It's an often heard remark this one, usually in response to arguments by property bulls that high property prices are a result of rising demand in response to such things as immigration. Yet its so easy to counter the bull argument by pointing out that we have ample land and that immigration is not proportional to house price growth, therefore we have a bubble.
It's probably where a bit of urban planning background comes in handy. I assume those places have better public transport than we do? Decentralised work?
There is a theory, and it seems to hold, that there are actually these quasi/ psychological limits which impose themselves on the physical limits of cities. Generally, it is thought that most people aren't prepared to live further than 30 minutes away from their main transport destination. This varies depending on the type of transport though. So if for example, they have better rail and light rail, people will be prepared to live further out.
And a quick bit of research after writing that, and it will give you the answer:
"Railways
The Randstad is the keystone of the Dutch railway network; most intercity connections terminate in one of the key cities in the Randstad. The railway network in the area is dense and heavily used."
Rapid mass transit can be used to both densify, and extend the physical limits of a city. Although in the latter case it would probably develop atypically to what we are used to.
Whenever I read this thread I remember 'Stop the Clock' who ad nauseam trotted out all the same stuff that Chops posts. I doubt that anyone would be surprised if we're all still on this forum when Chops and Stop the Clock are 95 and they're still sitting on the fence.
I can clearly remember the doom mongerers at the time I bought my first IP.
"Times are uncertain", they said. "Interest rates could go higher".
(Already 22% on IP).
"If there's a real downturn in the economy, you might not be able to get tenants".
"Tenants will give you all sorts of problems. They're all irresponsible".
Etc Etc.
Never had a single problem with a tenant, never was that place vacant, inflation pushed rents higher all the time, and the capital appreciation was excellent.
I think you are missing something in my argument Julia. I'm not talking about occupancy rates anywhere else but Perth in the context of Passive completely ignoring it as a real factor. It is a real problem in Perth property over the long term.
Also, if you have read my discussions with Agathos, I'm certainly not altogether bearish property. In fact, I think property is a fantastic investment. If you can time it well enough or near enough, you can effectively have an almost risk free passive income stream. I'd take that on a call writing strategy any day of the week.
It is also not clear cut, because I think there are some great deals in property starting to appear here in Perth, if you have the ability to get in position:
http://www.bigfooty.com/forum/showthread.php?t=528606
Going back to the Agathos discussion Julia, I have my areas where I am long term bullish, and long term comparatively flat. I'm not exactly sure how you can see me sitting on the fence there.
If I see a deal that makes sense in one of these areas, I'll do it when I can. No two ways about it. Like I've said over and over again, the Beacy strip through Hammy Hill and maybe Coolbellup is where I will be looking because of its proximity to Freo, and development potential.
But there is probably another issue that needs to be looked which I will do with Tech's post.
Mooorrrning.
No hangover (I don't drink but so tiered need to get to bed!).
Some thoughts for 2009.
After recession and in worst cases depression there always follows---inflation and in some cases hyperinflation.
If you don't have property then---you'll likely never have it.
You'll all get your wish and rent for the rest of your lives as will your kids and their kids.
Cash will mean nothing as it is eroded by inflation.
That $300,000 home will become impossible to own as it will race away in price as your deposit becomes less and less in value.
You must have at least 1 home to keep in touch with inflationary trends.
Yeah... I don't agree. You may just as well buy gold.
If inflation pushes rents up, but wages apparently stay the same so they can't afford said inflating property, there will come a point where rent will intersect total earnings. People will just stop working, and society will cease to function. It just isn't a logical argument.
I'd hypothesise that if we did get some kind of inflation - personally... I think a Japan scenario is a much greater probability than hyperinflation - property would actually inflate at less than the inflation rate. After all, it seems to have been property that was one of the main pushes behind our inflation.
Interest rates wont sit at 30 yr lows for another 30 yrs.
Those that have "ridiculous" loans will be laughing as they(The loans) diminish into in significance as inflation races away.
Chops
Everyone can develop even those without a home of their own.
Even with very little capital base.
All you need is holding and preliminary cost capital.
This can be found with JV partners if you have a good development with excellent numbers.
This is true. But I'm also wary of doing these sorts of deals. It is a distinct possibility with the brother and the contacts in the future.
It is also a reason why I would be prepared to pay quite a bit more for developable land. Subdivide, live in one and sell the other. I know quite a lot of people do this, but I don't understand why more don't.
I'm sorry for giving you some heat over the last day or two. I apologise for that considering your circumstances at the moment.
Another thing I want to point out, as I mentioned above. In relation to running battles on this thread between the "haves" and the "have nots". Maybe it should be italicised or bolded or something.
There is a big problem with those who already have property, not understanding the nature of property investing. Not in a bad way, but from the perspective of not being in the market. Typical property investing is not
generally something you take on for a short time. In a lot of cases it is essentially a permanent investment. Therefore, entry is everything.
If you have got in at a good time, for one reason or another, generally, you are set. You are running. As long as you aren't stupid, outside influences are generally irrelevant. For those not in the market, that's not the case. Get in at a bad time, it can set you back 5-10 years maybe.
So there is this rather large disconnect between the two viewing points of the groups. The owners on here, seem to have done very well for themselves, and so long as they haven't been stupid, so long as they have invested wisely, a lot of what is happening is just noise. They are past the point of having to worry about the factors that may or may not inhibit them to begin with.
For the rest, it is a matter of, if they so wish, to be able to get into that position where it really doesn't matter if houses go down 10-20%, so long as they are getting a return. And it seems most are. But the fact that the two groups are looking at, and have completely different parameters to work with, within the same asset class, means there is a whole heap of misunderstanding. And I don't think that that is something that can't be overcome.
hello,
but chops, prawn, NC and others are doing well man as they saving hard, putting it away
thats the game rent and invest nothing wrong with that, people will do well
thankyou
robots
See, Robi gets it.
Nawww... I love you Robi.
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