House prices to keep rising for years

[knocker]

oh dear...the kids got another freebie today...2500 towards the insulation..so with interest rate drops of 1% on the average 250,000 loan thats another 2500...so 5000 in one day.....
now they can afford to spend another $$$$$$ on that house.....
plus another 2500 in rate cuts next month..

so how many houses in this country are un insulated? If they are already insulated what are you going to do? Remove the old stuff and install new? Glue it to the outside? or maybe just use it on a new home? lol what a joke

 

[ROE]

House prices aren't quite so hot. My friend had a full duplex (upstairs home and the downstairs home) for sale and didn't get many people coming through. It was on the market for 1.2M. I've been going to open for inspections for 2 Months now and anything between 300K and 400K is sold within 2 weeks. Most of the buyers were investors, people in the over 50's group, not many FHB's.

The majority of investors just want to buy something in this price bracket, rent it out and get regular income. Cash getting 3 and 4% is not much chop for self funded retirees and with sharemarkets imploding I can understand why they want the security of real estate. Beachside suburbs that are walking distance to beaches, clubs, supermarkets and transport will always be in demand, cheers.

Obviously these people don't know what government bonds is .. and as close to risk free as you can get

1 Year bond 7.5...
5 years bond for 6.25%

want to go longer?
10 Year bond 5.25%
15 Years bond 5.75%

and if they done any research they notice average yield on govies bonds is around 6% through out any man life time

 

[Bill M]

Obviously these people don't know what government bonds is .. and as close to risk free as you can get

1 Year bond 7.5...
5 years bond for 6.25%

want to go longer?
10 Year bond 5.25%
15 Years bond 5.75%

and if they done any research they notice average yield on govies bonds is around 6% through out any man life time

ROE, you are distorting the facts. Coupon yield and "real" yield are 2 different things.

From THIS LINK today: "Three-year government bonds fell 11 points to 97.01 for an implied yield of 2.99 per cent."

Then look at the real yields here from the RBA's website, not real good.

 

[wayneL]

ROE, you are distorting the facts. Coupon yield and "real" yield are 2 different things.

From THIS LINK today: "Three-year government bonds fell 11 points to 97.01 for an implied yield of 2.99 per cent."

Then look at the real yields here from the RBA's website, not real good.

...not to mention capital risk.

 

[MR.]

...not to mention capital risk.

Ahhh ...... but ......... what investment does not risk one's capital?

 

[GumbyLearner]

Ahhh ...... but ......... what investment does not risk one's capital?

your own backyard!
Of course unless your a moron who doesnt know how to grow your own veggies/fruit.

 

[wayneL]

Ahhh ...... but ......... what investment does not risk one's capital?

Depends whether we are talking real or nominal.

Bond risks are both real and nominal. If gu'mint needs to start attracting funds via increasing interest rates (a real possibility... and sooner than many might imagine), bond capital values will take it where the sun don't shine.

 

[wayneL]

your own backyard!
Of course unless your a moron who doesnt know how to grow your own veggies/fruit.

Sweat Equity! The "fruit" of one's own labour.... bewdiful.

(sorry for the pathetic little pun )

 

[MR.]

your own backyard!
Of course unless your a moron who doesnt know how to grow your own veggies/fruit.

"What you talkin bout Willis?" your own backyard????

Depends whether we are talking real or nominal.

Bond risks are both real and nominal. If gu'mint needs to start attracting funds via increasing interest rates (a real possibility... and sooner than many might imagine), bond capital values will take it where the sun don't shine.

Heard it before.....
Yeah it will happen, but not "just" yet....

 

[wayneL]

Heard it before.....
Yeah it will happen, but not "just" yet....

Doesn't matter.

Bonds still carry capital risk, whereas term deposits do not (ignoring default risk etc{which applies to just about freakin' everything atm}).

I'm not saying this is a bad thing or a good thing, it just is. Where there is capital risk, there is the possibility of x sigma occurrences which can snatch capital straight from your wallet before you can say Jack Robinson.

Just something folks should be aware of.

 

[nunthewiser]

Doesn't matter.

Bonds still carry capital risk, whereas term deposits do not (ignoring default risk etc{which applies to just about freakin' everything atm}).

