'ers - as was stated - we don't blame them; we simply don't listen to them if they have no runs on the board.
Why?
Because it's like listening to a 6 year old child predicting the weather for the rest of the day - they have no experience at looking at the sky, looking at the radar, watching the wind and temp and the seasons, and haven't been through 2 thousand storms, heat waves, 40 odd summers and winters like we have. They look out the window, see a cloud and say it will rain today, and vice versa. That is their field of experience.

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.

We don't actually, and if you are not happy with us/it - you can always stop coming here....please - unless you can be constructive and back up your cracked record with some solutions. Just telling everyone to sell is not a solution.
That is the mentality of a trader.
If I'd sold every property I own when someone said the sky is falling over the last 20 odd years, I would not have got to this position we enjoy today. I wish I'd never sold any of them, but sometimes I had to due to cashflow factors, such as sell on PPoR to buy another, and too much neg gearing for the income at the time (operator error) - no other reason.

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.

We don't get peeved by someone saying "we need to be careful and here is how to keep safe", we get peeved by no runs on the board alarmists who think the world will end. I've never seen it happen. I've seen people lose lots of money from investing - all operator error.
The latest stock market crash that wiped out everyone - all operator error. Didn't cover their @rses properly, too much margin loan, didn't sell when they had the chance, the finance institutions who took on more exposed loans as investments, lent money to marginal borrowers to get more market share instead of sensible lending practices etc. The list is endless. Greed, carelessness, lack of (investing) education, laziness; are the dangers - not the investment.

I'm a property uber-bull, and even I have been saying for a few months that property will take a hit this year. But the "hit" I refer to is just a slow down for 12-18 months. Not a massive crash; it can't - we are under-supplied and there are more people hopping off the planes every day . Don't start me on that issue.
And, you talk like it's gunna be the whole market. It never has , never will be. This simply illustrates and accentuates your lack of experience. Having no experience is not a problem; most are here because we have little and need more, but most with no experience are smart enough to listen, learn, ask questions. They gradually offer advice and opinion as they go.

Be real, if this is all about property and making money, some discussion on those things I mentioned is healthy and relevant.

What else is it all about? You think we buy property just for something to do?
Yoyr version of D&G is just too extreme; we've heard it before, usually from the other forum, and most of those have no cattle under the hat. That's why we dismiss you.

Anyway, keep up your dreaming, nothing will ever go wrong and you will keep making lots of money

Thanks for the concern, but we are all big kids here. The newbs definitely need some guidance, but only from those who have been around the block a few times. Have you?

Come on A, give it a rest.

I've just realised I've wasted 15 mins typing this in your case.

 

[evand]

Most D&Gers are not anti property per se, they are anti buying investment property NOW. They beleive timing is the most important element of investing in property in a risk/reward sense. And now is not the time to buy as a fall is due. Thats it. They still love property investing.

Its a big difference and a lot of blue sky optimists on here continue to confuse the two.

Can anyone name a poster on here that is actually hard core anti property or anti profit?

Another point i'd like to make is there is nothing wrong with selling property (taking profit). As long as you do something constructive with the profit.

I have sold properties and used the propfit in a business and/or stockmarket and made multiple times more profit over the original amount. Beats the hell out of waiting for cap growth for very long periods.

Again, relating to my first sentence, the point is in the timing.

 

[Perp]

Most D&Gers are not anti property per se, they are anti buying investment property NOW. They beleive timing is the most important element of investing in property in a risk/reward sense. And now is not the time to buy as a fall is due. Thats it.

I would agree that the market is not strong now, and not likely to be strong for the next couple of years. But such arguments seem to rely on two flawed assumptions:

1) that market growth's the only or primary source of profit, and

2) that you can decide to buy into a particular deal at the time of your choosing.

If I find a property on the market today that can manufacture substantial growth, has substantial positive cashflow, or can be bought at a market price lower than market value (due to market distortions such as poor marketing, etc), then I don't have the option to say to the vendor "I'll come back in 12 months when the market's dropped and pay you 25% less". The property's on the market now. The likely market trend is just one factor of many that a prudent investor takes into consideration when deciding whether a deal is profitable. And based on that, you either decide to buy, or not.

