Forum Replies Created
- Originally posted by wayneL:
Great link Foundation.
This caught my eye.
“Real housing prices will fall by a total of 47 percent…the housing boom of the past twenty years will more than reverse itself in the next twenty.
Even if the fall in housing prices is only one half of what our equation predicts, it will likely be one of the major economic events of the next two decades.”Whoa!!!
Bear in mind this (admittedly incredibly bearish) scenario would not necessarily require a house price crash. 20 years of 3.45% inflation would have the same effect on static nominal house prices!
Originally posted by superman:Wow look at page 13, “Sydney House Prices” they did exactly what i said, a straight line up until 1990!!
:D:D hehehe I’m happy about that that was independant thought [blush2]Ha! Count yourself blessed with a logical mind then. I needed to read and re-read all manner of statistical, investment and economics articles and books before it finally sank in that the only variable with a correlation to nominal house price is income. [blush2]
There is a very strong argument that in 20 years the median house price will be around 4.7 times average income.Cheers,
F.[cap]Hi Superman,
An incredibly lucid and logical post, well done. Increased demand from population growth can in theory put upward pressure on HPI.
Your inflation + rent theory is a little difficult to verify given the difficulties in obtaining a true inflation figure in this day of high technology, and given the broad downward trend in inflation over the last 30 odd years, surely HPI would show some correllation with that trend?I have an alternate view of the Wages vs House Price graph thanks to CommSec:
http://www.abe.org.au/papers/David~Rees~Presentation.ppt
Page 13.
Of course, this was in mid 2002.Originally posted by SALACIOUS:Crashes and Real Estate Bust books ,now thats definetly bad advice.
Manias, Panics, and Crashes. More bad advice.Spoken like a dot.com ‘investor’…[whistle]
What boubble bust?Spoken like a UK property investor in 1988…[whistle]
In both cases the evidence was freely available, yet the ‘investors’ continued to behave with the same ‘irrational exhuberance’ that enabled the bubbles to form. Remember, when the only fundamental that counts is yesterday’s capital gain, that is the very essence of a speculative bubble.Yeah right. You have what qualifications in financial advice and law?Why would I need to detail my education history in order to post helpful information, while those handing out questionable and dangerous advice go unchallenged?[wacko]
It matters.If you’d prefer lies from a genius to fact from a fool, that is your prerogative.
Some advice for yourself – Dictionary.com. When you have learnt to spell, check the definition of ‘market’.
Hell, I’ll save you the time and post it:Main Entry: mar·ket
Function: noun
d : the area of economic activity in which buyers and sellers come together and the forces of supply and demand affect pricesNow, have you any helpful advice for Nads?
Cheers,
F.[cap]Originally posted by byronent:Move on with your life.
You get a thrill from taking the <edited>?
You can blow me with your whistling.
Here I thought you were someone worth conversing with, another time waster.
Wait till the next boom buddy and then got on the wave. Play it safe. Goodnight.
Byronent
Adelaide SABecause my maths did add up suddenly I am a whatsit head?
I’m sorry if you got the wrong idea about the whistling – firstly it had nothing to do with you and secondly I didn’t realise it was a proposition for <edited>. I’ll be more particular with my use in the future![blink]Cheers, F.[cap]
Originally posted by byronent:42.3Million OMG how you come up with these numbers just makes my head spin.
2005 – $450k
2012 – $900k
2019 – $1.8m
2026 – $3.6m
2033 – $7.2m
2040 – $14.4m
2047 – $28.8m
2050 – ______? [blink]Originally posted by Monopoly:you would do well to give them (if nothing else) a bit of old fashioned common courtesy and allow them to express themselves with your ridicule.
I’ll be sure to do that Ms Monopoly. [whistle]
<edit> hey no fair! You changed your post. I’ll leave mine as it was originally!</edit>Cheerio, F.[cap]
Originally posted by byronent:2150 would be $12.278B
HOw you get trillion is way beyond me.
Have a great evening, you must be very bored.
Byronent
Adelaide SAI appreciate your sarcasm. Care to stake your credibility on this one? Do you actually believe that house prices on average double every ten years?
I thought I made my method quite clear:
If property prices double every 7 years, then by 2050 the average Sydney house price will be 43.2 million dollars!!!Perhaps I should have clarified that I was following the same series in my subsequent posts.
Of course, your figures are far more realistic, almost believable…[blink] Hell, I might even have to buy 3 houses if I want to retire with a 25 billion dollar nest egg.[thumbsupanim] I guess I may as well stop working too, as I will have more capital gains on those houses in the next 8 years than I will net in the remainder of my working life! Thanks for pointing that out![tongue]
I’m sorry to have wasted your time, I’ll try to improve my clarity in tomorrow’s episode of..
MYTH BUSTERS!!!
