House prices to stagnate for 'years'

[numbercruncher]

In twenty years we will see who has been right. That will be when the last of the baby boomers will finally have moved through to 65. Is that when you are waiting for the bargains to appear?

Cheers and good luck waiting,

Shane

Challenge accepted Shane.

You continue to invest in Houses.

I will rent one of your houses returning you 3pc per annum.

I will take the alternative route and invest in Aged care, respite care, lifestyle apartments and other vehicles aimed at the largest demographic group in Australia.

in 20 yrs we will meet back here and compare digits.

Cheers and goodluck to you to as well.

 

[Shane Baker]

Hi Wayne

Irish house prices have gone up 270 % since 1996 and Dublin house prices 26% in the last two years. It's the old story about timing and being in the market.

http://www.finfacts.com/biz10/irelandhouseprices.htm

Like trading....being the last one on the trend is not a happy place to be.

Cheers

Shane

 

[Kathmandu]

I will rent one of your houses returning you 3pc per annum.

Again you assume that all property only returns 3%, you never take into account rental, tax, depreciation etc etc.

And um, if you are investing in Aged care, respite care, lifestyle apartments , what would you call that????

Dave

 

[Kathmandu]

Hi Wayne

Irish house prices have gone up 270 % since 1996 and Dublin house prices 26% in the last two years. It's the old story about timing and being in the market.

http://www.finfacts.com/biz10/irelandhouseprices.htm

Like trading....being the last one on the trend is not a happy place to be.

Cheers

Shane

Yep, I'd be happy to take a 30% haircut if I had bought into that market, infact, I would have expected it.

$270% - 30% = 240%, how could I live with myself, the returns are shocking.

Dave

 

[numbercruncher]

Yep, I'd be happy to take a 30% haircut if I had bought into that market, infact, I would have expected it.

$270% - 30% = 240%, how could I live with myself, the returns are shocking.

Dave

$100 x (270%) = 370
$370 - (30%) = 259
---------------------

100 to 259 = 159%

159/11 = 14.45 p/a (less inflation,Interest and other outgoings)



Becareful out there Davo

 

[wayneL]

Hi Wayne

Irish house prices have gone up 270 % since 1996 and Dublin house prices 26% in the last two years. It's the old story about timing and being in the market.

http://www.finfacts.com/biz10/irelandhouseprices.htm

Like trading....being the last one on the trend is not a happy place to be.

Cheers

Shane

Exactly.

But this is just the start.

 

[wayneL]

$100 x (270%) = 370
$370 - (30%) = 259
---------------------

100 to 259 = 159%

159/11 = 14.45 p/a (less inflation,Interest and other outgoings)



Becareful out there Davo

OOPs.

The cruelty of mathematics.

 

[Kathmandu]

$100 x (270%) = 370
$370 - (30%) = 259
---------------------

100 to 259 = 159%

159/11 = 14.45 p/a (less inflation,Interest and other outgoings)



Becareful out there Davo

No matter how you do it, better than a poke in the eye,

and dont forget the rental, depreciation and other tax benifits.

Dave

 

[Kathmandu]

Exactly.

But this is just the start.

That's what you've been saying since 21st-September-2005, 01:28 AM

Oop's, the cruelty of missed opportunity

Dave

 

[wayneL]

That's what you've been saying since 21st-September-2005, 01:28 AM

Oop's, the cruelty of missed opportunity

Dave

Oops, RE isn't the only game in town.

BTW, I didn't miss it, I bought at value.

Oops, sold one in 2006, held for a few years, all documented somewhere in this thread.

I'm comfortable and happy and not interested in a pissing contest.

I have always said RE is a great investment... at value.

Cheers

 

[Kimosabi]

Oops, RE isn't the only game in town.

BTW, I didn't miss it, I bought at value.

Oops, sold one in 2006, held for a few years, all documented somewhere in this thread.

I'm comfortable and happy and not interested in a pissing contest.

I have always said RE is a great investment... at value.

Cheers

Timing is everything.

For those that missed the last cycle, wait until this cycle finishes. This is happening as we speak and load up early in the next cycle.

The stars seems to be pretty nicely aligned for a Global Housing Price Crash IMO...

 

[numbercruncher]

The stars seems to be pretty nicely aligned for a Global Housing Price Crash IMO...

Exactly kimosabi ....


And as soon as prices start to fall the Largest demographic group in society the Baby Boomers many of whom are completely dependant upon the Equity in there Homes and scared of further price drops will desperately flood the market so as to free up there cash to fund retirement.

The clear cut winners will be the Boomers who have already had the foresight and downsized to appartment living.

 

[Kimosabi]

Exactly kimosabi ....


