House prices to keep rising for years

[Tysonboss1]

Not unusual given this is a stock forum, not a property forum.

Try our bearish view on any of the investment properties forum and I'm sure we will be flamed to death.

We are still in the "in denial" stage though, but with a bit of anger in it.

Has anyone noticed the share market bleeding to death,

The property market is holding up better than the share market,

 

[explod]

Has anyone noticed the share market bleeding to death,

The property market is holding up better than the share market,

Of course, the stock market has been shakey for 12 months or more and it would appear has a way to go also.

Just as obvious but more recent the property market has begun to look a bit shakey also. But if we take in the object or theme of the thread, the part about "...keep rising for years" seems to be bleeding also.

Some of us who lost faith in all of it a few years ago have taken counter measures such as buying up physical gold. Up 30% a year for the last three years.

 

[Tysonboss1]

Of course, the stock market has been shakey for 12 months or more and it would appear has a way to go also.

Just as obvious but more recent the property market has begun to look a bit shakey also. But if we take in the object or theme of the thread, the part about "...keep rising for years" seems to be bleeding also.

Some of us who lost faith in all of it a few years ago have taken counter measures such as buying up physical gold. Up 30% a year for the last three years.

the tide of money flowing into gold will reverse at some stage,

 

[YChromozome]

Has anyone else noticed that Robots has gone MIA....

I noticed that yesterday. I hope he is o.k. - I'm concerned about his well being.

 

[Temjin]

the tide of money flowing into gold will reverse at some stage,

As in more money will flow into it because there isn't enough right now. Hardly anybody are investing in gold right now, and sentiment is still very low from a historic sense. Go and ask around, who has gold as investment?

I noticed that yesterday. I hope he is o.k. - I'm concerned about his well being.

Kinda missed him too, it makes reading this thread a whole lot more "interesting".

 

[pepperoni]

Kinda missed him too, it makes reading this thread a whole lot more "interesting".

Still waiting for robots' next property boom report ......

 

[explod]

Still waiting for robots' next property boom report ......

Dont' you worry about Robots, property will be back with a vengence in a year or two. And after I have sold my gold for a good profit there will be some juicy property for the next cycle. And as it does a new wave, inflation will help those who have held onto tangible stuff to continue on. It will be 1970 over again.

 

[Kimosabi]

I noticed that yesterday. I hope he is o.k. - I'm concerned about his well being.

I found him!!!!



He's lookin a bit down and out.

Oh well, we did try and tell him that house prices won't keep going up forever...

 

[noirua]

Don't put a cent in property, not advice, just a "WARNING", as a cold icy wind blows, and a storm is on its way!

 

[Aargh!]

I found him!!!!



He's lookin a bit down and out.

Oh well, we did try and tell him that house prices won't keep going up forever...

ROFL. Bloody funny stuff

 

[numbercruncher]

I noticed that yesterday. I hope he is o.k. - I'm concerned about his well being.

I wonder if hes out there dumping his IPs into the market and when he returns he will be a RE mega bear ? You know sorta like those people who give up smoking and then all of a sudden become the strongest anti-smoking advocates in society ?

 

[stock_man]

It will be 1970 over again.

Can you explain what happened in 1970?

 

[explod]

Can you explain what happened in 1970?

In 1974 I brought my first house for $20,000, in 1979 I sold it for $90,000. It was a no brainer and everyone hit the jackpot with that particular part of the cycle. In 78 brought some blocks of land which doubled in 12 months.

Unfortunately it was the main seabed for the current complacency and a sense that property is an invicible investment.

I meant the "1970's "

 

[stock_man]

In 1974 I brought my first house for $20,000, in 1979 I sold it for $90,000. It was a no brainer and everyone hit the jackpot with that particular part of the cycle. In 78 brought some blocks of land which doubled in 12 months.

Unfortunately it was the main seabed for the current complacency and a sense that property is an invicible investment.

Interesting that your property went up 4x the original amount in just 5 years. Makes the current property boom seem small (most people talking about 2-3x).

Ran the figure of your house purchase of $20K in 74 in the rba inflation calculator (http://www.rba.gov.au/calculator/calc.go). Adjusted to inflation it would now be worth $127K!

This says to me that over a 38 year period, property is defying and increasing well behond inflation over and over again. Assuming it is now worth 300k, the average annual increase is 8.5%, while inflation was 5.8%.

I can see how this leads to the "current complacency" regarding property.

But still, what rules does property follow? I am confused!!

 

[explod]

Interesting that your property went up 4x the original amount in just 5 years. Makes the current property boom seem small (most people talking about 2-3x).

Ran the figure of your house purchase of $20K in 74 in the rba inflation calculator (http://www.rba.gov.au/calculator/calc.go). Adjusted to inflation it would now be worth $127K!

This says to me that over a 38 year period, property is defying and increasing well behond inflation over and over again. Assuming it is now worth 300k, the average annual increase is 8.5%, while inflation was 5.8%.

I can see how this leads to the "current complacency" regarding property.

But still, what rules does property follow? I am confused!!

You need to get into economics and follow currencies, supply and demand, and focus on trends. Then maximise the cycles.

