The future of Australian property prices

[Tysonboss1]

Buying Land is like a casino token it has no value like Gold .
You pay for land or a token and speculate you will make more than the seller some times you do,
Like any gambling or have to know the profit is maxed out and bail out.

Hahaha,... you can't be serious.

i aggree about Gold but it is far more speculative than real estate, Gold has absolutely no value apart from the hope that some one will give you real assets or goods for it in the future.

Offcourse you can gamble on the future price of any asset Gold, real estate, shares, even oil and wheat.

But Gold is not an investment grade asset, income producing realestate is.

 

[KurwaJegoMac]

Buying Land is like a casino token it has no value like Gold .
You pay for land or a token and speculate you will make more than the seller some times you do,
Like any gambling or have to know the profit is maxed out and bail out.

Disagree with you there. It has value else it would be worth nothing. Same as your casino token, it has value - whatever it says on the face of the token next to the $ sign. Now whether said token, gold or land is worth the amount paid for it is another question entirely.

Also one cannot generalise that everyone buying property is 'gambling'. What an absurd thing to say - what about the fact that 70% of people in Australia are owner occupiers? I'm sure they all bought their houses for speculative gain, it's not like anyone needs a roof over their head or anything

What's dangerous is when you have people who approach investing like they do a casino, I certainly hope you're not that sort of person since you appear to correlate the two.

 

[KurwaJegoMac]

Hahaha,... you can't be serious.

i aggree about Gold but it is far more speculative than real estate, Gold has absolutely no value apart from the hope that some one will give you real assets or goods for it in the future.

Offcourse you can gamble on the future price of any asset Gold, real estate, shares, even oil and wheat.

But Gold is not an investment grade asset, income producing realestate is.

+1 well said, better than my shoddy attempt :

 

[satanoperca]

Thought this was interesting coming from ANZ.

The good news for homeowners is that AMP Capital chief economist Shane Oliver and Grattan Institute program director Saul Eslake - the ANZ's chief number cruncher for close to 14 years - say Victoria will avoid a US-style property crash which saw prices plunge by 30 per cent.

Instead, house prices will continue their single-digit slide into 2012 before stagnating for five to 10 years as wages catch up with a median house price which has climbed 133 per cent since 2000.



Read more: http://www.news.com.au/money/proper...ne/story-e6frfmd0-1226091470380#ixzz1Rljq5rGh

So holding a NG property with 0% capital growth for 5 years seems very unappealing.

Cheers

 

[Tysonboss1]

Thought this was interesting coming from ANZ.




So holding a NG property with 0% capital growth for 5 years seems very unappealing.

Cheers

NG property is never really over appealling for me

 

[trainspotter]

Thought this was interesting coming from ANZ.

So holding a NG property with 0% capital growth for 5 years seems very unappealing.

Cheers

An NG property is done for tax purposes and not for capital gain. It is to offset your taxable income and CG is a bonus. Funny how the ANZ guru agrees with me !

 

[wayneL]

An NG property is done for tax purposes and not for capital gain. It is to offset your taxable income and CG is a bonus. Funny how the ANZ guru agrees with me !

So we lose $100 to save ~$50 tax, never mind cap gain?

 

[Glen48]

In 10 years time walk in to a shop with your title deeds and see what you can buy, the shop keeper will be serving the man with gold or silver.

Different periods of time dedicate what is rising or falling, land has had its day and will be a long time before you see prices like this again.

42 empty shops on the strip on the Sunshine coast has to be telling you some thing is not right.

 

[satanoperca]

An NG property is done for tax purposes and not for capital gain. It is to offset your taxable income and CG is a bonus. Funny how the ANZ guru agrees with me !

Sorry TS, you have lost me. If the investment looses money and there is no ppreciation in the asset value over a period of time, it is still a bad investment, regardless if you get a little back on you tax.

Cheers

 

[KurwaJegoMac]

Sorry TS, you have lost me. If the investment looses money and there is no ppreciation in the asset value over a period of time, it is still a bad investment, regardless if you get a little back on you tax.

Cheers

Remember it's not always about the asset value appreciating - don't discount the cash flow (i.e. rent returns). If you have a positively geared/positive cashflow property then any CG is a bonus. You can be negatively geared with positive cashflow so that 'little back on your tax' makes all the difference.

