Baby boomer RE glut

Well that's the first that I've heard of the rental market slowing down. Vacancy rates are still at all time lows, yields are still increasing (as prices drop) – I just don't know if I would be buying in some sectors at the moment however there is some value to be found in areas which have suffered the 20-30% price drops.

Last night I attended a Property Investment group in Blackburn Melbourne (the one run by Troy and Bec who I think feature in one of Steve's books) where one of the regular presenters illustrated the 3 main cycles of all economies – property / business / cash.

eg: property grows in value because debt is cheap so we all jump in, it increases in value due to demand, and so interest rates go up … finally an event occurs which causes doubt / collapse (in this instance it was the sub-prime debacle but if you trace back through histroy you will find similiar events) … and then property prices take a hit so people move their money into shares … and in this instance shares took a huge hit … so people move their money into cash (cash in the bank 8.5 %). Then the next BIG thing is interest rates start to drop and pressure eases off and after 5 or so drops people start to say "gee property looks good and so they buy an investment property or a home and it all starts again. Cyclic economics!

What he was saying made sense (though economics was never my strong point)

So (in answer to your question) the next party actually is in property but it may not start for another 12 months. Wealth which comes slowly is every bit as good as the fast stuff, in the end. (in fact it is better because it teaches you stuff along the way)

Want to jump out of the rat race and ignore all party goers?  Then buy into property for  a 7 to 10 yr timeframe and DON'T SELL until after at least one boom!! There is always a boom, eventually : )

regards kathlyn veronica

Scott No Mates – I wasn't suggesting the rental market is slowing down. Quite the opposite. Rentals are overpriced and hard to come by because 1) landlords need to cover interest rate increases 2) alot of people are trying to sell. What this has done to the rental market is squeaze the bottom end out almost entirely. 4 beddys cost only slightly more than 3 beddys to rent which in turn are only slightly more than apartments (near me) now. But bottom end tenants on minimum wage or facing redundancy wont be able to afford the rent increases and this will put pressure on some landlords to sell as they wont have the cashflow to keep all of thier investment properties. The only people to sell to, however, wont be able to afford any thing close to the peak of 2007 speculative value. Entry level homes and apartments will have to take a 25% price drop to sell in the next few years.

I recon the only big thing at the moment is investing in bank shares or depositing cash but even that will be shaky for the immediate future as all the biggest banks are eyeing all the others of for takovers.

Do you realize that in 1920 there was a terrorist attack on wall street? Then, in 1925, property went through the roof as everyone was investing in something solid. Everyone knows what happened in 1929 – safe as houses became a furphy. This pattern is strangely familar, is it not?

25% drop ?That sounds like wishful thinking on your part. I'm sure they'll either find a way to afford rent increases, move somewhere cheaper on the outskirts or buy their own properties. The ones on a very low income are getting government rent assistance anyway so its up to the gov. to make sure they can afford rent or provide some for them. 

You are kidding, right ? Until the full exposure to the US market gets revealed and inflation gets under control the only relatively safe place to park money in Australia is quality properties.

I like to call the business cycle farming because thats what it is to a select few, what people need to do is research for themselves why markets rise and fall, booms and busts… Is it just part of life or is it all artifically created by the powers that be ? The professionals will all tell you that it all comes down to Supply and Demand,  but is it really that simple ?

As this is a site dedicated to Investment and Money in general I'm going to try and explain some simple facts about our monetary system, the facts that are distorted to make you think otherwise

First of all where does money come from, who owns it and who decides at what charge this money is lent out at ?

Originally the monopoly started in 1911 when the Australian government passed legislation allowing the central bank to come in and start there plan,  at this point there powers where not as substantial,  though thoughout the 19th century they have subsequently increased, there role has been to facilitate "central banking functions" So what are these functions that they have ?

The functions that the Federal Reserve bank carry out are the complete control of monetary and banking policy,  They control the intrest rates of Australia and the expansion of the money supply,  Unknowingly to most Australian's,  although the purposeful deceit in it's very name the Federal Reserve Bank of Australia is neither Federal or has any Reserves,  The Federal Reserve is a private entity controled by the Elite Banksters of the world,  further more the Australian Government has no control over this organisation or any policy's they may pursue.

So where does this Central get its money from and what do they do with it ?