And as soon as prices start to fall the Largest demographic group in society the Baby Boomers many of whom are completely dependant upon the Equity in there Homes and scared of further price drops will desperately flood the market so as to free up there cash to fund retirement.

The clear cut winners will be the Boomers who have already had the foresight and downsized to appartment living.

I'm waiting for this current Credit Cycle to end, and will probably enter the RE market sometime in the next two years when Interest Rates start falling.

The contents of this thread will be very different in a years time.

 

[Kathmandu]

And as soon as prices start to fall the Largest demographic group in society the Baby Boomers many of whom are completely dependant upon the Equity in there Homes and scared of further price drops will desperately flood the market so as to free up there cash to fund retirement.

And as I've put to you before the market will only be flooded if

a) they are scared of further price drops (they have been in the market and seen up's and downs before, unlike this generation) if not, no flooded market

b) they all decide they want to move into retirement on the same day/week/month, if not, no flooded market

c) they have no other investment, so have to sell, but see a) and b) if not, no flooded market

do you beleive they will all sell at the same time?

do you think that a drop in Val. will worry them much (it will some)

do you think that the PPOR is the only asset class that BB's have? (some it will be)

Dave

 

[Kathmandu]

I'm waiting for this current Credit Cycle to end, and will probably enter the RE market sometime in the next two years when Interest Rates start falling.

The contents of this thread will be very different in a years time.

Interest rates falling in the next 2 years,?????


Dave

 

[numbercruncher]

Interest rates falling in the next 2 years,?????


Dave

There wont be falling Interest rates (in Oz) in the next 2 years im almost certain unless its to ward off some massive economic disaster or ARMageddon.


Chinas quickest growing export is now Inflation, at the beginning of the boom it was deflation they provided us with via cheap stuff but now with soaring resource demand (ie/oil) and growing internal Inflation such as wage growth feeding into dearer exports. Even the Yuan has been rising in value vrs USD, notice how the US have gone all quiet on the demands to China to revalue the Yuan ? That is because the US is now quite desperate to lower interest rates in the face of ARMageddon and a higher Yuan would serverly feed Inflation

 

[numbercruncher]

Future holds 10% + interest rates: Greenspan

"Former Federal Reserve Chairman Alan Greenspan said in an interview published on Monday the Fed would have to raise interest rates to double-digit levels in coming years to thwart inflation."

http://www.reuters.com/article/businessNews/idUSN1728325720070917


Unfortunately that would bring investment property yields down below 2pc assuming "average prices" remain at there current unsustainable level.

Interest bill on a current "average" priced house fully financed for the owner occupier would probably exceed an entire after tax income.

Peak Debt, coming to a disco near you soon.

 

[krisbarry]

Tomorrow marks 2 years to the day that I actually started this thread..and in all honesty not much has changed most states have had a little bit of growth, but better growth has come from the stock market.

Sure some suburbs have had major growth, but averaging it out state by state and suburb by suburb little has changed!

Hip, Hip Horray, looks like the housing bear is dancing for joy as house prices are about to fall, with higher interest rates on the way, according to the new RBA head honcho

 

[Shane Baker]

Interest bill on a current "average" priced house fully financed for the owner occupier would probably exceed an entire after tax income.

So developers stop developing. No new stock. Less people per household and immigration increasing to offset declining worker numbers leads to more competition for existing rental stock therefore rising rental returns.

Be careful what you wish for

 

[theasxgorilla]

A very simplistic article that fails to take onto account that when the baby boomers sell their large family home they have to move somewhere.

Exactly...simplistic, fear inspiring and controversial. Perfect tabloid fodder.

I know of numerous instances where the family home was not sold until it was incredibly necessary (ie. 80+ years)...and I know of numerous instances where larger (not large, just too big to be bothered tending the garden) houses were sold and the people moved into a similar configuration houses in a better suburb. Dollar for dollar they were either the same or they used savings/investment profits to actually pay more for the next house.

This was the generation preceding the boomers...not a poor generation, but not typically wealthy either. The boomers have a LOT more money. I expect many will keep the family home and buy a holiday house as many don't want to move far away from their family and social groups. So you end up with a high rate of second home ownership, which drives demand. Everyone is looking for the obvious, which means that the unexpected, when it inevitably comes, can't be obvious by definition. I'd look beyond the story of the poor boomers being forced to move to shoe boxes because their house prices crashed. I'd look to kids and grand kids peaved because the house that gran held onto isn't worth as much in real dollars as it was 20 years earlier when her and grand dad retired.

Most stubborn old people don't move themselves into aged care voluntarily... expect 80-something, not 65 to be the ball-park for when these services come under heavy demand. Once again, too far off into the future for anyone to know whether the boomers will still have money or whether someone has robbed it from them somehow. In the short to medium term, I still see game on.

ASX.G