That being said, reading that article they anticipate flat prices in line with inflation so no 'real growth'. Effectively if you purchase a property with positive cashflow you have an investment with an inflation hedge + automatic increase in your earnings from day 1 with a chance of CG (holding over 30 years I like my odds of that eventuating). What's not to like?

Being pedantic:

Saul Eslake was the former chief economist at ANZ, so his view does not express that of the bank. The bank is unlikely to come out with such an article due to self-interest.

and;

The investment loses money, not looses. lose = give up, loose = not tight.

Some constructive criticism - I welcome any who would provide such feedback too.

 

[KurwaJegoMac]

In 10 years time walk in to a shop with your title deeds and see what you can buy, the shop keeper will be serving the man with gold or silver.

Different periods of time dedicate what is rising or falling, land has had its day and will be a long time before you see prices like this again.

42 empty shops on the strip on the Sunshine coast has to be telling you some thing is not right.

The shopkeeper can't eat gold, use it as shelter, let alone use it for anything but sitting under his mattress.

With land one can provide shelter - when push comes to shove you think a person would choose a gold bar over shelter?

 

[trainspotter]

So we lose $100 to save ~$50 tax, never mind cap gain?

For taxation purposes only you understand. The asset remains the same value (less depreciation) on your P & L. Only realise a loss when you sell of course.

It depends on WHY you are investing in RE.

 

[Tysonboss1]

In 10 years time walk in to a shop with your title deeds and see what you can buy, the shop keeper will be serving the man with gold or silver.

.

Nope, He'll be serving the guy with cash or a debit card. What ever the median of exchange is I will be walking into the shop holding the weekly rent payment, not slicing off a piece of capital like a gold horder would have to do.

 

[medicowallet]

The shopkeeper can't eat gold, use it as shelter, let alone use it for anything but sitting under his mattress.

With land one can provide shelter - when push comes to shove you think a person would choose a gold bar over shelter?

BUT gold here is the same as gold everywhere. I assume you are disregarding its worth in an investment portfolio, and its value to central banks.

Of course you can go to the argument about shelter!! Can housing be used in electrical components? Come on....

Remember it's not always about the asset value appreciating - don't discount the cash flow (i.e. rent returns). If you have a positively geared/positive cashflow property then any CG is a bonus. You can be negatively geared with positive cashflow so that 'little back on your tax' makes all the difference.

That being said, reading that article they anticipate flat prices in line with inflation so no 'real growth'. Effectively if you purchase a property with positive cashflow you have an investment with an inflation hedge + automatic increase in your earnings from day 1 with a chance of CG (holding over 30 years I like my odds of that eventuating). What's not to like?

Being pedantic:

Saul Eslake was the former chief economist at ANZ, so his view does not express that of the bank. The bank is unlikely to come out with such an article due to self-interest.

and;

The investment loses money, not looses. lose = give up, loose = not tight.

Some constructive criticism - I welcome any who would provide such feedback too.

I like this quote of yours, filled with an ideal world of ideals

I can assure you, that house prices CAN fall. Look at America (insert "we are different" quote)

I can assure you that rent prices are stagnant in Australia (and hence falling) (insert "not in my suburb" quote)

I can assure you that any sane investor does not agree with your point that CG is a bonus, CG is essential to prevent inflation killing your investment, and BTW for an investment property, CG has to be above inflation to break even on that component (insert expectation of explanation quote)


I will, however ask one explanation from you.

Explain how to have positive cashflow AND negative gearing, and please include all outgoings..... awaiting reply on this maestro. Please show me this being maintained, and better than investing in a bank!.

 

[Dowdy]

The shopkeeper can't eat gold, use it as shelter, let alone use it for anything but sitting under his mattress.

With land one can provide shelter - when push comes to shove you think a person would choose a gold bar over shelter?

Gold is looked at as a currency. It's liquid, easily tradeable, transportable, accepted everywhere and traded for anything. It's an inflation hedge PLUS we have a commodities boom, hence it makes a good investment (silver is better though)

A home is purely an asset (in the eyes of the investor) but it's illiquid and in the start of a slump.

 

[Tysonboss1]

BUT gold here is the same as gold everywhere. I assume you are disregarding its worth in an investment portfolio, and its value to central banks.
.

Gold is the "snugggie" of the investment world, It's sold on late night TV and if you buy it you'll look like a fool.

I don't think gold has a place in an investment portfolio, Its not an investment grade asset.

At best it is a speculative play banking on it's price going up.

Offcourse their is the arguement that it is a hedge against inflation which it may be unless you buying it at a 100 year high,... and receiving no income.

