I have given up buying a house
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my point was that you cant quote someone on something they didnt actually sayFlathead Flick said:
yes it is an unrealised profit but as my post suggests its going to stay that way for quite some time. So I dont care what will happen over the next 12 months or so. I know my area fairly well and I know how much it has already droped before I bought, I doubt its going much further.
Like I said, for you to come in and say that I, as well as everyone else that owns property, will lose huge amounts over the next 2 & 5 years (C'mon now, which one is it... 2 or 5 years
) In my case to the tune of $30000+, is a joke. Have you ever been to my area? as well as everyone elses?A song for you Donald Fisher (flathead)
Sing it with me everyone:
Ive been everywhere man
I've been everywhere....
cheers
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Thought some of you may be interested in these articles:
By the way, good post Mofra.
cheers
To read the whole Article click here http://www.domain.com.au/Public/Article.aspx?id=1163266684406&index=NationalIndex
By the way, good post Mofra.
cheers
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Good point but the share market can also do the opposite in a week.
I like both investments.
cheers
I like both investments.
cheers
agree, i love the share market, but i bought a house to live in 2 years ago.
the reason...
markets go up..., markets crash...
your nett worth is in the end, a bunch of electronic numbers on your statement...!
inflation can mean in a few years 300k will get you next to nothing...
till you turn it into something tangible, like a 300k ferrari, or a 300k house, that is all it is.....
and your own 300k house to live in, even if it is worth 200k the next year, just like the 300k ferrari, which will be worth 200k when your drive it off the lot, is a lot more enjoyable than reading an electronic statement!
its real!
the reason...
markets go up..., markets crash...
your nett worth is in the end, a bunch of electronic numbers on your statement...!
inflation can mean in a few years 300k will get you next to nothing...
till you turn it into something tangible, like a 300k ferrari, or a 300k house, that is all it is.....
and your own 300k house to live in, even if it is worth 200k the next year, just like the 300k ferrari, which will be worth 200k when your drive it off the lot, is a lot more enjoyable than reading an electronic statement!
its real!
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The Mint Man said:A song for you Donald Fisher (flathead)
Sing it with me everyone:
Ive been everywhere man
I've been everywhere....
cheers
Thanks for the song Skint Man - I'm touched.
Your mistake is that you're getting emotional about your investment. Easiest way to lose money. Rather than just saying what you hope will happen, perhaps you should do a little research and see what some of the leading economists and strategists are saying about the property market. Or you could just keep flapping away. And yes, I have been the the Central Coast - you're one of the areas that will be hit the hardest when rates rise and unemployment rises.
While you're at it, you can pretty much ignore everything that anyone with a vested interest in property says, e.g. real estate agents, property councils, real estate institutes, property mags (who make their money from advertising and the more buoyant the market, the better).
Check out this link for some info from Shane Oliver, who happens to know a thing or two about property.
http://www.amp.com.au/display/file/...6,00.pdf?filename=olivers_insights_230206.pdf
I've given you a taste of it below:
"Australian housing remains very overvalued.
Australian house prices remain extremely high relative to average weekly wage earnings. They need to fall about 20% for the ratio of house prices to wages to return to more normal levels.
House prices need to fall about 28% to bring the ratio of house prices to rents (the PE ratio for housing) back to its long-term average (after adjusting for inflation)."
Dr Shane Oliver
Head of Investment Strategy and Chief Economist
AMP Capital Investors
24th August 2006
tech/a
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Flathead Flick said:
Thought you were a lender at one time? No wonder most of your clients complained about losing money.
Whats the point of all this "The sky is falling" on Real Estate stuff!
You want to be seen as a leader in forward thinking?
Hell you should have started forward thinking back in 1996.
Then youd have had an opportunity to be wealthy in your own right.
He's a damned Economist which makes him a pretty poor model for a RealEstate of any other type of investor.Too conservative.
You obviously watched it all pass you buy.
My comiserations!
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tech/a said:
Wow, you seem to know a lot about me...funny, I thought I had bought and sold property before...
Just because I don't like property now, doesn't mean I didn't like it previously. Sure, it had its run, which I took advantage of, but you're living in the past if you think it's a good investment now.
And if you argue that you can't get the leverage you can get with property anywhere else, you're wrong. CFDs will allow you as much, if not more, leverage than you can get with property, on just about anything you like.
At the end of the day I'm not really that fussed whether you stick with property or not. You're tying up good money you could have elsewhere, but hey, we all have our own investment choices, and that's obviously yours. You and Skint Man can defend it all you like, but it isn't going to change the economic fundamentals underpinning the likely scenario that the best case scenario is that it won't even beat inflation over the coming years. And if you also think that it's not going to go up, but just sit, then don't call it an investment - it's a lifestyle choice.
tech/a
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Your look is single minded.
