House prices to keep rising for years

[numbercruncher]

More evidence of how bad its getting, people plundering there super

Madness destroying your super to pay for a house your probably going to lose anyway ..... If they cant afford it now they certainly cant afford it after the coming Interest rate rises !

DESPERATE Australians are draining their super nest eggs to fend off mortgage foreclosures in record numbers.

As continuing interest rate rises squeeze cash-strapped mortgagees, more are dipping into their super to save their homes.

Super fund trustees are reporting a staggering rise in the number of people drawing on their compulsory retirement funds as rates soar.

http://www.news.com.au/business/money/story/0,25479,23228188-5013954,00.html

SO they blow there super and the taxpayers get to pay for their
retirement via centrelink pensions, the cost of the property bubble is sure starting to stack up!

Banks are falling back in line price wise for their exposure to over inflated asset prices - will take them years and years to get back to previous highs

 

[tech/a]

Ive come to realise that posting on these sort of threads is a waste of keyboard strokes.

People will defend their view with whatever they can find.
Both for the positive and negative view of the topic.

If your happy doing what your doing just continue to do it.

If your not involved in it I fail to see how hypothesis or theory/Quoting articles can be of benifit to you or anyone else.

Like asking your heart surgoen how many surgeries he's performed and how he handles things when they go off the rails.

His reply would be based on many of the comments here.

"Well Ive read many news articles on the topic and watched RPA,but dont really want to get involved as I might stuff up"

If your involved in property and you make it a business no matter how small,you'll become good at it and do better than you could dream of.

If you dont then you'll also do very well at doing nothing.

"Progress comes from the intelligent use of experience."

Thats experience NOT theory.

 

[numbercruncher]

Your right people will always defend their view.

But average house prices are and always have been capped by that ultimate fundamental, credit , they cant rise further on average than peoples borrowing/repayment capacity.

You can argue all day that everyone needs shelter or everyone needs food etc, it doesnt mean they can or will start paying $100 for a hamburger.

With rising interest rates (in the absense of even bigger payrises) people simply cant borrow more than they did prior to the rate rises.

In this Globalised economy we are going to be effected by what goes on elsewhere, virtually every western economy has falling house prices, I see it as the ultimate and most timely warning.

Just look at the soaring amount of properties coming up for auction. Rising defaults. Banks share prices . Soaring Interest rates . etc etc.

Perth and NZ prices already stagnating and/or falling - I think Perth got like 1pc growth last year, thats a dead set massive loss when adding up the holding costs.

 

[ROE]

This is what I usually find.

Ask RE investor if house price will ever stand still or go down?
Ask a barber if you need a hair cut
Ask a bank if you need a loan
Ask stock analyst if you can lose money on blue chip
Ask a Car dealer if you need a new car

They should instead ask

ask a barber if you need a new car
a car dealer if you need a hair cut
etc...

that should put thing in perspective.

 

[Uncle Festivus]

Ive come to realise that posting on these sort of threads is a waste of keyboard strokes.

People will defend their view with whatever they can find.
Both for the positive and negative view of the topic.

If your happy doing what your doing just continue to do it.

If your not involved in it I fail to see how hypothesis or theory/Quoting articles can be of benifit to you or anyone else.

Tech/a, I agree to an extent, as I was surprised to see this thread appear because I knew it would be the same old thing rehashed form previous threads, a classic flame.

Several posters do in fact post (the latest) data, both for & against, to back their opinions so to this end it is there to be discussed in this forum/thread, because data is ever changing.

I guess the biggest gripe I have against the property perma bull's is the assumption that 'property always rises'. It is subject to cycles as is most things. Is this the top of the cycle?

Out of curiosity, what would it take for you to change your view that the general property cycle in Australia has turned or peaked? ie what would make you sell?

 

[Temjin]

Ive come to realise that posting on these sort of threads is a waste of keyboard strokes.

People will defend their view with whatever they can find.
Both for the positive and negative view of the topic.

I agree as well.

This is why I admire Tom Ronald for coming into this thread and attempt to present his view in an unbiased way. Presenting facts on the current economic and real estate market situation should be encouraged at every way.

