I would not agree that a house is a consumable. Certainly the population does not feel that way.
Land can also be considered a hedge against inflation because there is a limited amount of it.
Sorry when I said "house" what I really meant to say was "Real Estate". Yes improvements upon land are depreciating items. The value attributed to improvements upon land are not what we are talking about in this thread. If you want a brand new house you will pay the cost of construction plus reasonable profit to the builder, and once you purchase the improvement it will slowly depreciate.
We are really talking about land values here, or in the case of apartments "space" value. It is not a consumable, and it is a hedge against inflation.
In a way improvements are also a hedge against inflation, if there is inflation in the future the replacement cost of your improvements will increase giving you more current bang for your future buck.
The problem is your "improvements "are only improvements in your eyes, to someone else they may be just something else to knock over.
Also where you say apartment '" space" value, it is no different to a house. Eventually the apartment becomes dated and will be knocked over. It only has value while it is seen as a desirable "box"to live in or rent. Once it becomes dated it is just another apartment block that provides cheap housing.
Like was stated, it is land where the value is, unless you are on a riverina flood plain in Queensland.
Actually in your first paragraph you say improvements slowly depreciate.
Then in your last paragraph you say improvements are an edge against inflation.
I guess it will teach me to read more carefully before I wear my finger out with 1 finger typing, replying to contradictions.LOL
Really? What were the details of the car and over what period of time did you make this profit?I also made money on a $2,500car which went to 200K in the easy credit bubble.
Really? What were the details of the car and over what period of time did you make this profit?
Improvements are the legal term for constructed buildings such as house, garage, shed, ect.
Improvements are a hedge against inflation in the same way that the purchase of any physical valuable item can be, if the depreciation of the item is less than forecast inflation.
For example if I was expecting high inflation over the next 5 years, perceivably the house I want could cost $250k today, but $300k in two years. However the depreciation to the value of the improvements is going to be negligible. In this case you would have hedged yourself against inflation, saving yourself 50k.
Also clearly apartment "space" value is a valid concept, the consumable proportion of your initial outlay is possibly larger than a house and land package but there is still a value there that is tied to the land value of the apartment block, a value that is tied very closely to the location of the apartment. Even if it becomes economical to knock down an old apartment building (after what, 40 years?) then as a strata title holder you are entitled to a percentage of the land the apartment building is built on.
Don't assume that the only thing you have to learn from others is when to save your finger from the fatigue of dosing out that high quality internet opinion of yours!:
According to the media and the real estate industry there is a rental crisis, so how come there are so many empty property's? and why such disinterest, small numbers of inspectors. :dunno:
Also if we look at the 4 bed house in Lane Cove and assume a value of around 800K (its a very old crappy house) then consider the rent of $650 p/w that gives us a gross yield of around 4.3% ~ take out expenses and we are looking at less than 4% yield..maybe as low as 3.5%its woeful and thus as an investment, it only makes sense if there is at-least 4% annual capital growth.
Its a real ponzi isn't it....someone has to pay more than you did or it all falls apart.
So what's your solution for those who are trying to create wealth? Obviously not property. What are the alternatives and how do they stack up?
Well aware of this (although, arguably the "individuals ability to throw money at those opportunities" should be higher since the entry costs are far lower than direct property).Lots of lower risk money making opportunity's in the stock market, in fact its only the individuals lack of understanding etc that limits the potential, of course returns are also limited by the individuals ability to throw money at those opportunity's.
I see that the Flogs on here have gone underground, whilst Aust. Property and Retail Market is crumbling around it. God help those First Home Owners in this crisis, they'll need a bailout just to get through this mess. The Government has blood on it's hands.
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