I'm not saying this is a bad thing or a good thing, it just is. Where there is capital risk, there is the possibility of x sigma occurrences which can snatch capital straight from your wallet before you can say Jack Robinson.

Just something folks should be aware of.

well aware

has anyone mentioned the intrest rate danger on bonds ? re intrest rates moving the wrong way ?

 

[nunthewiser]

sorry just scrolled back ..onya wayne

 

[Beej]

Obviously these people don't know what government bonds is

Great little set of posts! So it seems that unlike ROE, we DO all now know what a government bond actually is (if we didn't already before) Thanks to WayneL, Bill M and co for some good info!

Cheers,

Beej

 

[lioness]

Robots and pro property owners,

You will disappointed with me, but I am dumping my rental property in Brunswick.

Just signed the docs and it is now getting ready to be sold.

I will let you know how it goes as it will be a good indication of the first home buyers market. It is worth around 500K.

I will keep you all updated on it.

This property is cash flow positive by the way(just), but I am taking the profit and going to cash and waiting for falls.

I now expect falls of up to 30-50% in the next 3 years.

The agents I spoke to also fear the same, they are secretly telling me the party is over.

 

[kincella]

wow, what a turnaround...only last week or so you told us you were going to buy several props....
I would not take the word of a RE agent...frankly.....
what changed your mind ???

 

[lioness]

wow, what a turnaround...only last week or so you told us you were going to buy several props....
I would not take the word of a RE agent...frankly.....
what changed your mind ???

To be honest, yes I have turned around. What has changed my mind is my job security is at risk and I want to be debt free in this tsunami.

Secondly the property is strata titled and is deteriorating as I am not allowed to improve the outside at all. I want to be able to control inside and outside.

Thirdly, I expect no growth for the next 3-5 years and don't wish to keep the bank rich and fourthly wish to cashed up for buying opps as other people's misery in the next 2 years.

 

[knocker]

Robots and pro property owners,

You will disappointed with me, but I am dumping my rental property in Brunswick.

Just signed the docs and it is now getting ready to be sold.

I will let you know how it goes as it will be a good indication of the first home buyers market. It is worth around 500K.

I will keep you all updated on it.

This property is cash flow positive by the way(just), but I am taking the profit and going to cash and waiting for falls.

I now expect falls of up to 30-50% in the next 3 years.

The agents I spoke to also fear the same, they are secretly telling me the party is over.

No the party has just begun. lol Why listen to realestate agents? Smart people are already moving in!! Good luck with your poor timing and decision.

 

[lioness]

No the party has just begun. lol Why listen to realestate agents? Smart people are already moving in!! Good luck with your poor timing and decision.

Kncoker, I don't listen to real estate agents. If you expect prices to average incomes which are at 7 times already to go to 9,10 times in the worst credit crunch, then good luck.

Will I miss out selling now?? Maybe miss out on 5% growth MAXIMUM, so better to lock in profit. You also don't understand strata property obviously. I dont want to hold this type anymore.

 

[knocker]

Kncoker, I don't listen to real estate agents. If you expect prices to average incomes which are at 7 times already to go to 9,10 times in the worst credit crunch, then good luck.

Will I miss out selling now?? Maybe miss out on 5% growth MAXIMUM, so better to lock in profit. You also don't understand strata property obviously. I dont want to hold this type anymore.

Fair enough. But only months back you were a bigtime property bull/guru, slagging off us bears. Times change don't they

 

[MR.]

Doesn't matter.

Bonds still carry capital risk, whereas term deposits do not (ignoring default risk etc{which applies to just about freakin' everything atm}).

I'm not saying this is a bad thing or a good thing, it just is. Where there is capital risk, there is the possibility of x sigma occurrences which can snatch capital straight from your wallet before you can say Jack Robinson.

Just something folks should be aware of.

Wayne,
"doesn't matter" It appears I don't understand! ???

Capital risk: are we still talking about Government bonds? There is most certainly capital risk for corporate bonds.

If the government guaranteed bonds are "not" traded/sold before their maturity, isn't your nominal capital still guaranteed? I can only assume you speak of selling the bond before maturity?
So then risk is just inflation?

Deduct (tax paid) inflation from the small return and left is your real gain.
(if any ofcoarse) Hold until mature!

Otherwise it troubles me as what you are talking about exactly!
It's all part of learning!
with thanks.
MR.