However, attempting to change one's view on a particular topic is usually futile because you can almost guarantee that person have a vested interest in maintaining their view and defend against all criticism / opposing ideas. (i.e. investment in properties) It's human nature.

If your happy doing what your doing just continue to do it.

If your not involved in it I fail to see how hypothesis or theory/Quoting articles can be of benifit to you or anyone else.

Agree, if you are fine with the real estate and already have a sizeable portfolio, then go ahead and continue to ride the trend. It is just not my cup of tea at the moment given the huge capital investment and how dangerously leveraged it has to be in comparsion to my existing net worth.

I am fine with my other ventures that I preceived to be of less risk and more rewarding, at least for now!


To Tom Ronald,

We are all thankful for your participation in this thread. Your efforts in presenting the facts will definitely be useful for future references. I am sure that someone would seriously consider the information / argument you have given and re-evaluate their investment portfolio as a result of it. I admire your knowledge so far in this particular topic. These are definitely contrarian thinkings and I have almost always failed to persuade anyone (who already own a home/investment property) to agree otherwise.

I will be sending a PM to you for some personal advises soon.

Cheers

 

[Temjin]

Out of curiosity, what would it take for you to change your view that the general property cycle in Australia has turned or peaked? ie what would make you sell?

I would question it another way.

Does it matter for YOU personally if he changes his view on the current general property cycle in Australia?

Sometime it's better to think this way because it would mean less flustration when someone has an opposite view. This become more prevalent when you start to think more contrarily. (i.e. the general Australian public still believe the property cycle in Australia has not turned and will continue trending up indefinitely)

 

[wayneL]

I agree as well.

Me too.

The setup is in place, it's now a matter of observing how it plays out and taking investment decisions according to how we individually see it.

However, we shouldn't underestimate the amusement value of bickering about it all. No sense spitting the dummy because others see things differently.

 

[Kimosabi]

Your efforts in presenting the facts will definitely be useful for future references.

pppfffftttt,

There is no place in this debate for the presentation of facts, logic or clear, concise arguments.

Thankyou


Kimosabibots

ps, I need Property Volumes data, low volumes is the trigger for the bust...

 

[tech/a]

Out of curiosity, what would it take for you to change your view that the general property cycle in Australia has turned or peaked? ie what would make you sell?

I'll answer specifically in a moment.

Firstly Economic data is current long enough to be proven correct or Incorrect.
Just as a economic data can be right longer than you can stay liquid if at times buying on valuation (In the stock market).

Its the Broad Brushing of not only the arguement but the questionable accuracy of all articles and tables presented.(Median Averages can be misleading---particularly if small data pools are used). I doubt anyone could argue that this can be debated from both sides probably successfully by both.

Specifically answering your question.
of 11 IPS I now hold 7.
Why did I sell 4---Gearing. Of the 7----3 are Freehold the others + geared.
My requirement (personal) to limit risk exposure has as it turns out cost me in real terms around $300,000 on what I would have recieved if I had sold now.
Thats an awful lot of interest I could have paid back.---I'm far from perfect!

The point I'm attempting un successfully to make is that regardless of economic circumstance you can find opportunity.

Dont disregard risk but embrace it when doing your own personal numbers.

I agree not all will be able to take advantage of these opportunities as their risk parameters will be too great.This may in the future change---I never thought it would in the late 80s when I saw my world fall to a card board box---(so to speak).

I'm saying to those people who arent in a position to take advantage of opportunity to be aware that although it seems impossible now---one day it will present it self as either
(1) Your circumstances change
OR
(2) Economic Circumstances cange
OR The most likely
(3) Both change.

Dont become frozen by fear!
Dont be baffled by experts who have no practical experience (I'm not pointing at TOM here!).
Dare to be an individual.
Take care of Risk and you can do anything---Business /Property/Trading.

I need Property Volumes data, low volumes is the trigger for the bust...

How true that is!

 

[Tysonboss1]

This is what I usually find.

Ask RE investor if house price will ever stand still or go down?
.

