I've been a long term poster over at Somersoft, and last week decided to permanently stop contributing due to moderator decisions I thought were motivated by long standing moderator bias against me and my analysis of the markets.
Since, it has come to light three respected long termers have also exited – Dazz, Bill.L, and Sunfish.
I've raised their names here partially so that if they ever wish to get in touch with me, or discuss their decision, they may do so here. But also to highlight that I am not alone in questioning the moderation of the Somersoft forum.
If anyone else from Somersoft is interested in why I left, I am happy to clarify via private message here. I am unable to do so via private message on Somersoft because my log in was frozen shortly after my last post.
I will say that at all times I have tried to impartially read a broad source of economic and finance data, and use that to shape my view on future property values. More recently the data I was reading overwhelmingly indicated Australian property values would soften…and Steve has said the same on his recent market update. However, I would go further than Steve and say that Australia's growing dependence on foreign credit carries risk that imho will make property values much more volatile in the future, and that timing market entries (and possibly exits) may be more important than a passive dollar cost average 'buy and hold' strategy, as taught by Jan Somers.
Indeed, I think considering recent economic events, the Somers might have taken the opportunity to publicly affirm or revise their views on property investment, supporting those views with objecitve data; just as Steve has done.
The chart below plots the rolling 10 year average annual growth of Brisbane house prices. i.e. holding property for the 10 years 1991 to 2001 saw an average of 3.47%pa growth.
So note well that growth is cyclic, that it has peaked, and is now trending down. Many property investors who have enjoyed strong growth over the last 10 years think the next 10 years may be just as strong. Anyone who has been around longer will take more note of the cyclic nature of growth as depicted in this chart. And they will take an even more keen interest in credit supply, for this is in my view is what influences property growth most.
Hi WW
Good to see you on propertyinvesting.com – looking forward to your contributions.
All the best
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Well said ……..
I will also no longer contribute to the somersoft forum. Even though i specifically respond to posts that my businesses services can help the are inevitably pulled down. It appears to me they would rather i was less transparent and pretended to be an impartial customers of the service rather than the owner highlighting what we do. their loss.
Winston – People (the herd) only know that Property only goes up –
It is only people like me who have Micro and Macro economics knowledge and who have experienced 1992 when interest rates were over 17% that know a cycle exists.
Federal Government fiscal policy has delayed the downturn part of the cycle from occurring (FHOG). It usually cycles at 7 to 8 years when fiscal policy is not used to prop up the market.I was reading the newspaper the other day and it stated 11,000 houses ($2.5 billion) had been foreclosed on in the last 5 years and that is without the recent November 2010 interest rate rises or the effect of increased Council Rates, Electricity service charges and increased Water service rate charges and petrol price increases.
http://www.couriermail.com.au/money/victorian-home-owners-losing-it-all/story-e6freqoo-1225955278692
interesting forecast in last few lines of courier mail news article.
duckster wrote:Winston – People (the herd) only know that Property only goes up –Yes, a lot of people (especially over at Somersoft) are punch drunk on the last 10 years of growth.
I wouldn't touch a Brisbane site that could not be developed substantially (unbeknownst to the vendor) at the moment. Listings in Brisbane have gone up on average 50% in the last 12 mths, and 100% in some suburbs.
Will keep my gun powder dry until after another couple of rate rises next year.
How anyone can think Australia doesn't have a two speed economy is beyond me. Just go talk to your local shopping centre small business people, and see if they are saying the same as Marius Kloppers and Tom Albanese.Winston,
You sure you not reading my mind …??? ….lol…….Have to say you impressed me with your last couple of posts…… clearly your finger is on the pulse in my opinion ….
I agree with timing, I agree with keeping gun powder dry so to speak but on the other hand, for me at least losing momentum isn’t an option….. Such is the speculative cycle.Keep the posts coming
You in Brisbane by the way????Yes I am in Brisbane. The slow down seems to have been more pronounced and early here than Syd, Cbr, Mel.
Be interesting to see how things unfold in the next few months nationally.WW i agree with you that the Brisbane market is softening although for someone who owns a property or 2 in the City it doesnt really worry me. I owe very little in relation to my portfolio so a few interest rate rises doesnt mean a great deal.
Rents came off the boil about 12-18 months ago and i think if you were highly geared you would be in all sorts of trouble.
In saying all of this i am certainly seeing some excellent opportunities for development where developers / vendors are finding the pinch and offloading their sites at prices we saw 5-7 years ago.
I do agree however i think the opportunities will increase if you hang and wait your time with a few more rate increases.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Richard,
In saying all of this i am certainly seeing some excellent opportunities for development where developers / vendors are finding the pinch and offloading their sites at prices we saw 5-7 years ago …….
Looking to buy those … inner city…… keep us in the loop if you spot a bargain before or after a rate rise…………beedie they are out there.
I would get a call every 3rd or 4th day from agents i buy through with DA/BA sites for sale and vendors who are desparate.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Qlds007 wrote:I do agree however i think the opportunities will increase if you hang and wait your time with a few more rate increases.Thanks Richard. Fast turnover will be the first thing we'll be looking at next year, maybe a quick corner lot boundary realignment and flick, uncomplicated by a slide. low risk low cost stuff. They seemed popular around Banyo, Zillmere, and Goodna over the last 18 mths. I've noted more recently LMR sites were being churned by small developers in Moorooka and Salisbury, but bidding was pretty healthy at the three auctions I attended.
