House prices to stagnate for 'years'

[wayneL]

... if a property was worth £0.01 900 years ago, and appreciated 10% per year, here is what it would be worth today:

£162,938,591,294,311,000,000,000,000,000,000,000.00

LOLOLOLOLOL

 

[Bronte]

Hehe! It did seem a little too good to be true Wayne.
We have made well over 10% per year over 20 years.

 

[Bronte]

The book did spur us along to buy lots of property...so it can not all be bad..can it? LOL

 

[Bronte]

The book did spur us along to buy lots of property...so it can not all be bad..can it? LOL

'Building Wealth through Investment Property' by Jan Somers
Bought in October 1998 Australian author....

 

[Bronte]

Jan also writes: 'In the United States, the average long-term growth trend from 1968 to 1990 was 8%, while inflation over the same period averaged 5.9%'

Plenty of suburbs in Perth have returned 10% capital growth over the last 30 years. Reference: The West Australian 24th May 2003

 

[Bronte]

Plenty of suburbs in Perth have returned 10 capital growth over the last 30 years. Reference The West Australian 24Th May 2003

These are the suburbs we concentrated on.....thanks to Jans book
South Perth
Victoria Park
Scarborough
Mount Lawley
Innaloo
Inglewood
East Vic Park
Leederville

 

[Bronte]

Do you have any Investment Property Wayne?

 

[wayneL]

Do you have any Investment Property Wayne?

In pommyland, but not expecting it to hold it's preposterous valuation.

 

[wayneL]

Jan also writes: 'In the United States, the average long-term growth trend from 1968 to 1990 was 8%, while inflation over the same period averaged 5.9%'

Plenty of suburbs in Perth have returned 10% capital growth over the last 30 years. Reference: The West Australian 24th May 2003

Coincidently, this is the period of the baby boomers influense. Demographics are changing and we are entering the phase of the great die-off.

Property will be is massive oversupply sometime over the next 30 years.

 

[krisbarry]

"Perth real estate is certainly not stagnant.
86 people a day are presently migrating to WA
This equates to 50/60 extra homes required per day.
We have been busy buying prime real estate since 1998"
Quote from last October...this thread.

We have been buying at least one property per year since 1998
Today we decided to list our first property to Sell.

But twice that head to QLD and their housing market is pretty flat (1000 people a week), so your argument doens't stack up.

Its the mining boom, not so much the migration

 

[Bronte]

In pommyland, but not expecting it to hold it's preposterous valuation.

So have we Wayne....in Birmingham, England.
Where is / are yours?

 

[wayneL]

So have we Wayne....in Birmingham, England.
Where is / are yours?

Somerset & East Sussex

Looking at Gloucestershire once prices are slaughtered. Could have a look in Krautenbergerland soon too.
Cheers

 

[Bronte]

Very nice.... we used to own a holiday home in Minehead ?

 

[wayneL]

Very nice.... we used to own a holiday home in Minehead ?

Quite close then. I've seen that on the map. (can't find it now though lol) closest one is probably nr. Yeovil

 

[wayneL]

Quite close then. I've seen that on the map. (can't find it now though lol) closest one is probably nr. Yeovil

Found it... not as close as I thought

 

[WaySolid]

Coincidently, this is the period of the baby boomers influense. Demographics are changing and we are entering the phase of the great die-off.

Property will be is massive oversupply sometime over the next 30 years.

Well only in the normal bust boom cycle of new dwelling construction perhaps. I certainly have seen nothing in the demographic research I have read that would indicate doom for the Jan Somers style of investing in Australia. It's a very robust methodology which will stand the test of time I believe.

If you are not aware that average people per house is falling rapidly then it might appear likely that there will be less demand for dwellings from an ageing populace. Also there is the possibility that Australia's attitude to immigration (think 200 mill in Indonesia, 1 Bill in India, 1 Bill in China, many young skilled and happy to come to Australia). Suffice is to say that there are plenty of things to consider when forecasting.

I predict for the next 30 years property located in an Australian capital city will continue to do pretty much what it has done for the last 50, which is grow a bit over the rate of inflation, roughly 10.5% for houses.

Just an aside as I spend a lot of time reading about such issues there is an excellent article about why inflation is being pushed into things like housing and service industries (things China can't make for us) published by GaveKal research if anyone wants to do a bit of digging. Overpriced? According to what measure and why should that still be relevant?

 

[wayneL]

Well only in the normal bust boom cycle of new dwelling construction perhaps. I certainly have seen nothing in the demographic research I have read that would indicate doom for the Jan Somers style of investing in Australia. It's a very robust methodology which will stand the test of time I believe.

If you are not aware that average people per house is falling rapidly then it might appear likely that there will be less demand for dwellings from an ageing populace. Also there is the possibility that Australia's attitude to immigration (think 200 mill in Indonesia, 1 Bill in India, 1 Bill in China, many young skilled and happy to come to Australia). Suffice is to say that there are plenty of things to consider when forecasting.

I predict for the next 30 years property located in an Australian capital city will continue to do pretty much what it has done for the last 50, which is grow a bit over the rate of inflation, roughly 10.5% for houses.

Just an aside as I spend a lot of time reading about such issues there is an excellent article about why inflation is being pushed into things like housing and service industries (things China can't make for us) published by GaveKal research if anyone wants to do a bit of digging. Overpriced? According to what measure and why should that still be relevant?

If we are to analyse holistically then we then must consider factors such as peak oil, environmental concerns, climate change. The American/Australian style of sprawing city is absulutely unsustainable and this will become apparent in an uncomfortably short time frame.

The farmers in my area having the worst season in living memory... climate change? Will Australia even be able to feed itself under the twin burden of expensive energy and changing agricultural conditions?

The growth in housing above inflation has been an anomoly, a statistical abberation of the post ww2 period. Over the long term there have been enourmous lengths of time where housing stagnated and/or moved down.
Most housing trend charts are conveniently truncated at the post ww2 beginning of the baby boom giving an inaccurate picture of the long term trend.

Further rises in R/E above inflation are not economically sustainable. It's been a fantastic game, but the game is over.

 

[Realist]

I predict for the next 30 years property located in an Australian capital city will continue to do pretty much what it has done for the last 50, which is grow a bit over the rate of inflation, roughly 10.5% for houses.

I predict that you are totally, utterly, and completely wrong.

There's no way a $500,000 apartment in Sydney will be worth $8M in 26 years.

No way in hell.

 

[Bronte]

These are the suburbs we concentrated on.....thanks to Jans book
South Perth
Victoria Park
Scarborough
Mount Lawley
Innaloo
Inglewood
East Vic Park
Leederville

We also bought into a retirement complex in Dianella.
Not a 10% area although has given great returns

 

[wayneL]

I predict that you are totally, utterly, and completely wrong.

There's no way a $500,000 apartment in Sydney will be worth $8M in 26 years.

No way in hell.

Not unless wages go to $2,500,000 p/a