Forum Replies Created
“and the latest BIS forecast is 9% in late ’06”
I suspect that they are realising they were well off the mark and are slowly bringing it back.
http://www.megainvestments.com.auJohn Carroll
BIS Shrapnel and Marvin the Depressed Robot have a disturbing likeness.
Good to see that even in the depths of their depression they did comment that once their projected mayhem of the next year or so has cleared the residential property market “would be strong coming into the next decade, Dr Gelber said.”
F and David – are you backing the 10% forecast interest rates? There really will be blood on the streets in this event.
http://www.megainvestments.com.auJohn Carroll
agree with the logic Greg, but 145000kms is some serious mileage! I would be concerned about how many more km’s I would get for my $16,500.
http://www.megainvestments.com.auJohn Carroll
“Property PE’s compared to the sharemarket are crazyly high.”
what makes you say that? I would like to buy some shares but at their current prices they are just too expensive. I would expect the inevitable share market correction to prop up real estate values
http://www.megainvestments.com.auJohn Carroll
these guys have been out on a limb for quite some time. they have a vested interest into talking up their forecasts to prove their credibility. see http://www.smh.com.au/articles/2003/08/25/1061663735507.html?from=storyrhs
the projected interest rates of 10% still seem extreme and we are only 6 months away from 2006.
http://www.megainvestments.com.auJohn Carroll
I was reading this morning that in the event the Yuan is revalued, the AUD is likely to rise in sympathy with other asian currencies against the USD. Others believe our economy is built on a house of cards (read some of the postings by dmichie) and we are set for a fall. either way, the market is driven largely by sentiment and will be afected by events that you can’t possibly predict and it is extremely risky to bet on it IMO.
http://www.megainvestments.com.auJohn Carroll
no breaking news or anything, just commenting that in a 2 line summary you have completely shot down the philosophy of his company (i.e. buy 10 of their properties, watch them double every 7 years, redraw equity and live happily ever after)
http://www.megainvestments.com.auJohn Carroll
so if I am an idiot and pay $350k does that set the true value as well?
http://www.megainvestments.com.auJohn Carroll
the biggest thing about property is its illiquid nature. you need cashflow to fund it and never underestimate the importance of that. Selling property in a hurry is like being a lamb to the slaughter (and the banks will be the first ones to load you onto the truck!)
http://www.megainvestments.com.auJohn Carroll
I would be happier if they renamed themselves “IC Real Estate” or “IC Property Marketing” as at least people would know what they are dealing with. I often speak to people that think that the IC is a non profit organisation! (in fact I have even had a Support Memebr tell me that and I think they believed it)
http://www.megainvestments.com.auJohn Carroll
you could always hedge it of course.
I remember about 10 years ago back in the UK, everyone thought it was a great idea to set their mortgages up in continental currencies with low rates. then the currency moved against them and they lost their house with all the ramifications that followed…
http://www.megainvestments.com.auJohn Carroll
in summary though, the answer is no.
for all tax questions, my attitude is just assume the worst. Whenever I think I can see a loop hole, it has inevitably been spotted by much cleverer people many moons ago and well and truly shut by our good friends at the ATO!
http://www.megainvestments.com.auJohn Carroll
when the market is running as hot as it is now you can’t afford to get your finance approval first, in fact in any market iti is risky if you realy want the property… just secure the deal then try your best to get finance. The agent needs to work in the interests of the vendor and – hopefully – did what they felt was right at the time. Whilst working in suburban real estate as a REA I too have had red hot verbal offers from keen buyers to buy property one day, then the next their circumstances mysteriously change. It’s crushing and teaches you one thing: unless it’s on paper it really is all just banter.
http://www.megainvestments.com.auJohn Carroll
but the reason it was introduced was to capture this income – so why the heck cut it back?! either it should be taxed or it shouldn’t. as for encouraging investing etc… cut my income tax rate to nil and I will invest for retirment!
http://www.megainvestments.com.auJohn Carroll
it’s a fair call Kay – the promotion of the Karratha properties was written up when the price was looking closer to $350k. of course it all comes down to gearing but when you run all the numbers thru a calculator, $650/wk on $425k will be negative unless you put in a lot of equity. Unfortunately I can’t control the market and prices, like everywhere, are racing ahead. I have seen a well known marketing company promoting $250 a week on $250k as CF+ and shaken my head… in the interests of not wanting to be a misleading promoter of such material I shall follow their lead and relabel it as ‘high cash flow’ !
http://www.megainvestments.com.auJohn Carroll
the CGT discount distorts the market. my sister just wrote a research paper on this very topic actually. abolishing it after 15 years would just be another gravy train for a few.
when you consider that CGT was brought in to create equity of taxation between all income classes, it woul dbe a mockery to turn around and say that the guy who has held a property for 15 years no longer needs to pay tax, yet the poor old PAYG employye gets slugged week in week out.
http://www.megainvestments.com.auJohn Carroll
already done….
still can’t figure out how they get away with being called a ‘club’ as it really is quite deceptive. There must be a clever structure in place as I know all sorts of government departments have been thru them. The only thing they could ping them for was the ‘no tenant no problem’ guarantee which I think was a breach of the TPA or something like that.
