House prices to stagnate for 'years'

[robots]

hello,

2 asset classes

dont miss out on one or the other

owning a property(PPOR) is an extremely passive, low risk, capital gains free way of creating wealth

things havent gone bust and things havent gone boom, but solid as

thankyou

robots

 

[numbercruncher]

mummy, Im scared!

Its curious that some of you think 2012 will be a good time to buy property.

To state the obvious, baby boomers will retire in 2010. Until then, they will be adding funds to their retirement accounts, ie managed funds, ie shares. Come 2010, they will stop adding funds to that market. Furthermore, they will begin drawing on these funds, ie selling. It is quite likely that many retirees will sell large chunks of shares / managed fund units, because they require frequent and consistent income streams. What provides this? PROPERTY.

Furthermore, retirees cannot live in a managed fund. They will require a residence. Demand for primary residences will increase. Demand for investment properties will skyrocket. This pattern is unlikely to change until the retirees start to die off, maybe 10-20 yrs later.

So the only market that is doomed, is EQUITIES (unless investing in healthcare)

Are you a realestate salesman by chance?

To state the first obvious, Baby Boomers wont retire enmasse in 2010, some will certainly not all like you seem to imply.

Second what kind of baby boomer (minus ones with rocks in there heads) invest there retirement money in a house, especially seen as most already have one, Lets say the Boomer has a 500k nest egg and they go buy a 500k house, that will return 400pw less outgoings, so perhaps 300pw, enough for a round of golf and lunch at the country club.

Now that 500k just sitting in a bank account earning 6pc PA will return 600pw and the cash is there to pay for that hip replacement when its due!

And lets say some baby boomers get sucked in by the Realestate Sharks and buy a 500k "investment" property, I hope they realise they will need to sell this Illiquid asset,even the next day, for atleast 550k just to break even !

Baby Boomers wont be buying investment propertys, theyll be cash/shares and caravans/camperhomes.

 

[Kimosabi]

Are you a realestate salesman by chance?

To state the first obvious, Baby Boomers wont retire enmasse in 2010, some will certainly not all like you seem to imply.

Second what kind of baby boomer (minus ones with rocks in there heads) invest there retirement money in a house, especially seen as most already have one, Lets say the Boomer has a 500k nest egg and they go buy a 500k house, that will return 400pw less outgoings, so perhaps 300pw, enough for a round of golf and lunch at the country club.

Now that 500k just sitting in a bank account earning 6pc PA will return 600pw and the cash is there to pay for that hip replacement when its due!

And lets say some baby boomers get sucked in by the Realestate Sharks and buy a 500k "investment" property, I hope they realise they will need to sell this Illiquid asset,even the next day, for atleast 550k just to break even !

Baby Boomers wont be buying investment propertys, theyll be cash/shares and caravans/camperhomes.

Don't forget, having money in the bank is generally very low risk.

Your logic is... too logical...

 

[money tree]

Now that 500k just sitting in a bank account earning 6pc PA will return 600pw and the cash is there to pay for that hip replacement when its due!

wrong. investing in CASH does not pay out weekly like property. it pays out quarterly at best. how many retirees can live on a small lump sum 4x a year without blowing it in month one? besides that, the taxman will take his half before the retirees even get it. furthermore, cash does not experience capital growth. rates are near the top of the cycle. they will drop again. then hows your plan gonna work?

and what about inflation? $600/wk may seem a lot now but in 20 years?

 

[Kimosabi]

wrong. investing in CASH does not pay out weekly like property. it pays out quarterly at best. how many retirees can live on a small lump sum 4x a year without blowing it in month one? besides that, the taxman will take his half before the retirees even get it. furthermore, cash does not experience capital growth. rates are near the top of the cycle. they will drop again. then hows your plan gonna work?

and what about inflation? $600/wk may seem a lot now but in 20 years?

ING Direct pays Monthly, and low and behold, no fees...

 

[chops_a_must]

wrong. investing in CASH does not pay out weekly like property. it pays out quarterly at best.

Ahhhhhh.... I get paid monthly from my cash account...

 

[money tree]

so lets say they all invest in cash. what are the banks gonna do with it all?

relax the lending criteria, so people will splurge on all kinds of rubbish.........hey presto, INFLATION.......or, they invest the easy money in property.....so we get another property boom.

either way, if your in cash, your screwed.

the only solution is to invest say 30% of that $600/wk into assets that increase with inflation. so how much they got left to live on now? or are they just gonna hope they drop dead before they cant afford the cost of living?

 

[numbercruncher]

wrong. investing in CASH does not pay out weekly like property. it pays out quarterly at best. how many retirees can live on a small lump sum 4x a year without blowing it in month one? besides that, the taxman will take his half before the retirees even get it. furthermore, cash does not experience capital growth. rates are near the top of the cycle. they will drop again. then hows your plan gonna work?

and what about inflation? $600/wk may seem a lot now but in 20 years?

Sorry son but it is you whom is wrong, I have an online savings account thats pays 6pc p/a and divvies up the first day of every month!
So now you're worried about the taxman, for a start he wont be taking half for most retirees, second whats better, half of 300 or half of 600?
Rates are top? says who ?

