Forum Replies Created
Given that the demand for global sea shipping of commodities must be a good leading indicator for the future, what does this say about the deep dependence on commodities australia has developed in the last few years.
Over the last year demand for shipping has fallen over 70%. Interesting …
Good article dmichie.
Luci wrote
The average person in the UK (and many other countries) does not expect to ‘own’ their own homeNo offense but this is absolute rubbish, just where did you get this from? True, there a lot of leasehold land, but also a heck of a lot freehold land. Though a lot of the population has taken up the speculative mentatility to buy up the entire southern coast of spain, which has priced out the spanish locals, but thats a discussion for another thread.
Luci wrote:
Because overseas the rental market is far better developed. It is not unusual to longterm lease a houseTrue, for the larger economies of Europe I.e Germany, where they have STRICT rent controls. The owners have been landlords for generations and its an established business based on reasonable yield, not a speculation driven activity based on potential CG.
Guys and gals wake up, its a global problem driven by cheap credit availibility and when it returns to norm its going to hurt.
Flat prices in real terms still means prices are falling slowly. Whats more telling is the volume of sales, the real indicator of an illiquid market such as property.
2.20 per photo! Are they hiring professional photographers or something.
Thats a disgrace! Considering the embarrasing amateur job most do of property photos (i’m talking EA’s here), thats shocking they even have the hide to ask for anything.
I have always been amazed by why vendors who are attempting to sell and market the most expensive asset they have, advertise it with photos that do the property no justice whatsoever.
Going to be a lot less immigrants and pounds flowing into australia soon. Where will the next level of buyers come into the market to support the perth and se qld markets?
Have you considered other assest classes that potentially offer better returns over the long term. I.e index tracker funds.
You have said that you wont make much money on a outback property so why are bothering. With an asset to appreciate over time there has to be demand, is there going to be that much population growth in the area you are looking into.
Remember that property is not a zero sum game, you can lose more than you put in in the short to medium term if it doesnt all go to the desired plan.
There is some economic research that points to 27 out of 28 asset bubbles that occurred all went back to norm.
Now where is that link???
When it gets near the peak of a 2 sigma range, take the profits while you can.
dmlrichie, what are your views on the qld market.
Given its heavily driven by international (british in the main) and interstate migration there is a massive dependency on new money entering the region.
The UK market is stuffed without a doubt, the govt has all but admited there is a bubble about to go bust with there hairbrained FTB part ownership scheme announced and the incredible low volume of sales going through.
SE QLD will suffer badly in the next few years as uk sellers are forced to takes lower and lower prices. They simply wont have the money to pay for the SE QLD properties. Plus the exrate GBPAUD has declined roughly >20% over the last 5 years.Interstate is more interesting, as sydney prices drop there is less incentive to move north. Likewise vic.
My view is that a long term global correction has started, its going to be a long road of downtrending prices. There might be pockets of reasonable growth areas about but only the best and experienced investors will benefit from these areas.
Gone are the days of simply ‘buy and hold’ property investing.
Demand for SE qld property that relies heavily on international (especially uk) migration will slow markably.
If they cannot sell in the uk nor achieve prices near peak prices then the migration numbers will slow.
Perth/WA appears to be still going ok, but as areas outside capitals and central areas take longer for the slowdown to reach.
Interesting read. So basically it means that no matter what your intuition or growth calculations tell you, 2 or higher sigma events reverse to bring it all back down to average (with a tendency to overshoot). Theres no escaping it.
Just because the last few years have seen incredible growth does not mean the same for the future. I guess that means dont base an investment decision on historical results.
Next few years will be very very interesting…
why watch them pay rent insteadIs that because rent is dead money?
dmichie, did you get sick of using your normal username?ssab has an amazing writing style comparable to yours.
Sorry to disappoint but no.
There is always a chance of IR movements above 9%, but its a good start to cater for around that level (3% above market).
External factors such as the AUD depreciating rapidly(not if but when), chinese currency fix adjusting/floating, or other event have a habit of occurring every 5 years or so.
Dont just assume continued growth and stable IR’s.
So what the calculations be under these conditions?
Year 1 10% growth (03)
Year 2 10% growth (04)
Year 3 -10% growth (05)
Year 4 -5% growth (06)
Year 5 -2% growth (07)Taking brisbane as the example, can anyone rule out -10%(or more) growth this year and tapering off for the next few years(but being more in real terms with inflation counted).
At some point the growth will revert back to trend, as it always does.