As has been said many times, "I don't buy the market, I buy individual properties."

 

[craigb]

I am "so" missing something! i have not been looking at other states in regards to the market , and in our own little worlds we look at local markets and burbs we know, this being the case, the ACT market seems to be going off! and i could not see any reason that ozperp speaks of a slower market, either that or i have lost touch with prices in the ACT.
see for yourselves WWW.allhomes.com.au check out the amount of "offers" that are against the adds,????

 

[Francesco]

I am "so" missing something! i have not been looking at other states in regards to the market , and in our own little worlds we look at local markets and burbs we know, this being the case, the ACT market seems to be going off! and i could not see any reason that ozperp speaks of a slower market, either that or i have lost touch with prices in the ACT.
see for yourselves WWW.allhomes.com.au check out the amount of "offers" that are against the adds,????

The 'market' may be going no where, but as you say Canberra is doing alright generally for properties less than $0.5m. (It can be read as properties above $0.5m may not necessarily be doing as well.)

To give an example I just had a refinance and received about 9% more finance on the basis of fire sale valuation of the 4 properties involved. Of the 4 properties involved, 3 are in the ACT, one in Qld. Of the 3 in ACT it includes one that is valued $40k more than the neighboring townhouse property which was bought about 6 months ago.

No, I hasten to add that RE valuation does not always increase but the likelihood is that it will fare financially much better when compared one-to-one with a typical share (at least in my experience of nearly 30 years with RE). To recap for the uninitiated, these RE factors are in my favour: opportunity to enhance value (eg replace carpet, paint walls), negative gearing, increase rental, financial leverage (ROE), access to capital without resale (refinance), defer or negate CGT, huge demand (low vacancy), etc.

I hear and read about the perspectives of D&Gs but permit me (and others) to disagree with alarmist predictions of 40% across the board decline in RE values per Keen's thesis, or predictions of Oz to go down like UK, Japan or US (assuming somehow inevitability of capitalist economy or price/median income crude international comparisons). I will not reproduce the points of rebuttal already provided by many including Robertson of McQ, Christopher Joye, API, RBA and others in SS.

What makes D&Gs think that rehashing the same points will produce a different outcome on the forum (sometimes popping up anew under suspicious circumstances)? I hope the label D&G is not considered derogative but I think to start calling proponents/optimists as naive, simple or 'pollyanna' (as I was once called is over the top). It does begin to un-impress me that some D&Gs are just academic, sometimes armchair (as in lacking experience in financial performance as alluded by some) and in other times, plainly arrogant.

 

[Propertunity]

What makes D&Gs think that rehashing the same points will produce a different outcome on the forum

That brought a smile to my lips Francesco.

What do they say about the definition of insanity? "Doing the same thing over and over and expecting a different outcome".

 

[want2bewealthy]

As Mr Kiyosaki put it

'If tomorrow has not yet happened, whatever you say about it is technically a lie'

Like the pool guy said to me yesterday.

'The value of your home will double in 10 years time'
also 'this pool will instantly add whatever you pay for it to the value'

This may, or may not be a true statement, but tomorrow has not yet happened.

 

[steveadl]

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.

*sigh* yes of course, I keep forgetting - every property is going to drop right? No property will experience growth in the next couple years, so there's no point in discussing property in a positive light right? You really are an experienced investor aren't you?

Back to reading your newspaper reports.

Most D&Gers are not anti property per se, they are anti buying investment property NOW. They beleive timing is the most important element of investing in property in a risk/reward sense. And now is not the time to buy as a fall is due. Thats it. They still love property investing.

Disagree. If they still loved property investing, why not continue to research the market and find pockets/indivudual deals with good prospects? Or do you believe every property acts in unity as well Evan?

No, because they're not experienced enough to look ahead, or past the newspaper headlines and think outside the square. I suppose that block of land/subdivide and sell off for premium I saw couple months back didn't really happen right? Can't have, as there are no ways to make money off property at the moment right?