Heres a little compound interest calculation for you on your 20 year time frame, lets just save the income for ease.

500k in bank at 6pc p/a, compounded (with monthly interest payments) for 20 years (not allowing for tax) 1.66m

Im not advocating cash for long term (but its a hell of a lot better for a retiree), they need shares too, perhaps some gold and silver for inflation hedge.

500k house = crap income and baby boomer will be dead before he sees a decent return. Not to mention unexpected costs, such as Structural problems, White ants, recession, crash, Illiquid asset, Bad tenants, no tenants, Rate increases, stress, worry = early death for baby boomer.

Average Baby boomers wont be buying houses for their "Income" but if you keep telling yourself they will at least you ll believe it?

If you were retired would you tie up your money in an Investment property? Whats the point, why on earth did you spend your life earning money if you're not going to enjoy it! Defies Logic, but keep buying Guys, The state Goverments need that 20k from each Purchase or they'll raise my taxes!

 

[The Red Baron]

ING Direct pays Monthly, and low and behold, no fees...

Even better Bankwest Telenet 6.8% paid monthly, calculated daily, and no fees. Another rate rise and we could be seeing 7%+..

 

[money tree]

Sorry son but it is you whom is wrong, I have an online savings account thats pays 6pc p/a and divvies up the first day of every month!

but you said earlier:

Now that 500k just sitting in a bank account earning 6pc PA will return 600pw and the cash is there to pay for that hip replacement when its due!

so you were wrong........it does not return 600pw. it delivers 2400pm. I was wrong also

compound interest? how they gonna compound it if its already spent?

500k house = crap income and baby boomer will be dead before he sees a decent return. Not to mention unexpected costs, such as Structural problems, White ants, recession, crash, Illiquid asset, Bad tenants, no tenants, Rate increases, stress, worry = early death for baby boomer.

what about rate reductions? asset bubble? inflation? rent increases? tax deductions?

spot the guy who never played Monopoly.

If you were retired would you tie up your money in an Investment property? Whats the point, why on earth did you spend your life earning money if you're not going to enjoy it!

you spent your life earning so you could afford to live when you retire. you seem to think they will all break out into party mode & spend like theres no tomorrow. guess what... there is.

 

[numbercruncher]

Money Tree the point i was making is that cash accounts pay monthly not quarterly but i assume you knew that


Like i said please people keep buying houses because if the Goverment stops getting 20k per house in Duties therell be no option but to raise my taxes.


Buy Buy Buy people !! Retirees im sick of reading those signs you have up in your homes that read "Busy Spending the Kids Inheritance" !!

Dont spend it leave it for us! Well spend it for yah Forget keeping your cash aside for Medical bills, Overseas Holidays and Weekends at the Country Club!

LMAO - Suckers and Houses have made me $$$ too, doesnt change the fact that its now (with exceptions) a deadbeat investment especially compared to other investment opportunitys available, Super perhaps?

 

[Mousie]

Even better Bankwest Telenet 6.8% paid monthly

Only for the 1st year you're a customer

 

[krisbarry]

Kachiinnnggg....another rate rise on the way.

Glad I applied for another 3 credit cards and bought 40 Ipods just to raise the inflationary pressures

Did someone say housing crash...yep I can feel it in my bones

 

[Kimosabi]

Kachiinnnggg....another rate rise on the way.

Glad I applied for another 3 credit cards and bought 40 Ipods just to raise the inflationary pressures

Did someone say housing crash...yep I can feel it in my bones

Wow, all that money I've got in the bank is going to make me even more money...

The next boom is going to be in my bank account when Interest Rates go back up to 10%+

 

[robots]

hello,

I will enjoy the interest as well

goodluck

robots

 

[numbercruncher]

hello,

I will enjoy the interest as well

goodluck

robots

You should be rapt about the impending realestate bust then Robots youll be able to go snavvle up a bunch of bargains along with us !!

Long live the Bust ! Hip Hip!

 

[robots]

hello,

is the bust actually here yet?

let me know the day it starts

goodluck

thankyou

robots

 

[Kimosabi]

hello,

if the bust actually here yet?

let me know the day it starts

goodluck

thankyou

robots

It'll be coming to a town near you...

We'll probably have to wait a year or two until the US Bust flows through to the Chinese and then to our economy...

I don't know if anyone noticed, but the US has started imposing Tariffs on Chinese imports...

 

[robots]

hello,

more waiting

you got it all wraped up by the sounds of it

wonderful, you with Macquarie bank yet?

thankyou

goodluck

robots

 

[numbercruncher]

haha it seems to be getting so desperate in the US that theyve even found a silver lining .....

Values drop, so can taxes
Your home is worth less, but there's a bit of a silver lining: Your property bill may fall.
Gregory J. Smith, assessor, recorder and county clerk for San Diego County, offers an example: You bought a house in 2005 for $400,000 and today its price would be $325,000 ”” a $75,000 reduction. The tax reduction would be 1% or about $750, Smith said.

http://www.latimes.com/business/la-...y?coll=la-mininav-business&ctrack=2&cset=true

Woo Hoo so you lost 100k after fees but dont worry, youll save your self 750 on Tax!! lol clutching at straws anyone ?