I would say that if a person doesn't believe that property prices can fluctuate and down trend from time to time then they are not a true property investor,...

Most people that own realestate are property "buyers" who fool them selves into thinking they are Property "Investors".

 

[Tysonboss1]

pppfffftttt

was that a fart,...?

 

[Kimosabi]

was that a fart,...?

It can be whatever you want it to be...

 

[theasxgorilla]

Out of curiosity, what would it take for you to change your view that the general property cycle in Australia has turned or peaked? ie what would make you sell?

Changes to the economic fabric which suggest a prolonged rise in unemployment. While everyone is so gainfully employed they'll keep borrowing and struggling to repay. Property will remain safe as, well, houses. :

ASX.

 

[GreatPig]

Property will remain safe as, well, houses

Just like these ones you mean? :

GP

 

[robots]

hello,

actually Tom R has written the same old same old from the socialist crew, Tom R admitted that he has missed out on 400k since selling his place and isnt happy about it

"oh rents cant rise and rise, values cant rise, people cant earn more money etc",

I fine many who comment are those who have simply missed out and begrudge anybody else who is making $, the seachangers especially

and when someone on the forum tells everyone they have a million dollar share portfolio or killed it with a 50% profit on XYZ its like "well done brother"

but if its on property you get popped,

thankyou

robots

 

[ROE]

hello,

actually Tom R has written the same old same old from the socialist crew, Tom R admitted that he has missed out on 400k since selling his place and isnt happy about it

"oh rents cant rise and rise, values cant rise, people cant earn more money etc",

I fine many who comment are those who have simply missed out and begrudge anybody else who is making $, the seachangers especially

and when someone on the forum tells everyone they have a million dollar share portfolio or killed it with a 50% profit on XYZ its like "well done brother"

but if its on property you get popped,

thankyou

robots

You on a stock forum aren't you .....people here are stock bias for whatever reasons.. maybe you can find sympathy on Property forums.
I usually don't care if someone make money in property or shares.. I generally express views if something I think is over price.

I dont understand Why bother arguing ? everyone has their investment objectives, it's better throw around ideas rather than arguing RE is better or shares is better, or this that never go down in price....I found it pointless.

why dont we close this sort of thread and move on

 

[Kimosabi]

I dont understand Why bother arguing ? everyone has their investment objectives, it's better throw around ideas rather than arguing RE is better or shares is better, or this that never go down in price....I found it pointless.

why dont we close this sort of thread and move on

Why, it's so much fun.

I hope everyone realises that eventually the Bears will be proven Right, Just as the Bulls will eventually proven right as well, it all depends where we are in the Privately Owned, Central Bankers cycle...

 

[robots]

hello,

yeah but why get stuck into people because they make money with property, oviously it annoys people,

you get labelled perma-bull, spruiker, real estate agent for only holding a bit of property and making some $,

I hold shares and have missed out on $ by not being in the resources (except for some LGL) but dont carry on like everything has to crash

thankyou

robots

 

[explod]

Why, it's so much fun.

I hope everyone realises that eventually the Bears will be proven Right, Just as the Bulls will eventually proven right as well, it all depends where we are in the Privately Owned, Central Bankers cycle...

Of course we all want to be right but it does not happen.

Aussie Stock Forums is basically about investing, full stop. That is my only real interest in it also, fun well taking the mickey out of those that wear their hearts on a sleave can be akin to pulling wings off flys.

I have no overall preferences between investment vehicles but I do have preference to vehicles in thier time on the financial cycle. It is best to be on the horse that is in front. We cant' do that at the races but we can do that with investments and those that do are the winners.

Property has been fantastic since I started in it in 1968. Resources,Banks..etc(what about the run up for CBA) all have had their sunshine. At the moment for me I see incredible financial problems around the globe and with its onset noticed a few years ago that gold looked like the best vehicle. Since 2001 it has come from US$260 to 900 an ounce and on an inflation adjusted basis compared to the 1980 spike should be over 2000.

I will be back to property again when it looks to be the best vehicle. So rather than be concerned about individual preferences lets just be focused on the facts for good investments.