Now it's differnet if they were coming on here and saying they don't feel now is the right time for property, they prefer xyz investment instead. They're not, they're coming in (in quite ordered fashion by the way, one poster stops another comes in to take their place ), proclaiming how property is doomed and citing some lovely US website articles, not disclosing on how they are dealing with the current market and making money elsewhere, and wonder why people don't take them seriously anymore.

 

[evand]

Steve,

Usually people use massive generalisations to support their existing beleifs and in your post i'd say thats the case.

How can you say 'they' dont research and are not experienced enough to look ahead?

How does labelling someone a D&Ger mean they dont look outside the square?

Not everyone is into the rarely implementable 'creative property' techniques they teach at seminars for $5000.00

Also, i'm sure a lot of property D&Gers are busy making money elsewhere and dont have the time/inclination to delve into so called these 'creative property' techniques.

I know you have limited exsperience in property but you're really not doing your self any favors with this stuff mate.

Francesco,

If you think D&Gers sound like an ongoing cracked record, maybe you should read a few more of the deluded optimists/pollynannas posts.

 

[jazzlobber]

*sigh* yes of course, I keep forgetting - every property is going to drop right? No property will experience growth in the next couple years, so there's no point in discussing property in a positive light right? You really are an experienced investor aren't you?

Back to reading your newspaper reports.



Disagree. If they still loved property investing, why not continue to research the market and find pockets/indivudual deals with good prospects? Or do you believe every property acts in unity as well Evan?

No, because they're not experienced enough to look ahead, or past the newspaper headlines and think outside the square. I suppose that block of land/subdivide and sell off for premium I saw couple months back didn't really happen right? Can't have, as there are no ways to make money off property at the moment right?

Now it's differnet if they were coming on here and saying they don't feel now is the right time for property, they prefer xyz investment instead. They're not, they're coming in (in quite ordered fashion by the way, one poster stops another comes in to take their place ), proclaiming how property is doomed and citing some lovely US website articles, not disclosing on how they are dealing with the current market and making money elsewhere, and wonder why people don't take them seriously anymore.

dude, i've been on this site about 4 years now at this point, have invested in the past, have the funds (equity - LOC) ready to invest again, but i'm not going to, i would rather put any cash into the stock market at the moment, i think this is the best place for growth in the next 2-5 years.

i'm not a D&G, but in my opinion the market in Melbourne is not good buying at the moment for my budget (<500K) for IP, i believe once the fhb boost finishes the fhb section of the market will come back a bit but i believe <500K market in melbourne may show small drops but will be stagnant for at least another 2 years with only small growth for another 1 or 2.

Of course i could be wrong, but my desired IP type is as close as possible to CBD with land as the majority component of value. The yields in general are poor and i dont want to be burning cash for the next 3 years.

I'm not saying there aren't good deals out there, but as a stock buy and rent em strategy, i'm sure as heck not finding or seeing them at the moment.

 

[steveadl]

Steve,

Usually people use massive generalisations to support their existing beleifs and in your post i'd say thats the case.

How can you say 'they' dont research and are not experienced enough to look ahead?

I call them inexperienced because they continually refer to the property market as one big beast that will only have one direction. And you pretty much do the same now mate.

I'm a property bull yes, but do you hear me preaching from the rooftops that 'the D&G'ers are wrong, all property is in for a 10% hike in the next 12 months.'???

No, it's massive sweeping statments like this - positive or nrgative that I disagree with. And for someone to believe that indeed every property is going to decline and there are no good investments, does show to me inexperience.

You've been down on property for a couple years now Ev - you don't think if you looked hard you couldn't have found some good deals in that entire time? Now I'm not questioning your choice of not purchasing - I'm not planning on purchasing at the moment either - but I disagree with D&G'ers shouting that ALL property is due for a collapse and anyone holding or looking to buy property in the current climate is going so see money evaporate.

dude, i've been on this site about 4 years now at this point, have invested in the past, have the funds (equity - LOC) ready to invest again, but i'm not going to, i would rather put any cash into the stock market at the moment, i think this is the best place for growth in the next 2-5 years.

Jazz, I'm exactly the same as you currently. I'm investing in the ASX and don't plan to buy anymore property for the next year or two at least.

