[8D]Hey All,
I have been very quiet of late as I have been very busy. I wanted to ask one question though about what people believe this year will bring in an economic sense. Where will house prices go ?? Where will the sharemarket go ??
Let’s hear the thoughts of the group……[8D]Enjoy
AD [:0)]
(Andrew)It is good to have an end to journey toward, but it is the journey that matters in the end.
G’day AD,
Hope the clan and the empire are all well in the New Year.
Without offering any sound reasoning due to a lack of time, I think house prices will still go up in Qld, but not at a stratospheric rate…
I reckon they’ll level off and possibly drop marginally in places like Melb and Syd. I, like many others, would expect inner city apartments to drop off significantly.
I think some highly – geared investors will panic with a couple more rate rises and look to off load… but I don’t know if that will bring back prices to cf+ status or not… perhaps in some areas it will. I’ll still be looking to buy in regional centres.
It’s also going to be an election year, so I would be expecting the government to take a very hands-on approach to the economy in terms of making public statements against rate rises etc.
I think the sharemarket will perform pretty well.
Overall, the Aussie economy is goign pretty well in terms of lots of its key indicators, but the spectre of interest rates is what could bring a lot of people, and the govt, unravelled.
By the way, I’m no expert on economic matters…
Cheers
rAre we allowed to talk about shares for this one moment???? or does it just have to be property?
cheers,
s.i.sHi SIS
I wouldn’t refer to specific shares… in a discussion about where the economy’s headed in 2004, a few general comments about the sharemarket overall would be pertinent I would have thought…
I’m sure if Steve thinks otherwise, this thread will be locked or deleted soon enough [
].r
Alrightie, very brief and lightly im going to touch this subject….
maybe a good time to be buying shares in the health care system, reason being is that election time is coming soon and with so many baby boomers and the definitive off many more older australians getting sick and dying each year, shows that there will be an increase in and governmetn subsidy of the Health Care System.
The Aussie Dollar looking Much Stronger… Looks definite to rise further more and stay strong. Surprising to see Gold go up and over $400 and that Oil Prices will drop, in effect ensuring that petrol prices will drop… due to the fact Saddam Hussen Capture and Iraqs petrol shipping will be controlled and regulated… thus meaning cheaper petrol.
Another 35 days to hear the results from the RBA, of interest rate rise, in no doubt i see it rising another .25% causing housing affordability to rise and further knock out first home buyers again.
And for the property sector…. definitly and much increasing chance from now and before school staring, for many inner city units and apartments to drop in rental and compete for what demands the rental market will bring. Maybe a better time to be investing in -ve geared properties, just before the market picks up again…..cant say when and not sure when.
Looks for this Summer Very Hot
cheers,
s.i.sHi SIS
heard on the radio this morning Aussie dollar is tipped to go over 80 cents by middle of year… best performing currency in the world at the moment against the greenback. When I was in the US a couple of years ago it was around 58 cents. Yuk.
Cheers
rRichmond wrote: ‘heard on the radio this morning Aussie dollar is tipped to go over 80 cents by middle of year’
I hope it doesn’t. My IPs are in regional areas dependent on export income. A higher $AU dollar means less cash flowing in
In contrast, consumers in the city get cheaper imports, which may mean that subsequent interest rate hikes will not dampen down consumer spending or lower our trade deficit.
Regards, Peter
I agree with Richmond,
I think Melb and Syd will certainly slow (they probably have already). Some sectors (the inner city hig rise apartments) will certainly drop. QLD still seems to have a bit left in it but a change of sentiment (which seems to be what the general media is pushing) will probably see that slow as well. The regional areas will probably slow (and possibly retreat slightly) as well. If all of the metropolitan areas slow then they must as well. Much of the regions have been playing catchup the last couple of years.
Sharemarket should be a good place to be, especially with the change in sentiment unless there’s some major international incident to knodk it again.
Rod.
Property:
No bargains for a couple of years yet. It will take time for financial pain to set in for those overcommitted.
Sharemarket:
Be bloody careful if you are looking long term. Be very very selective. P/E multiples are still way too high overall….in other words not too many bargains to be found…but there are some…do your research[
]Trading is a whole ‘nuther story and I suspect will be rather good![
][]Wayne
Hi again,
Hope this doesn’t break the rules, but is general in nature:
As most here who are interested in the sharemarket are investors as opposed to traders, here is a handy growth value indicator.
It identifies prospects as a starting point for further research:
((EPS + DPS) / CSP x 100) + ((EPS – DPS) / NTA x 100)
EPS= earnings per share
DPS= dividends per share
CSP= current share price
NTA= net tangible assets“Suggested Levels:
>30 Special Buy
24 – 30 Optimal Buy
20 – 24 Accumulate
17 – 20 Hold
12 – 17 Look for better investment
<12 Do not consider
Assuming all other factors are constant, a doubling in earnings per share will roughly double the stock’s CGVI.