There are more ways to making a profit in R/E than buy and hold or flip.
Ive been a developer for many years and will remain so.
There are a few of us around.
Still interested
Why the continual posts on Real Estate doom and gloom?
Got any positive ways you can make a quid in R/E.
Or just-----Your a nutter if you consider R/E now?
BTW you can still positively gear property in most areas of AUST.
There are more ways to making a profit in R/E than buy and hold or flip.
Ive been a developer for many years and will remain so.
There are a few of us around.
Still interested
Why the continual posts on Real Estate doom and gloom?
Got any positive ways you can make a quid in R/E.
Or just-----Your a nutter if you consider R/E now?
BTW you can still positively gear property in most areas of AUST.
tech/a said:
Exactly... what is the point of all these doom and gloom posts on RE!
this ain't today tonight or a current affair where your trying to get ratings!
Besides, there is a severe shortage of infrastructure equipped land around the country... Govt's are no longer going to pay for this, so its up to the developer...
So, house and land packages have gone up in price cause of supply costs...
And for those talking about yield... well, rent is already on the way up!
Every market situation presents an opportunity...
Thats what this forum should be about...
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Ok, fair enough. But I think your mad or blind one of the two. I'll leave that at that.Flathead Flick said:
However you failed to answer my other question which was:
as well as everyone elses? You have already said that the Australian RE market is going to go down big time so you obviously have a deep understanding of each RE market in each city, suburb and state?
As I said way back, I think that you generalise too much when you basically say RE is doomed, going down everywhere Full Stop... as there is value in all asset classes at any stage, be that up, down or sideways.
Cheers :jump:
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Update...well I checked my superannuation account balance just yesterday and I noticed I had receiced the $1,500 super co-contribution from the government. That was a nice early Xmas present.
I must also add that the Aussie market has been running hard of late, and will again today.
Glad I have a geared fund in Australian shares, adds significant profit to what has been a very bullish year.
Property or super?
I will take the super thanks...
Poor buggars in Sydeny sitting on massive losses in the property market, but I must not be biased....as plenty of Perth residents have made squillions.
I must also add that the Aussie market has been running hard of late, and will again today.
Glad I have a geared fund in Australian shares, adds significant profit to what has been a very bullish year.
Property or super?
I will take the super thanks...
Poor buggars in Sydeny sitting on massive losses in the property market, but I must not be biased....as plenty of Perth residents have made squillions.
The value of property investment really does depend on the economic conditions. At the moment, we have had 3 interest rate rises this year and the economy has slowed as a result, which will hopefully take the heat off any further interest rate increases.
It is true that in some parts of Sydney, in particular the South Western areas, that property values have dived. Interest rates have really taken their toll on these folks with a large number of mortgagee sales.
The problem overall is that during the boom periods, with interest rates at record lows, they have borrowed too much (up to their eyeballs in most cases). Therefore they are particularly susceptible to any interest rate increases.
The other major problem facing them is that simply income has not kept pace with the rise of property prices. This is not such a big problem when interest rates are low, but when interest rates are rising, it is a HUGH problem.
Without the assistance of a low interest rate environment, the only way in which property prices can rise is if income grows, so that people can borrow and repay more. Without income growth, there is simply no “fuel to light the fire” beneath property prices. The gap between income and property prices have expanded in the last few years.
What about the yield on investment properties ? At present, the rental yield (in Sydney at least ) is sweet F all, at a measely 2 – 2.5%, compared to interest rates of approx 8%. This means that that the price of houses have to rise 5.5% to 6% just for you to break even (not withstanding negative gearing etc etc). If property does not rise, you are behind from day one.
Right now, as things stand, I do not believe that it’s a good time to invest in property. There is simply no fuel to burn. The big caveat to that statement is if there is a big stock market correction (heavens forbid) and investors who have made a s***load of money withdraw from the stock market and park it into the property (ala 87 crash). If that happens, there will be plenty of fuel to light up the property market.
Finally, the recent interest rate increases were meant to target the growth states of WA and QLD. The unfortunate part of it all is that the Reserve Bank has such a blunt instrument that in trying to rein in WA and QLD, everything else gets hammered. This is especially bad for NSW as the economy was already rats*** before those interest rate increases, who knows where it will end up when the full effect of those interest rates come on song.
Property may be a good investment in other states of Australia, not so good in NSW.
Just my
It is true that in some parts of Sydney, in particular the South Western areas, that property values have dived. Interest rates have really taken their toll on these folks with a large number of mortgagee sales.