We may take an equity hit on two properties we've bought this year (Grange and Wavell Heights), and the PPR we have for sale now (Highvale) but appreciate the opportunities ahead, contrary to one too many dills on Somersoft who think anyone who recognises a market downturn is a doom and gloomer.
Two infrastructure projects that have to be taken seriously are the cross river rail and Petrie train extension to Mango Hill (?Redcliffe) Both should be accompanied by denser zoning in appropriate precincts.
Agree in the fast turnover approach WW need to keep the momentum going good times or bad otherwise we do nothing…. and experience tells us doing nothing produces nothing…
We focus on LMR sites and will be avoiding Moorooka next year .. feel a bit of a glut happening there…. we have a complex of 6 on the market there now…. and our builder is weeks away from finalizing 16 of this own around the corner from us and sales on both are relatively nonexistent .
As far as Cross River Rail goes… got a bit excited at first as have another property at Yeerongpilly (thought of density increase).. Then read all about it …link below
https://www.propertyinvesting.com/forums/getting-technical/legal-accounting/4333928
Such is the speculative cycle
Us QLDS need to keep in touch and as far as Somersoft well think they lost one of thier gurus…………lol
beedie wrote:Agree in the fast turnover approach WW need to keep the momentum going good times or bad otherwise we do nothing…. and experience tells us doing nothing produces nothing…
agree beedie……..and early birds get the worm….so always ear to the ground re infrastructure changes. a savvy active investor shouldn't see any surprises in City Plan 2012 by the time it comes out.
We focus on LMR sites and will be avoiding Moorooka next year .. feel a bit of a glut happening there…. we have a complex of 6 on the market there now…. and our builder is weeks away from finalizing 16 of this own around the corner from us and sales on both are relatively nonexistent .
Agree re Moorooka glut. Have noted at least 4 new complexes hit the market in the last few months. Every man and his dog have been all over the burb in the last 2 years.As far as Cross River Rail goes… got a bit excited at first as have another property at Yeerongpilly (thought of density increase).. Then read all about it …link below
Will read up on that. Have been trading commodities moreso since May.Such is the speculative cycle
Hmmmm…..not so much speculation….more trying to match supply to demand at an affordable price within the restrictions imposed by slow moving govt.Us QLDS need to keep in touch and as far as Somersoft well think they lost one of thier gurus…………lol
ha….actually there used to be some sharp pencils on the site who i enjoyed exchanging xls models with, but they've moved on. There seems to be only one or two who do MUDs…….otherwise all cosmetic renos, passive B&H, duplexes, and speccies.
Hi WW,
Although not a poster at sumersoft, i have read some of the material there, have learnt alot from your input there, look forward to hearing from you here at propertyinvesting. Welcome
Cheers
Hello Winston nonrecourse on the Somersoft site before they kicked me off
Much nicer group of people here. With all the quality people that Keith the moderator at SS have pushed out its populated by mostly light weight wannabees like our friend Keith.This site will enjoy your insight. I have found people a little more respectful of the message that yes property is a great investment but beware of the times we are living in. The only sure thing is death and taxes
Thanks Ben, appreciate you saying that.
And hello LR. Good to see you here keeping the b's honest.
Yes, KeithJ, Sim, and puppet cheer squad must be smurking loudly after finally getting rid of another motley crew of independent researchers / thinkers incapable of mindlessly ramping property.
Their Lord and Master has taught them well – "It doesn't matter what happens to property values after I die, as long as they go up up up so I can eat lots of cake then play skip rope to burn it off. Noblesse oblige is for suckers".
No longer will Sim have to stay up late into the night waiting for computer alerts signalling yet another post with the unmentionable 'soft', 'flat', 'crash', nor worry if some not so random forumite is playing "My stats are bigger than your stats"
And, I presume they've been summoned by his Lordship for high tea, a swim, and a spot of tennis overlooking Moreton Bay from the foreshore of Cleveland in Sunny Qld, for a routing job well done.
Meanwhile, I am wondering more each day when the Somers are going to publish their 'bigger stats' to validate their 30 year old message is as relevant today as when we didn't need to borrow so much mulah from foreigners. Must be a whole new generation they can sell their message to, and seduce ever more fresh blood/debt into "The Great Game".
Welcome Winston. You were one of the truly great contributors on SS. I look forward to your imput here.
units4me wrote:Welcome Winston. You were one of the truly great contributors on SS. I look forward to your imput here.And I also.
Your economic analyses and snippets of fiscal wisdom help keep us grounded in the current landscape, Mr. Wolfe. Passive sit-back and pray strategies, are unlikely to work in the current environment. Due diligence has always been important, but more so now. It is the new black.Will follow your charts thread with interest. You also appear to be enjoying the wider array of smilies on this board.
Be well.
Hi Mr Michael. In 2011, I'll continue to read widely and deeply on what really drives house prices, and post about it.
I want to come to a better understanding of money, credit supply, and the effects of banking deregulation. Several at Somersoft (High Equity, Tom) had reasonable insight, but imho fell into the trap of thinking that foreign credit money is somehow different to real money (because it is owed back to the lender). I could accept that if it didn't effect demand for goods (houses) and services.
May all your attainable New Year's resolutions be attained.
Much nicer group of people here. With all the quality people that Keith the moderator at SS have pushed out its populated by mostly light weight wannabees like our friend Keith.
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