Land appreciates
Infrastructure depreciates

So if you have a higher % of depreciating assets, a higher yield is needed to offset.

Our house finally listed last Thursday! The US started to slow a bit early this year, but in the last month [lmao]. We have 21 offers as of today, that’s 4 days. Yes you read that correctly [biggrin]. My wife and I are obviously thrilled and hoping the escrow goes well.

We listed slightly (say 2%) under market value so as to inflate demand. But…[Read more]

Originally posted by dmichie:
superman – so your point is that the affordability situation in Brisbane is actually worse than the Demographia figures suggest?

BTW, I had already made this point in another post: Sydney is even less affordable when you consider that mortgage interest is tax deductible in the US, US interest rates are considerably…[Read more]

Now I need to pipe in…
Brisbane: 6.0
LA County: 10.1

Naive view: Oh Brissy is not that bad, check out LA. Brissy is affordable by international standards; overprice, overshmice.

WRONG! WRONG! WRONG!

The facts: average home loan rate is currently 6% which can be fixed for 30 years! You heard that correctly! Furthermore home interest is…[Read more]

The endeavour to avoid LA-style is noble! I live in LA and UGH! There is a lot to be said for centralisation… I think living here has made me appreciate how important it is that Australian cities don’t go down the same path.

I have purchasing experience in the US. I have lived here for 4 years with my wife. A little over a year ago we jumped into the Californian market and bought in Lakewood, a city in LA County. Since I’m buying from within the US, I’m sure my experience is quite different from what you are chasing, but I’ll mention a few things.

For one, just…[Read more]

Funny you should mention “non deductible”. Over here home interest is a tax deduction! So owning (with a boarder) was only a few k more each year. But now heading back to aus, prices there are HIGHER vs income and interest is not a deduction.

They fret about LA house affordability, but Australian capital cities actually make LA look CHEAP…[Read more]

Seems supply is dwindling and you might be able to demand more…

http://www.finance.news.com.au/story/0,10166,12485854-14302,00.html

I’ll be back in a year and renting, so my bias is that yields stagnate. I figure at least a year of renting and readjusting to the Australian lifestyle (read 12 months of inebriation and BBQ’s) before we know…[Read more]

Originally posted by Nobleone:
Hi all,

I was a ‘peak oil’ follower until I recently read this article…

http://www.rense.com/general63/staline.htm

… which gives some very reasonable debate material re the abiotic oil argument.

It’s a long read, but I always say that if you don’t read all the facts/theories/ideas etc you really cannot make…[Read more]

That it is. But, how would the means of determining fundamental value have changed? I suggest that given this pdf was pre-euphoria it might actually be more accurate!

Oh no, there was no mention of oil as a current risk, this is just my own theorizing. And non-CBD isn’t the sticks.

But, yes as you say, oil goes up economy responds, what happens when it REALLY goes up? $100 a barrel, in real terms?

Originally posted by Investigator:
Hi Foundation,

I respect your opinion, however, wages don’t actually have any affect on Rent

Good morning Investigator, forgive me for jumping in here, but I’m fascinated by fundamentals discussions and I abhor your apparent oversight.

You are correct to state that supply and demand affects rents. Less rental…[Read more]

These are returns, i.e. rent + appreciation. So they do not necessarily conflict with the previous values. The disucssion is whether house prices double every x years, so these figures cannot be compounded to this end.

Fantastic link! Problem is over the last 100 years shares have outperformed… and over the last 20, significantly underperformed (N.B this doens’t include the 30% runup in ’04). This makes me a little queezy about RE [confused2] but I want to go home and do some research on 20, 50 and 100 year trends and read this link in detail, thanks again.…[Read more]

point to a decreasing number of people per household

Now that is interesting! So that will, in theory, increase the demand. But I can see a problem here; less people per house-hold, will mean lower inflation adjusted house-hold incomes. That should, in theory, decrease demand. So again the system is balanced. Surely it can get a little…[Read more]

Damn you do your research! Amazing stuff. If we can’t debate property issues, what are we doing here? On that note, seems troll has been redefined:

1. One who’s opinion does not match my own.

So is Myth Busters actually on air in Australia? I’m too long departed to know [confused2]. You even have their catch phrase to the teeth, “busted wide…[Read more]

Um, you will no doubt discount me a troll-supporter now, because I agree with Foundation’s posts. But I honestly don’t see a single personal jab in any of his replies, whilst you are flatly undermining his integrity! [blush2] I was taught that the best demonstration of maturity was to walk away from an unnecessary conflict, i.e. ignore the…[Read more]

The means RBA controls inflation by removing money from the economy. For larger national debt, a smaller rise is necessary, for the same effect. So no matter what the initial rate (7% or 12%), assuming the same level of debt, a 0.50% would remove more money. But then we can’t really compare like that because we’ve never seen rates of 12%, while…[Read more]

thanks to the rise in debt levels, moves in interest rates are three times as potent as they were in the early 1990s.

Fortunately I think this is the reason we won’t be seeing 80’s-style interest rates within the next decade or so. Because the RBA (nearly said Fed, I’m stuck in US atm), can now pack a more concentrated punch, i.e. 0.25%…[Read more]

Yes this is what I often tout as the most likely scenario (in additional to a small initial drop, say 5-10%). Unfortunately 3.45% + 3.1% (average rental return end of ’03) is less than the new rates will be, i.e. negative investment returns (on the geared component) for years to come.

Yes this is the average and yes everyone hopes (or knows) they…[Read more]