This does not mean I believe that it's impossible to find good property deals in the current climate. Which again is why I get annoyed with mass generalisations that 'property' full stop is not a good investment at the moment. Or that the property market is in for a 20% fall.

 

[MichaelW]

dude, i've been on this site about 4 years now at this point, have invested in the past, have the funds (equity - LOC) ready to invest again, but i'm not going to, i would rather put any cash into the stock market at the moment, i think this is the best place for growth in the next 2-5 years.

I'm not saying there aren't good deals out there, but as a stock buy and rent em strategy, i'm sure as heck not finding or seeing them at the moment.

Hi Jazzlobber,

Which is a perfectly valid strategy! You're basically just trading off between asset classes and investing where you think you'll do best at the moment. Informed research determining a strategy that you're acting on. Good stuff!!

My investment timeframe is very long term, and I prefer the leverage I can get with property so my strategy is different. As I've already shown, even assuming modest capital growth rates and current yields, property investing in Sydney looks like being very profitable from this point onwards.

I don't buy the argument that current prices are massively overvalued and set to crash. I don't buy it, period. Everything I've read suggests affordability is back to pre-90's boom levels, and as stated in the first post in this thread, Sydney median's are back to their long term conservative average. We're moving into a recession, not a depression, and we've been there / done that in the last 80 years more than once and that's the indicative historical perspective applied to the analysis of price performance.

I won't address the points raised by Asdlellel because they've been done to death elsewhere and add nothing new to this forum. Others have already done so anyway. The point is, there's a difference between your informed investing strategy and the ill formed arguments of a newbie gloomer. They're entitled to their opinions and I respect them for that, just wish they'd use the search button before throwing it all at the forum again.

Sydney could come off another 10% in price over the next couple of years but that's no big deal. If that's happening then interest rates are likely staying low and making servicability a dodder. I don't have a crystal ball so can't say which way they'll go over such a short timeframe. In my opinion, there's just as much chance they'll rise 10% in the next two years as fall. Either way, over the long term and given the impact of inflation, these tangible assets with a good yield at today's prices represent good buying.

What you get:

* Fixed asset wich you can touch, feel, sell, improve, depreciate.
* Good 5% odd yield which grows in line with inflation or better.
* Rising capital values in line with inflation or better.
* Increasing demand due to increasing population.
* Low Supply due to prohibitive costs.
* Investor and Comsumption (home owner) interest increasing demand.
* Risk of high inflation due to increased money supply / quant easing.
* Fixed value loan locked at the purchase price. (Not fixed rate, just fixed valuation). So debt depreciates in real terms over time given inflation.
* Potential to fix rate on the loan and lock your interest obligations down. SANF.

That's a good enough proposition for me. I've done MY analysis and I like what I see. As I said earlier: Sydney anyone? I'm in...

Cheers,
Michael

 

[Francesco]

Steve,

...

Francesco,

If you think D&Gers sound like an ongoing cracked record, maybe you should read a few more of the deluded optimists/pollynannas posts.

Hi Evand

I am a RE and share investor and my posts have always been consistent in that I do not make myself out to be something I am not.

The optimists/pollyannas you labelled as deluded have a right to share their RE experiences on this forum. They do not sound like a cracked record, especially when forumers asked them to keep them posted with their experience. Forumers do wish to follow and emulate successes. Some of these experiences are out of my league and I am happy to stay with my course after all there are all sorts of strategies for all sorts of personalities.

What is out of place is the way allegedly new D&G forumers pop up and often hijack threads on RE with repeats of their D&G points, not contributing new points and most often than not they have been treated with respect and their issues discussed at length. Time is precious to waste on sieving in vain for new contributions, instead to find rehash. Because of the constant replays by D&Gs and a pattern of not dissimilar postings, their motives and agendas are suspect on the forum.

By the way I respect your views about timing entry/exit and if it works for you then good for you.

Cheers

F

 

[want2bewealthy]

I say we should have D&G demerit points.

I'm really sick of hearing it too, so much so that it has caused many SS greats to leave and I'm finding it difficult to focus on whats going on.

