What more were you looking for god_of_money?

toe wrote:
Between late 2002 and 2005 the market plateau'd. So I dont see how you say that's impossible.

I’m still not convinced.  You’re looking at the weighted average for 8 capital cities.  Is it possible that the plateau you’re seeing is really just an average of rising markets (such as Perth) and falling ones (such as Sydney)…[Read more]

Hi Pharvie – you raised some good points – and I agree that price can trade within a tight range. Would you agree however, that it’s usually due to one of two reasons – either a) there’s not much interest or trading happening so not much price movement, or b) there’s a lot of interest but it’s a battle between bulls and bears.  We can definitely r…[Read more]

Hi Guys,  I’m not so sure there needs to be an “event” in order to pop our housing bubble. With the American housing bubble, or the ‘87 stock market crash for example, nothing specific happened that caused them to burst.  A bubble relies on a constant supply of new entrants to keep it going.  One day, you eventually run out of people willing to p…[Read more]

Great topic Steve and to answer your question – of course Buffets comments can be applied to Australia. The only difference being that our bubble was about twice as big as theirs, so our inevitable crash will likely be twice as severe – see the second graph on this page: http://www.whocrashedtheeconomy.com/blog/?m=200903

fWord – I think we've gone as far as we can with this debate.  Was fun – cheers.

god_of_money – I've got no idea what you're talking about or why you're asking me to define the GFC.Here's a link – look it up yourself.  Looks like it started in 2007, but I'm not an expert.http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932010

god_of_money – I thought the GFC started around mid 2007 (the peak of the sharemarket). Do you have a link to prove otherwise?  And what is your point?

fWord wrote:
In a similar fashion, when either the property bubble bursts or property goes out of fashion, prices of all houses are reduced when they change hands. But when things pick up again, the houses in the most desirable locations will have the greatest potential to increase in price (as the graph in that PDF file you told me to read,…[Read more]

fWord wrote:
The way I see it, there's a lot of seriously loaded people out there. If these people are always buying into the hip and trendy suburbs, prices are going to get higher as each of them tries to outbid other parties for a chance to live in these areas.

You keep saying that you’re not implying that good areas won’t fall.  So what is t…[Read more]

god_of_money – charts of the All Ords and Dow Jones are readily available on the internet.  Check them out.

Well said Melbournite.

god_of_money wrote:
The facts AREAll Ords went back to pre GFC level in 18 months DOW went back to pre GFC level in less than 18 months

No they didn't.  In fact, they still haven't recovered to pre GFC levels.

fWord wrote:
Then why bring up the point earlier that property values are crashing (or have crashed) in other countries to say there is no truth in the claim that property values will trend upwards? If we have not studied the fundamentals in these countries, we cannot draw any conclusions about the reason for their property market crash, nor…[Read more]

fWord wrote:
Sorry, you've got me confused here. Which statement are we referring to that leads you to bring up this point?

I was referring to when you said “Hmm…your statement seems to imply that people who put money into property do not focus on potential cash flows” but I may have misunderstood. 

fWord wrote:
Not entirely true. With depr…[Read more]

Are you serious?  Is that actually what it recently sold for or what the owner is asking?  That would be a 2% yield – before costs!

fWord – you were the one that said the majority of investors are in the business of capital gain.  And in recent times, I would agree.I also agree with you about tax.  Although, I think many property investors don’t realize that a tax deduction just reduces the loss (as opposed to eliminate it, or turn it into a profit).Underlying profi…[Read more]

Hi Wynyard.  My guess $460,000 now.   About half that in 7 years.

fWord wrote:
Where then is this fine line between investing and speculating?

Investors focus on the potential cash flows of the investment (e.g. rent / profitability / dividends).  Of course, they might also hope that the value of their investment will go up as the potential future cash flow improves.   Speculators aren’t as interested in the…[Read more]

fWord wrote:
Then it is the market dictating the cost of renting, is it not? And why should an investor charge rent that is under market value?

That’s right. I’ve never suggested that investors should under charge. 

fWord wrote:
The vast majority of the investors on this forum are actually losing money on their investments every year. Howe…[Read more]