The problem overall is that during the boom periods, with interest rates at record lows, they have borrowed too much (up to their eyeballs in most cases). Therefore they are particularly susceptible to any interest rate increases.
The other major problem facing them is that simply income has not kept pace with the rise of property prices. This is not such a big problem when interest rates are low, but when interest rates are rising, it is a HUGH problem.
Without the assistance of a low interest rate environment, the only way in which property prices can rise is if income grows, so that people can borrow and repay more. Without income growth, there is simply no “fuel to light the fire” beneath property prices. The gap between income and property prices have expanded in the last few years.
What about the yield on investment properties ? At present, the rental yield (in Sydney at least ) is sweet F all, at a measely 2 – 2.5%, compared to interest rates of approx 8%. This means that that the price of houses have to rise 5.5% to 6% just for you to break even (not withstanding negative gearing etc etc). If property does not rise, you are behind from day one.
Right now, as things stand, I do not believe that it’s a good time to invest in property. There is simply no fuel to burn. The big caveat to that statement is if there is a big stock market correction (heavens forbid) and investors who have made a s***load of money withdraw from the stock market and park it into the property (ala 87 crash). If that happens, there will be plenty of fuel to light up the property market.
Finally, the recent interest rate increases were meant to target the growth states of WA and QLD. The unfortunate part of it all is that the Reserve Bank has such a blunt instrument that in trying to rein in WA and QLD, everything else gets hammered. This is especially bad for NSW as the economy was already rats*** before those interest rate increases, who knows where it will end up when the full effect of those interest rates come on song.
Property may be a good investment in other states of Australia, not so good in NSW.
Just my
While I prefer shares over property, I do have a ppro that I am currently building and thanks to booming WA market, has increased $200,000 in past 6 months. That is the beauty of property. It is unpredictable. As an investment though, I have decided to buy one investment property next year in a seaside suburb on the south coast of NSW as this will be where I retire. The rental returns in WA now compared to what you are paying for a property are extremely poor.
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Currently have $33,000 which is pretty much the average for a 32 year old.
By 65 it should be well over $3 million, (using superannuation calculator) which in todays dollars will be around $1 million, enough for a small house and a pocket full of change to throw on the market.
(Current returns still over 35% per annum)
By 65 it should be well over $3 million, (using superannuation calculator) which in todays dollars will be around $1 million, enough for a small house and a pocket full of change to throw on the market.
(Current returns still over 35% per annum)
Stop_the_clock said:
Nice one! Myself and my wife (both 25yrs old, work fulltime and have 2 kids aged 6 and nearly 3) plan to retire on roughly $4 million in super (approx 1.2mil in todays dollars), as well as fully own our own home.
We are currently paying additional contributions after tax (not too much at the moment, just enough to claim as much co-contribution as we can) and are currently getting ourselves into position to buy our 1st home in approx 12 months time.
My personal view on what you are doing, I think it is good that you have established yourself a long term goal, and are going all out to achieve it. What ever makes you happy is the main thing. Sure people could say you could cark it before you even see the money, but I doubt that you would be sitting up on cloud 9 regretting pumping your money into super as your financial plan. You know what I mean?
I suppose if it is a risk you are willing to take, then why not? Its your life and your money. You do what you want with it. I know when my wife and I retire that we will be having the time of our lives providing we are in good health. If it all turns sour with our health, then at least I know my son and daughter will be given a good boost financially.
BTW - Good thread! Some very good reading in here thats for sure.
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Well done with you savings plan.
This coming week I will be depositing a further $600 into my super, some of which is share trading profit and the rest is my own money.
So yes its very true that I may die b4 reaching retirement, but the chances are much higher of living well into my 70's and 80's.
Will Centrelink exists in 33 years time to pay my pension...who knows?
I reckon any money saved now is a nest egg for the future.
There are so many worse places to stash my cash...I could gamble it away on the pokies, piss it up against a wall (urinal) after hitting the booze, choke up a lung or two with a packet of ciggs a day or shoot up in a back alley with the latest party drug.
This coming week I will be depositing a further $600 into my super, some of which is share trading profit and the rest is my own money.
So yes its very true that I may die b4 reaching retirement, but the chances are much higher of living well into my 70's and 80's.
Will Centrelink exists in 33 years time to pay my pension...who knows?
I reckon any money saved now is a nest egg for the future.
There are so many worse places to stash my cash...I could gamble it away on the pokies, piss it up against a wall (urinal) after hitting the booze, choke up a lung or two with a packet of ciggs a day or shoot up in a back alley with the latest party drug.
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