If a company increases the percentage of earnings paid out as dividends, it will reduce it’s CGVI if the stock is selling above book value. Increased dividends help when the stock is selling below book value.One point to take note of, as the formula relies on past data, it assumes that the company will be able to continue to generate the same return in the future. For larger companies, in the later stages of growth, that will often be a problem. Due to this weakness, the formula works best with small and medium sized companies, where the potential for continued profitable growth is greater.”
Acknowledgements http://www.sharesguru.com
Cheers
WayneMy personal thought’s for 2004:
Expect some good growth for some of Australia’s larger companies, they will of course be hampered by our rising dollar.
Shares will be the ‘Darling’ of the year, this is starting to happen already ( remember the old Coloured wheel with property/shares etc the wheels turning)
Superannuation will start to make forward moves again-the pressures on
House prices will start to level… but as alway’s there will be some pockets that will increase! some of the larger companies( in WA at least ) have projects nearing implementation and will surely increase pricing in thier respective areas..
I too expect another interest rate rise S.I.S ,the economy ‘is’ moving forward and people are ‘spending’ have a look at Christmas and the fact some stores had a Bumper month.
I have lot’s of Questions but “not” the answers… If someone know’s ‘which’ stocks are going to skyrocket, where the next ‘boom’ suburb is going to be, and what the lotto numbers are going to be on the next Superdraw “Please” let me know
REDWING
Hi Redwing,
In response to your question in another thread, married life is going well, while I find it funny that as soon as I tell someone I work in telly, they automatically assume big bucks… I can assure you it ain’t the case [}
]!!!Why do you think I’m here trying to shore up the future??? []In regards to Christmas spending, I wonder how much of that money was actually savings, and how much went onto already over-stretched credit cards? How many would have dipped into their LOC against their house etc? I’m suspecting PLENTY!!
Heard some more doom and gloom predictions on the radio this morning about property if interest rates go up another couple of percent (bloody media [
])… it’ll be interesting, because there’s obviously some people who have borrowed up to the hilt to get into the first home buyers market… mind you, too many aren’t satisfied with starting small, they want a 400-450k place right off the bat and borrow as much as they can… it’s those ones (and I know many of them) who are going to be hurting…Cheers
rHi
Where to next year. They say shares are the way ahead, but I have been burnt a few too many times.
I think next year will be a year of consolidating the gains that property has made over the past 3-5 years. Yes, we may see a few % decreases in property values. We may also see some interest rate rises over the next 12 months but this should hopefully result in some rent increases or at least see more of a balance in the rental market.
Just my thoughts.
Cheers
Andrew
Any investor who purchases a rental property in the inner city here in Sydney is braver than me
Spider
I like to think about what drove the last property boom. I tend to think it was a combination of:
– poor share market performance
– ergo, poor super fund performance
– S11 and Iraqi tension made investment closer to home more attractive, and share markets potentially more volatile.
– low interest rates.
– comparative value of IPs to poor share market.
– growing disgruntlement with bank cash rates and service.
– confidence in Aussie economy.
– around 10-15 years of poor growth in property, at least around SE Qld.
– growing pent up first home buyer demand in selected areas.
– net population increase, some areas more than others.
– relaxed home lending practices and more competition.Against all this, I think Syd/Mel might average 5-10% for the next 2 years, SE Qld and other metros 15-20%.
Factors limiting growth are:
-wages have not gone up to allow the market to afford higher RPTs.
-IP returns and growth are not attractive now.
– interest rates are historically around 10%, and I expect they will climb slowly to 8-9% in the next 2-3 yrs.Personally, I’d like to see more capital invested in smart business, especially of an export nature. (Smart business however could include building dwellings more cheaply and efficiently, to free capital for other stuff.) Maybe the media will cotton onto that soon. THe US media does a much better job than the socialist leaning ABC and the token efforts of the commercial stations.
Bruce
Mooloolaba, Qld“The socialist leaning ABC?” That’s too funny, Bruce :o))
As to my hit predictions… regional/country areas of property will continue to be the cheapest in Australia, but the most affordable for those of us with not much capital- but they will be the most risky with interest rate rises, less spending, and possible industry declines- same old same old for cheap housing; wraps will see many go broke, and the industry regulated by policy- not self-regulated; those who got in over their heads will be duly ripped off by those who specialise in milking the vulnerable; stamp duty will be reduced by public demand- leaving less money for state govts to invest in public schools and the health system.. etc etc :o)
Happy leap year everyone!
kay henry
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