Heres the thing, All real assets provide a hedge against inflation while also producing income, Gold is usless an investment.

 

[Glen48]

Water is the most important commodity,a glass of water in a wasteland is worth more than Gold . Food is next, medicine, clothing. fire, fire arm's then shelter. A piece of gold will get you all of these a Gold Coast 19 acre beach front block wil not in a depression.
This is what a block of land will be worth in 10yrs.

.http://www.kcet.org/socal/2008/09/foreclosure-alley.html

 

[Tysonboss1]

Water is the most important commodity,a glass of water in a wasteland is worth more than Gold . Food is next, medicine, clothing. fire, fire arm's then shelter. A piece of gold will get you all of these a Gold Coast 19 acre beach front block wil not in a depression.
This is what a block of land will be worth in 10yrs.

.http://www.kcet.org/socal/2008/09/foreclosure-alley.html

In a completely failed economy, which is what you are describing even a bar of gold loses it's value. A piece of gold that is worth 1000 dollars may buy you a sack of potatoes, but if you believe that is going to happen then you have lost all hope and should probably put you tin hat on and start digging a bunker

 

[trainspotter]

BUT gold here is the same as gold everywhere. I assume you are disregarding its worth in an investment portfolio, and its value to central banks.

Of course you can go to the argument about shelter!! Can housing be used in electrical components? Come on....

I like this quote of yours, filled with an ideal world of ideals

I can assure you, that house prices CAN fall. Look at America (insert "we are different" quote)

I can assure you that rent prices are stagnant in Australia (and hence falling) (insert "not in my suburb" quote)

I can assure you that any sane investor does not agree with your point that CG is a bonus, CG is essential to prevent inflation killing your investment, and BTW for an investment property, CG has to be above inflation to break even on that component (insert expectation of explanation quote)

I will, however ask one explanation from you.

Explain how to have positive cashflow AND negative gearing, and please include all outgoings..... awaiting reply on this maestro. Please show me this being maintained, and better than investing in a bank!.

Ahhhhhhhhhhhhhh I have been waiting for Doctor Wallet to return in full tilt.

Yes yes yes gold is used as an economic leveller amongst central banking fraternities. *YAWN* It is called the gold standard. Has nothing to do with mortgages or real estate values *STRETCH* There needs to be an required equilibrium and GUESS WHAT ?? Gold is the standard. *ROLLS OVER* Ho hum ........... *FEIGNS SLEEPINESS*

Look,,, Look Dr Seuss ,,,,,,, It happened in America ....... must be the same in Australia. Get a grip on reality here for once. Read what has been written for thousands of posts ....... AINT GONNA HAPPEN. Read the posts as to why not.

Negative geared property was sold as a TAX DEDUCTION. Nuffin to do with CG.

If you are unhappy with my summation I am more than happy to come and check out your portfolio (at my expense of course) and advise you of the errors of your ways.

 

[Uncle Festivus]

Gold is the "snugggie" of the investment world, It's sold on late night TV and if you buy it you'll look like a fool.

I don't think gold has a place in an investment portfolio, Its not an investment grade asset.

At best it is a speculative play banking on it's price going up.

Offcourse their is the arguement that it is a hedge against inflation which it may be unless you buying it at a 100 year high,... and receiving no income.

Heres the thing, All real assets provide a hedge against inflation while also producing income, Gold is usless an investment.

All of that is just plain incorrect. Gold is a currency. Right now, in gold terms, the fiat currencies of the world are collapsing - the Euro, Yen and almighty US dollar are sinking under the weight of insurmountable debt.

I have made more from gold, in percentage terms, than any other investment (and still growing).

Gold will continue to be the 'store of value' of last resort. Right now the equity markets are about to collapse from the global debt contagion - all down over 1% as of tonights trading.

Recent data from China suggests that they too have understated their (bad) debt levels and actual inflation rate ie a slowdown is coming, only the severity is unknown, and all that implies for Australia.

And with that, Australian real estate will finally get the real crash all the realists have been predicting on here for a while now. The only reason why we haven't taken a hit is that the various economic stimulis programs, funded by ever growing debt, have enabled the ponzi to be kicked down the road just that little bit longer.

How liquid will your real estate be when everyone starts heading for the exits? I know my gold will be tradable for everything I need, even your heavily discounted property........

As we all know, the Australian property market peaked well over a year ago when Robots bought his last IP