Sí, es tristemente verdad que soy estúpido.

That aside, my post was a light-hearted parody of Hutch's earlier post. I even put in two smileys! As for public displays of contempt, I assure you, you have never featured in discussions on the house price crash forum. Others may have.

I clearly lacked tact when I pointed out the other day that constructing additional rooms on your house without a permit was a 'no-no'. I apologise.

Cheers, F. [cowboy2]

Yes, Foundation! It's at the top of every post. The foundations are the most important part of a building….
Except for the building permit!

Cheers, F. [cowboy2]

Typo? Matho?

$70k x 7 = $490k = $721pw Interest @ 7.65%

A couple on $70k per year would surely only be looking to take a loan of $210k to $250k max?

Why? The PM (John Howard) says that house prices will jump 3% if Labor (note:no u) are elected.

Hi Free man,

I'm just wondering why you think there is an undersupply of homes being built? Did you arrive at this conclusion based on your assessment of all available evidence or did you read it in the news? And if you read it in the news, did you check that the source didn't have a vested interest in convincing the public that there was an undersupply?

I've looked at the stats and come up with the opposite conclusion. I asked the question "does the net household formation rate exceed the building of new dwellings?"

The recent census results certainly don't show any undersupply. To recap the relevant ones:

• Average household size unchanged at 2.6% for both 2001 and 2006 census
• Vacant dwellings markedly increased from 717,877 (9.2% of all dwellings) in 2001 to 830,376 (9.9%) in 2006

Source: 2006 Census QuickStats : Australia

The first statistic shows clearly that the rate of construction has at least matched the rate of household formation. The second shows that the rate of construction has in fact exceeded the rate of household formation. Not only is there no undersupply, there is an oversupply based on fundamental measures.

It also shows that the 'immigration causes higher house prices' argument which resonates so well with the public is a furphy.
It also shows that the 'State government are undersupplying land' argument is a furphy.

Cheers, F. [cowboy2]

This is also the only true way to 'lock in the value' or 'withdraw equity' without exposing oneself to the possibility of unattainable valuations which can become very problematic in future. I've posted examples of this before (people unable to sell their house/unit for the price they 'need' having borrowed against it).

Personally, I'd prefer to own $500,000 of unencumbered property assets than $6,000,000 of assets with $5,000,000 of debt. If house prices do double every 7 to 10 years (I don't expect them to), why would I need $6 mill of assets anyway? My $0.5 mill will return $500k over period one, $1 million over period 2, $2 million over period 3… and by that time I'll be retiring in extreme luxury. If the capital gain is lower than this, I'll retire with less luxury, but I'd suggest more than I would have if I was trying to carry many millions of dollars worth of debt…

Depends on your definition of inflation Xenia. The Austrian school of economic thought would tell you that inflation is expansion of the money supply (which devalues the unit of currency). Broad money is growing in excess of 14% per year…

If you prefer to measure inflation by looking at prices, the CPI is just one way of doing so. You could look at true household costs which are growing much faster (more weight to food, fuel, housing, bills, less weight to imported Chinese pap) than CPI. Or you could look at house price inflation…

It doesn't matter how you look at it, inflation is always a monetary phenomenon. You can measure it by various means, but what you're really asking is "how much has the purchasing power of the dollar declined"?

Cheers, F.

Aurelius wrote:

crashy wrote:

mahahaha "more or less finished" I remember people saying that in 2001. What downturns are you referring to? I wouldnt worry about trying to predict future opportunities until you have a handle on current ones

However, the link below your post point to a page that states

"PROPERTY? BAH!
The property run is over. Property is expensive and rental yields are low. "

what the? Did I miss something?

The question has been asked before, and this was the answer:

http://www.number.com.au/forum/viewtopic.php?p=2816&sid=fd207ab67eb88e7d96d2c5f308ee8d44

But naturally, the $590 worth of training (a staggering 57,000 words on 155 A4 pages!!! Hmmm, I've written more than that in the last 4 weeks…) is still available… for those who want to find out what they should be doing four years ago!!!

Also noteworthy, the phrase "if you were a Financial Advisor with any credibility…….would you be recommending property or shares?"

Surely you've not been making such recommendations? I notice you were careful to write "This course provides educational materal only. No specific investment advice is ever given, nor should it ever be taken as such" on the website…

So that would make it a "guideline" rather than a "rule"?

I'm curious, does anybody have a credible explanation of why the 11 second rule used to work but now doesn't?

Just a very basic question first, if the caveat existed before you bought the property, were you aware of it? Did your solicitor inform you of it and its implication?

Cheers, F. [cowboy2]