The RBA says you're probably better off renting..
- Thread starter oracle
- Start date
Just need to open rensw or reiv website, look at median house price chart, and you'll find this 10 year rule is an understatement.
The answer is 75%.
Value in 1987
Today?s Value
Compound return % p.a.
Porsche 928
$210,000
$18,000
-9.0%
2 Sydney houses incl. rent
$210,000
$2,445,000
9.9%
BHP shares
$210,000
$6,050,000
13.8%
NAB shares
$210,000
$5,040,000
13.0%
Seems to me the only person who really lost was the one who bought the car (maybe because he was renting
)
The argument about rent/buy for the intelligent asset accumulation person is much more grey
Today?s Value
Compound return % p.a.
Porsche 928
$210,000
$18,000
-9.0%
2 Sydney houses incl. rent
$210,000
$2,445,000
9.9%
BHP shares
$210,000
$6,050,000
13.8%
NAB shares
$210,000
$5,040,000
13.0%
Seems to me the only person who really lost was the one who bought the car (maybe because he was renting
)The argument about rent/buy for the intelligent asset accumulation person is much more grey
come on mate you are not that silly STW??????.
You want a small cap to represent the mum and dad portfolio.
In regards to VAS it hasn't been around so long.
Hence why people used NAB (which actually has been a long term underperformer relative to other banks) and BHP.
For STW refer Australian shares, ASX 200 accum index. This is based on all divis reinvested via DRP. Page three of attachment, its a pretty good chart.
10k 1984
278k 2014
Now ETFs were not traded on the ASX way back then, and the first genuine index fund (afaik) didn't open in Oz until 1998 (Vanguard Australian shares) but index funds are index funds, and would have performed very similarly to the accumulation index with DRP box ticked. Bogle's Common sense on mutual funds is worth a read.
10k 1984
278k 2014
Now ETFs were not traded on the ASX way back then, and the first genuine index fund (afaik) didn't open in Oz until 1998 (Vanguard Australian shares) but index funds are index funds, and would have performed very similarly to the accumulation index with DRP box ticked. Bogle's Common sense on mutual funds is worth a read.
Few issues here
The share buffs are comparing property returns against 'blue chip' aussie stocks
Yep bhp and the banks smashed it
What about all the other shares in the portfolio that didn't stack up? Every property bought $25 years ago has had good return - no matter where the location
Leverage? Stuff all people will ever leverage shares
Rent- all the share buffs still have to pay rent, which goes up all the time. All the property gurus don't have a mortgage any more
The share buffs are comparing property returns against 'blue chip' aussie stocks
Yep bhp and the banks smashed it
What about all the other shares in the portfolio that didn't stack up? Every property bought $25 years ago has had good return - no matter where the location
Leverage? Stuff all people will ever leverage shares
Rent- all the share buffs still have to pay rent, which goes up all the time. All the property gurus don't have a mortgage any more
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1984 is a good start date. Nearly all of these charts have this start date issue. They like to avoid the ten years of the seventies when the markets oscillated sideways and the recession of early 1980's. The returns drop significantly when you look at periods like that. There have been similar sideways non productive periods through time. One could say that the 1984 to 2008 chart is an exceptional period in share market history rather than predictive.
Property markets from 1970 to 1982 were booming in comparison. Sydney house prices went from $18700 to $81425 in the same period. Source
http://www.econ.mq.edu.au/Econ_docs/research_papers2/2004_research_papers/Abelson_9_04.pdf
Given we do not live forever, when we start the investing and the market returns in that period, will definitely affect our overall return.
Uhhh ...BHP ? .....smashed it ? Have you seen a 5 year chart of BHP?
5 years ago BHP was around 38 bucks.
Price now is ... drum roll .....BHP is around 38 bucks.
LL
Maybe silly in other ways
My point was your input re: VAS & STW,as brought up by the op.
As the other person has a vested interest.
Why is that not surprising...
Thanks again LL.
Seems to me the only person who really lost was the one who bought the car (maybe because he was renting
Maybe financially - but a porsche should just about complete every aspect of life
After attending today's auctions, all I can say is, if you sold your house two months ago and rented, you are in trouble. Lots of trouble.
Why is that Deltaberry?
"On average" should also be added to that statement.Noice MTR,considering the spruiks say props double every 10yrs
My mate owns a house in Black Rock; paid $500k in circa 1998. It would be worth about $1.8m now.
Call it $1.5m in case I'm exaggerating.
And, there's the depreciation deductions for property - which increase the returns numbers..
Depreciation has to be paid back on sale.
The market in Melbourne has ran very hard these two weeks. Not picked up by the media yet, but this is consistent in areas I look and also consistent with areas I don't look my my friends do.
Ridiculous uplifts not seen since the early 2000s.
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