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The future of Australian property prices

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robots said:
hello,

i thought we might of been able to able to get part 37 of the "real terms" explanation for a bit of entertainment tonite
oh well
Click to expand...

Ok we now both have Mr.Z on ignore. Fire away! I'm still here.....
 
robots said:
just amazing the amount of research people put into such a poor performing asset class, oh well
Click to expand...

It is only a poor performing asset class if you believe it goes up every year Botty.

The chart below shows you would have averaged 3.4% annual growth over the 10 years to 2000, for a Brisbane property.




High inflation and rates through that decade (the 90s) saw the internal rate of return go backwards, as it did in the early 80s. The plot below is 1980 to 2010.





Guess what the All Ords did over the same period?

One day I'll convince you a timing model is better than buy and hold.
 
shush, not now Z.

waiting for Robot to explain why he thinks property will keep up in real terms
 
SusanW said:
One day I'll convince you a timing model is better than buy and hold.
Click to expand...

Most people don't get that property works because it is a leveraged bet that inflation will continue, a safe bet under most circumstances. However big valuation multiples at the bottom of a long term rate cycle is something I find a little scary.

Yes... a time and place for every investment. I want performance not religion and right now it still looks like there are better places to be.



MR. on my best.... promise.
 
Hi SusanW. Do you envisage mortgage interest rates to exceed 10% by 2012? Appears chart wise the uptrend is strengthening. ??
 
Wysiwyg said:
Hi SusanW. Do you envisage mortgage interest rates to exceed 10% by 2012? Appears chart wise the uptrend is strengthening. ??
Click to expand...


You didnt ask me .... so heres my opinion

13%(or roundabouts ) before this cycle is complete in my uneducated, unbiased and property holding opinion.

Notice i said cycle instead of giving a timeframe
 
Wysiwyg said:
Hi SusanW. Do you envisage mortgage interest rates to exceed 10% by 2012? Appears chart wise the uptrend is strengthening. ??
Click to expand...

I'd say a 45% probability. The asx implied yield curve has been reasonably accurate in the past, and they are only forecasting 2 x 25bp by mid 2012.

the greater risk is a tightening of foreign credit, which means higher funding costs for our lenders.

I don't know which chart you are referring to. The first is capital growth, and it has peaked and is coming down.

The second is IRR. As one holds property longer, rising rent contributes more and more to +CF and IRR.
 

I was fortunate enough to pick the commodities run in response to anticipation of QE2. Risk adjusted rewards have been profoundly higher than any passive property deal I could have secured in that time. Money velocity features heavily in my investment philosophy.

 
sinner said:


potential investment property investors all of 3% over 2 years if they started paying attention in Sep 2008?

For those that bought in Sep 2008 with an eye to flip in Sep 2009, I only have the rude finger.
Click to expand...

Huh? Quarterly change would be compounding! You trying to confuse Robots?

Here ya go:
View attachment Doc1.pdf

I've waited long enough for Robots tonight, need some shut eye.
 
SusanW said:
Click to expand...


What’s so bad about that chart?
Even in 2000 property was increasing at approx’ 3.5% that would mean property kept up with inflation.

What does it mean “10 year rolling”? In 2000 you could say “for the past 10 years property increased by approx 3.5% per year” That would be keeping up with today’s inflation so what’s the big deal?

Do I read this chart correctly?

So in 1990 I can say “property over the past 10 years has increased by near 10% per year”
In 2000 I can say “property over the past 10 years has increased by near 3.5% per year”
Hang on!

I’ll look at it one year at a time!
In 1990 I can say “property over the past 10 years has increased by near 10% per year”
In 1991 I can say “property over the past 10 years has increased by near 8% per year”
So 10% over 10 years and in one year alone property changed from that 10% to 8% for “all those years!”

This chart doesn’t look as good now. That’s Brisbane. How’s Melbourne?
 

hello,

exactly man, just plenty of people around who cannot afford a property because they spend their money on other things

oh well, thats the decisions people make

no bubble,

thankyou
professor robots
 
robots said:
hello,

exactly man, just plenty of people around who cannot afford a property because they spend their money on other things

oh well, thats the decisions people make

no bubble,

thankyou
professor robots
Click to expand...

What your saying is ludicrous, housing is 8X medium income now compared to years ago which means your parents had to save allot less than you have to purchase a property today.

And you claim there is no bubble, lol now i know you have no idea. A bubble is a large increase in prices which has happened, but that does not necessarily mean the bubble will burst. There are lots of asset classes in bubbles but that does not mean they can't continue to inflate more it just means they exist.

Also a bubble is not always a bad thing, a bubble can take years between the time it inflates and when it deflates and allot of money can be made in-between.

Can you provide any evidence at all to suggest there is no bubble at all?
 
hello,

yes, see post 3634, as mentioned the return is a mere 3.4% per year

oh yeah, back in 1960, 1970, 1980 people were buying houses like a pack of fags at the milkbar

its just today people spend all their money, oh well

thankyou
professor robots
 
robots said:
its just today people spend all their money, oh well

thankyou
professor robots
Click to expand...

Don't use today tonight/current affair as your source of what the population are doing lol

Those single mums they show everyweek who loaded up on 40 months intreat free junk at harvey norman and are now being forclosed on and blame the banks for giving them the loan meanwhile they unload there furniture in a brand new 4X4 are not the real population lol.

Also your only refering to Brisbane prices, what was the Melbourne rise in 2008 / 2009? since you live in Melbourne.
 
hello,

2008 and 2009 were fantastic years bro,

i wonder what the the 20, 30, 40 yrs figures are, probably like brisbane

no bubble, its official

thankyou
professor robots
 
robots said:
fairly embarrassing for the RBA
Click to expand...

How is this embarrassing?

Oh, I keep forgeting that they hire idiots for the RBA board with no understanding, education or experience in economic matters.

Maybe Robots and Kincella should try and get on the board.

Cheers
 
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