They don't get it from anywhere,  they magically create wealth out of this air,  If you or I where to create money we would be jailed,  they and they only have the sole right of the issue of Australian money,  you could almost say the Central bank owns all Australian money,  Not the Government. The RBA issues money and then lends it to the Australian Government as a loan to build roads and bridges,  which the Australian people pay for through there Income Tax. Thats right, have you ever wondered how the government gets into debt and where the money comes from ?  The privately owned business who owns all those plastic peices in your wallet you work so hard for.  I challenge one clinically sane person to tell me how a Central bank is in the Interests of the Australian people ?

Would you play a game of monoply where the Banker gets to make all the rules and prints as much money as he wants ? who would win ? Why are we playing this game every day of our lifes ?

Now if you want to understand the business cycle and how the market works imagine this theoretical game of monopoly.

The banker decides interest rates shall be 3%,  debt is easily obtained and people start the mass purchase of property, there wealth vastly increases and they loan again to purchase even more property, the artifically caused cycle manifests and causes more investors and other speculators to enter the property market,  this causes a spiralling effect causing more demand, increased prices and in general an increase of wealth for the common person.

The banker has observed his plan is working wonderfully, he starts increasing intrest rates slowly,  he is making increased profits,  he offers "Flexible" soultions where more money can be borrowed against "Equity"

Once everyone is taped into the debt machine the banker raises interest rates more and more untill they are unbearable, People work all week for there paycheck, 30% straight to the government, A certain percentage of this money will go straight back to the RBA. Then you spend the majority of what you have left on loan repayments, you are practically working for the bank, or the Elite Bankers whom own these huge monopoly corporations

So why would these Banksters put interest rates so high that people can't pay there repayments ?

All you have to do is look at the housing market in America today,  There is a major depression in the property market,  More houses are sold as bank reposessions then private sales. Remember,  Wealth is not destroyed, only transfered. So basically you could say the cycle works like this,

1: Middle class work, purchase property, cars ect ect  Slowly increasing there wealth, or the inflation of the bubble
2: Banksters reap in massive profits as bubble inflates, bubble bursts, mass repossesions, destruction of middle class wealth,  Increase in Elites total wealth.
3: The business cycle starts again.

Basically we are all living in a corrupt society and the majority are none the wiser, This post may even be deleted for reasons of special interest,  Naturally I expect to get criticism from the more apparently "Educated" who will try and put bullet holes into my argument,  Or I will just get the whole your a Conspiracy Theory Idiot,   The fact is I probably already know what the main points of rebuttle will be put I simply did not address these points, Not because I can't but because these post could have become a book long,  Its hard to put years of research into one post,  I have simply tried to put the basic facts into a nutshell for the people who may wonder how and why things are how they are.

Why ? the answer is simple, They do not want to be know, they hide there identity. History has show that when people knew what was going on they where thrown out of power.

The usa was founded on the principles of keeping the central bank out of power, they came to be and have been throw out of America more then once before, you can research these times yourself. When the Elite Bankers where exposed for what they where doing in the past they said they would cause a huge depression if the people tried to stop them,  They didn't lie, Many depressions have been caused.

But if huge ecconomic unstability where caused every 10 or 20 years people would start looking for real answers, the 1929 crash that was caused by these bankers is long forgotten, but if it dosent come very often it is just publicly accepted as the "business cycle"

I suggest people research the great depression, the mainstream view is that everyone suffered equally, but this is totally false, the truth is that the Social Elite's wealth increased enormously, Like I said in the previous post,  wealth is not destroyed, only transferred,  The banks called in all there loans,  they contracted the money supply by over 50% and what happened when the stock market crashed ? The rich bankers bought all those worthless stocks of everybody.. Morgan, Rockerfella, Rothwells….. theses are the familys who own your local bank,  your country's central bank,  the oil companys  and are the same people who stop Alternitave energy sources and technology

Krudd copied how Howard refused to say sorry to the aboriginals did he? Krudd copied the luxury car tax models? Krudd copied the Iraq policy? I am not offerring opinion on any of these things, just proving a point. Krudd lied a bit to get in. Pretended he was more liberal/conservative than he really is. He has a much more socialist agenda (Howard couldn't even say socialism without crying:)) and the longer he is there the more it will come out.

Rates are here.

http://www.centrelink.gov.au/internet/internet.nsf/payments/rent_rates.htm

A 10% CPI increase on rent assistance of 100 P FN makes it around $110 P FN. Last 6 months rent has increased far greater than the CPI as landlords struggle with interest rates. hardly equitable.

The only other thing I have heard of in the Labour pipeline is the rental subsidy, where the landlords get some kind of concession for going under market value and I bet to qualify the landlords will have to accept a value set by the government and not by the market.