Have you ever looked at the financial clock for example, a good place to start the thinking. Google it ans see what you find.

The rules are, do not fall in love with a particular means of making money and growing wealth. Try to find the best at the moment and go for it. The hard part is to pick when it has stopped. I was 2 years too early with property but I have made up for it by going onto areas that have been as good. George Sorros is a good one to read uip on also, he's a mate of Warren Buffet

 

[Kimosabi]

Interesting that your property went up 4x the original amount in just 5 years. Makes the current property boom seem small (most people talking about 2-3x).

Ran the figure of your house purchase of $20K in 74 in the rba inflation calculator (http://www.rba.gov.au/calculator/calc.go). Adjusted to inflation it would now be worth $127K!

This says to me that over a 38 year period, property is defying and increasing well behond inflation over and over again. Assuming it is now worth 300k, the average annual increase is 8.5%, while inflation was 5.8%.

I can see how this leads to the "current complacency" regarding property.

But still, what rules does property follow? I am confused!!

The RBA calculator doesn't use the "REAL" inflation figures.

If you want to calculate "REAL" inflation figure, your probably better off using the RBA's M3 figures which is currently increasing at 16%, not their 3 - 4% bullsh!t...



M1: currency + bank current deposits of the private non-bank sector
M3: M1 + all other bank deposits of the private non-bank sector
Broad Money: M3 + borrowings from the private sector by NBFIs, less the latter's holdings of currency and bank deposits
Money Base: holdings of notes and coins by the private sector plus deposits of banks with the Reserve Bank of Australia (RBA) and other RBA liabilities to the private non-bank sector

http://en.wikipedia.org/wiki/Money_supply

 

[pepperoni]

You need to get into economics and follow currencies, supply and demand, and focus on trends. Then maximise the cycles.

Have you ever looked at the financial clock for example, a good place to start the thinking. Google it ans see what you find.

The rules are, do not fall in love with a particular means of making money and growing wealth. Try to find the best at the moment and go for it. The hard part is to pick when it has stopped. I was 2 years too early with property but I have made up for it by going onto areas that have been as good. George Sorros is a good one to read uip on also, he's a mate of Warren Buffet

Is that you robots?

Houses anywhere worthwhile in sydney are about $2m. Tens of thousands of them ... they wont be getting to $9m 1970s style anytime soon.

Years ago property was VERY often bought outright with cash ... european migrants often bought in leichardt with cash after 12 months saving!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Suffice to say the market was once undergeared .... hence the potential for the increases we have seen.

How long does it take to save for that $1m inner west property now? A lifetime or two? All I can say is Bwa-ha-ha-ha.

Increased prices are just the result of a few changes in the fundamentals of the property market (ie huge leverage and millions of dual income households).

The market is so overgeared now its not funny ... you may in your extensive readings have heard about the sub prime crisis? Recent increases are fueled by the robots selling their souls (and much much more) for 30 years and beyond. Once all the fools have had their souls sucked up there is literally nowhere for property to go.

So until the money to service the ever increasing gearing grows on trees property is not sustainably going up much. With oil, food, internet, phones, tolls, energy (ie every fundamental costs of living) increasing, property could be flat for decades ... even with 3% interest rates.

And suffice to say medium to long term falls are definitely possible.

 

[explod]

Kimosabi, that house is now worth about $200,000 against you measure to $300,000 That was one of my points, they do not rise on a steady scale, it is the old saw tooth. I believe if you put some time in it is possible to be in and out at roughly the right times.

Of course to make that on my first house was the pure luck of the beginner, wish that could have remained my story. But looking back helps learn the game.

 

[pepperoni]

Oh yeah and as "mortgage stress" is killing sydneys property bears, this bear has the 1.8m proceeds of liquidating properties earning 8.1% with the CBA compounding monthly.

It earns me over $2,500 a week, from which I rent a $4.5m - $5m property on balmoral slopes for $825 a week. 4 bedrooms, 27m frontage, 300m to cafe and beach. No rates, no maintenance, not even lawnmowing. Not to mention a far cry from the 60sqm unit of the property bull.

In fact all the property bulls should feel free to calculate my landlords rate of return!

Ok its a rare bargain, but they exist in the supposed dire rental market (unlike the buying market).

But its more a lifestyle thing for me, and whilst my returns wont be stellar, Im happy keeping things simple.

 

[Pommiegranite]

Oh yeah and as "mortgage stress" is killing sydneys property bears, this bear has the 1.8m proceeds of liquidating properties earning 8.1% with the CBA compounding monthly.

It earns me over $2,500 a week, from which I rent a $4.5m - $5m property on balmoral slopes for $825 a week. 4 bedrooms, 27m frontage, 300m to cafe and beach. No rates, no maintenance, not even lawnmowing. Not to mention a far cry from the 60sqm unit of the property bull.

In fact all the property bulls should feel free to calculate my landlords rate of return!

Ok its a rare bargain, but they exist in the supposed dire rental market (unlike the buying market).

But its more a lifestyle thing for me, and whilst my returns wont be stellar, Im happy keeping things simple.

Hey Pep...which CBA account gives 8.1%?
Thanks