It’s ok, I’m starting to run out of myths to bust somewhere in the mid teens!
Cheers, F.[cap]
In the year 2155 (that’s only 150 years away), that same house will be worth:
One Trillion, Four Hundred & Fiften Billion, Five Hundred & Seventy-Seven Million Six Hundred Thousand Dollars…
[lmao][specool][thumbsup2]
I would strongly advise you to stay away from ‘wrap’ deals in a falling market. What happens when the wrappee sees that their house is worth far less than what they are paying for it? They can walk away, leaving you with the negative equity. On the other hand, you could try to structure the contract to enable you to chase them for the difference, but god help you when ACA or Today Tonight hear about that![blink]
Cheers, F.[cap]
Originally posted by Monopoly:Your inane need to debunk any “myth” is at best milding entertaining, and at worst, annoying and argumentative with undertones of “troll” like behaviour.
Nobody is forcing you to read or post to this thread Monopoly. FWIW my PM box has a constant stream of messages from people who ARE interested in discussing all facets of property investing in a RATIONAL manner. If you would prefer to hear only stories where properties increase by 2037% (27k to 550k) in ten years, I would suggest you simply don’t return to this thread. If you must post, at least do yourself a favour and find a fault in my facts.
Remember, the average Sydney house is going to be 43.2 million dollars in 2050 according to your theory… let’s see, that would make it in 2099:
Five Billion, Five Hundred and Twenty Nine Million, Six Hundred Thousand Dollars….
Have you spotted the main flaw in this series yet or do you simply believe I am putting some kind of spin on the numbers?
Originally posted by Dimmick:How did you get finance for it originally?
I think the important lesson here is DON’T! [blink]
Alternatively, I know where you can get one in Perth… seller might be under a bit of pressure to sell… chuck me five Gs as a ‘bird-dogging’ fee, it’s yours![cap]Originally posted by grega21360:We are trying to get offers around Mid 120s or better and it is fully renovated with everything new except the water heater.
It is all done floors,carpets, tiles, shower screen, vanity, kitchen ,doors, blinds, handles, lights, switches, stove. Surely it is value even in todays market?Unfortunately the ‘value’ of your property is not determined by you, your real estate agent or a valuer. It is determined by the buyer, and there is nothing you can do to change that. There are still buyers to be found in all markets, but you have to make your flat look more attractive than other similar competing flats, and price is more important to the buyer than many of the renovations you’ve listed. Remember that in this age of Renovation Rescue & Auction Squad every Tom Dick & Betty think they can make over a house!
And don’t forget that if you bought it in the last 5 years many potential buyers will check what your purchase price was and take it into consideration – so easy to do these days!
Drop your price a little. If you still have no nibbles, drop it a little more. When people start looking through, you know you’re getting near the market value. Just don’t fall into the age old trap of ‘chasing the market down’ – In a falling market todays bargain becomes tomorrows fair price!
An alternative way to estimate the selling price of your property is to take the yearly rent, divide by the current interest rate and multiply by 100. That is the tipping point where FTBs and STRs will start pouring back into the market.
Cheers, F. [cap]Hi Monopoly, you’ve quoted some pretty amazing examples there!
In answer to your question – No, my properties did not double in 10 years. On whole they appreciated 300% in 4 years.If you want to believe that properties do not double between 7-10 years, fine that is your perogative….but to say that it doesn’t happen based on one piece of research is ridiculous.Please point to any flaw in that research. Alternatively, supply evidence that property does in fact double in price every ten years on average. Your examples are very nice, but remember, two swallows etc…
I did not say it never happens, the myth is that house prices double every 10 years on average!
I believe I have provided more evidence to refute this claim than any other poster has to prove it true.And please don’t bore me with this study found or that theorist proved because I know more about research methodology than I care to give more than a passing thought to.Again, please point to the flaws in Prof. Abelson’s methodology.
Here’s some food for thought – If property prices double every 7 years, then by 2050 the average Sydney house price will be 43.2 million dollars!!! If inflation follows its trend of <4%, the average Australian income will be around $65,000 at that time. Can you see what is wrong with this picture?
I hope you can muster a more compelling argument against tomorrow’s real estate myth!
Cheers,
F.[cap]Ok Kwiko, so if your property had doubled in value every 10 years it would now be worth 300k. If it had doubled every 7 years it would be worth over 400k. Adjusted for inflation the purchase price was $157,258 in todays dollars. That amounts to 67% HPI over 15 years or a couple of percent above CPI, so you’re about average!
Cheers, F.[cap]Originally posted by Monopoly:Sorry I know I don’t exactly qualify as an investor entering the market when it is cool/quiet as it is atm.
Hi Monopoly!