I find that I'm more positive, and create all my good ideas and money making schemes without the hustle and bustle of immature investors getting in the way, I really cringe when others challenge proven strategies and I just cannot see why anyone would bother to do so unless they do not believe they can execute the bridge to financial freedom themselves so feel obliged to mock those who are.

Whingers should receive the boot.

Hang on, I've been whinging about whingers...

 

[sparky23]

Guess thats you booted then!

 

[Trogdor]

I say we should have D&G demerit points.

I'm really sick of hearing it too, so much so that it has caused many SS greats to leave and I'm finding it difficult to focus on whats going on.

I find that I'm more positive, and create all my good ideas and money making schemes without the hustle and bustle of immature investors getting in the way, I really cringe when others challenge proven strategies and I just cannot see why anyone would bother to do so unless they do not believe they can execute the bridge to financial freedom themselves so feel obliged to mock those who are.

Whingers should receive the boot.

Hang on, I've been whinging about whingers...

Wow.. Thats why this site has gone to the dogs.

W2BW, I do admire your spirit and drive, but seriously, this is a forum. For people with different view points and experiences. To share.

Sounds like you should record a ra-ra-ra investing rant on tape and just sit and listen to it by yourself ad nauseam. Why bother coming here to listen to alternate viewpoints?

I figure from your posts Im around your age - but I'm keen to hear the experiences from all those posters around me.

Agreed, some are crazy lefties who basically advocate communism (i.e. read some of Keen's stuff and you'll see). But most of the 'negative' types on here have the benefit of experience (years yes, not necessarily $$ but often this too) we dont have. Im eager to hear how people went wrong in the 1970's, 1980s, 1990s, etc.. as it may save me making a mistake. Even if it doesnt, I still find it fascinating. Many people's 'negativity' stems from these experiences and Im keen to hear them.

Anyway W2BW like many others I appreciate your contributions to this site, but from what I can see you're in your late 20's, you've bought a few resi IPs on high LVRs in the last few years, and would be lucky to have a few hundred K to 1/2 a mil or so of equity. No better or worse order of magnitude of most keen investors of our age. In fact, I'd say you're also an "immature investor" to use your words (as would be most people our age).

You've done a decent job to date, but I'd just as much rather hear the 'negativity' of somebody a decade older who's been around the traps for 15 years. Whos got a few mil of equity under the belt. Or who doesnt and has made a few mistakes along the way and has some tales of regret, even if they are 'negative'. Or even the thoughts of average punters.

 

[want2bewealthy]

Thanks for the 'kind' words guys..
This is exactly what I'm talking about,

I have said in the past, that I only take advice to a certain few investors on this Forum who I think are worth their weight in gold, I generally don't bother with the rest, you learn who to take notice of over time.

I'll leave y'all to it, enjoy!

 

[BayView]

I say we should have D&G demerit points.

I'm really sick of hearing it too, so much so that it has caused many SS greats to leave and I'm finding it difficult to focus on whats going on.

I find that I'm more positive, and create all my good ideas and money making schemes without the hustle and bustle of immature investors getting in the way, I really cringe when others challenge proven strategies and I just cannot see why anyone would bother to do so unless they do not believe they can execute the bridge to financial freedom themselves so feel obliged to mock those who are.

Whingers should receive the boot.

Hang on, I've been whinging about whingers...

As much as the fanatical D&Ger's are a nuisance, I think it is good to have alternative views here. The Dark Side forum are fanantics, mostly - I'd say. You'ds have to be; how else could you stand to be involved in those discussions in a "quantity" basis otherwise? So depressing.

Hearing rose-coloured glasses stuff all the time will lull everyone into a false sense of security and make them lazy, or inattentive, sloppy etc. Dangerous.

To get the whole picture you need to know all the lumps and bumps as well as the good.

Mostly, I ignore the sky is falling stuff - especially if it is not backed up with any factual content and/or experience by the poster. It's good to sink the boots into them for fun once in a while though. Boy; they're persistent though.

I don't care what their zeros on the bottom line is, because sometimes people can be in it and still don't make money out of this caper.

As long as they are, and/or have been; a participant in property transactions for a while.