I thought you had been investing consistently for over 10 years? Surely, you would have seen a period of stagnation or slightly easing prices during that time? On the other hand, are you saying that you believe the market is now cooler/quieter than at any time in the last 10 years? [blink]
Have you known others who have pulled the pin while you stuck to your plan? Ever been tempted to cut & run? Where did you find the strength to remain committed? How long do you think the average investor will hold on in a flat market?
My own property investing experience is insignificant compared to yours (I pulled out when I thought the market had topped out in 03), so I value the insight you can offer.Cheers,
F.[cap]Originally posted by shaztaz:Here’s some nuts & bolts, get your hands dirty, real life research you might be interested in…
http://www.somersoft.com/forums/showthread.php?t=18255&highlight=quigglesFrom:
http://www.somersoft.com/forums/showthread.php?t=18255&page=3&pp=15&highlight=quiggles
I read:Originally posted by quiggles:on 100% borrowings you could expect about 4% after tax.
I don’t think this is really going to help nowork is it? Less return than bank interest with more risk?
And besides, what’s with taking us [offtopic] and then trying to call ‘shenanigans’ on anyone who questions your incorrect statements?Originally posted by stargazer:Excuse my ignorance but how do you invest in the index fund.
Find a fund manager, read their prospectus, send money!
What sort of returns can one expect med to long term.7 to 9% above inflation in the long term.
How much is a minimum investment.Usually 2k, 5k or 10k depending on the fund you choose. Sometimes there is also a minimum monthly investment.
Would investing in the index fund be a good retirement strategy.I cannot give specific financial advice. It depends on your risk tolerance and your investment timeframe. 5 years would be an absolute minimum and 10 recommended. Such an investment vehicle requires a cool head, good returns are achieved by ‘dollar cost averaging’ and best returns are achieved with a ‘loss plus’ strategy. Either way, it’s not a case of investing all your savings and forgetting about it, the investment should be built over a period of time.
Hope this helps.
F.[cap]Tip:
Lower your gearing / leverage / LVR in a rising market. That way you can ride out the subsequent bull market without falling into negative equity.Originally posted by unannounced:resiwealth,
Im sure not my issue is gearing…? Obviously it’s going to be very negative until development finishes.Gearing = Leveraging.
Negative and Positive Gearing just indicate whether cashflow covers costs.
Highly Geared = High LVR = High Risk = High Gains in a Bull Market = High Losses in Bear Market.
http://www.anz.com/australia/anzatwork/learning/investing_15.aspCheers,
F.
[cap]Originally posted by shaztaz:“It’s a world wide thing so don’t worry you’re not alone.”
Suggest you ask someone who is investing in the U.S. or China at the moment, don’t think they would agreeI suggest you ask someone who is an economist and does not work for a major bank / real estate firm / media company. I think they would agree with Torachan that the current speculative bubble is a worldwide phenomenon encouraged by media hype, easy credit and ‘irrational exuberance’. Hell, even some media are forecasting gloom – (co?)incidentally the ones who don’t rely on RE advertising for revenue.[blink]
From the ‘States:
http://www.washingtonmonthly.com/features/2004/0404.wallace-wells.html
From the UK with Aussie references:
http://www.moneyweek.com/article/352/investing/property/global-house-prices-are-they-about-to-plummet.html
From the UK:
http://www.moneyweek.com/article/576/investing/property/signs-that-the-crash-is-coming.html
Regarding China:
http://www.marginalrevolution.com/marginalrevolution/2005/01/what_countries_.html
and
http://www.foreignaffairs.org/19940501faessay5107/richard-hornik/bursting-china-s-bubble.htmlI’m happy to post more links, or you could try some research for yourself using the following link:
http://www.google.comHope this is informative!
Cheers, F.[cap]Originally posted by woodsman:Foundation, so what are your credentials to give out advice??
A fair question perhaps, but what use posting qualifications on an internet forum? What does it matter providing the advice I dispense does not cause harm to others?
I think any poor or misguiding advice deserves to be challenged, and I would urge everyone to do so.
Remember, Nads73 has much to lose if a hasty or ill-informed investment decision is made.
So perhaps it is time for me to advise Nads rather than simply picking on other posts?Nads73, your collection of ‘good books’ should include:
Extraordinary Popular Delusions & the Madness of Crowds by ANDREW TOBIAS
Manias, Panics, and Crashes: A History of Financial Crises by Charles P. Kindleberger
How to Profit from the Coming Real Estate Bust : Money-Making Strategies for the End of the Housing Bubble by John Rubino
and
Irrational Exuberance by ROBERT J SHILLER
when the 2005 edition hits the streets.Just for a few. Remember, if the author offers an expensive seminar, put the book back on the shelf.
Cheers & Goodluck Nads,
F.[cap]
:D:D hehehe I’m happy about that 
that was independant thought [blush2]
