The future of Australian property prices

trainspotter said:

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.

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Then analyse the data to see why it will happen. It's called globalisation - if China gets a cold Australia will get the flu etc If the US gets another recession the whole world gets a recession, including us.......Mr Market is about to be shown up as being seriously wrong.....

Tysonboss1 said:

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.

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A lot of fools have made a lot of money over the past 10 years investing in gold.

medicowallet said:

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....

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I certainly am not disregarding its worth in an investment portfolio. Gold and other precious metals are needed in many high-tech devices we use today, they will always be an asset. What my point is, is that if we hit a major depression I'd rather have a cash generating asset that provides a fundamental need (shelter) than metal. I can always make use of the shelter and rent it to others in exchange for goods, services and whatever medium of exchange is being used at the time.

Before anyone jumps down my throat again, i'm not saying gold is useless as a medium of exchange and that it will be useless in a depression, all i'm saying is i'd rather a house than gold.

medicowallet said:

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

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An 'ideal world' for you is a property growing in value exactly in line with inflation? I hardly call that ideal but each to their own. I provided a situation based on the premise of the article (that house prices will not experience 'real' growth and that growth will be in line with inflation). Ideally we'd be getting CG above inflation, increasing rents and decreasing expenses. Now that is ideal

medicowallet said:

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

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Thank you for your assurance.

However nowhere in my post did I say that house prices cannot fall. In fact I don't think i've ever said it in the entire existance of this thread. I will state it again plainly: I do NOT believe that house prices never fall. ALL assets rise and fall in value, to think otherwise is naive. As with any investment you need to exercise appropriate risk management and have exit strategies in place. Property is no different.

medicowallet said:

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

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Now this is something I wouldn't have expected of you Medicowallet. As a 'savvy' investor with 'multiple' properties you would know that some areas are going up, some are going down and some are stagnant. I like the "(insert "not in my suburb" quote)", very cute. I would hazard to guess that you're the one actually doing that - picking on a few choice areas and extrapolating for the whole of Australia.

You and I both know we can pick out choice suburbs to illustrate whatever point we like. I rent and keep a close eye on the market as a result (always looking to pocket a few $$). Plenty of suburbs still going up (coincidentally in desirable suburbs... who'd have thought ey?)

medicowallet said:

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)

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Tell your point to those investors who seek positvely geared property, or properties with a low capital cost but high rents (think specialty towns like mining towns, holiday spots, etc). While you're at it you should go and tell all the Bond, Dividend and Cash investors that they're investing wrong - it's all about the CG and without it you can't make any money. Different people have different investment strategies and desired outcomes - just because you invest in CG does not mean that everyone else has to as well.

Also, CG does not have to be above inflation for an investment property in order to break even. If the cashflow (rent return less expenses) is positive and CG matches inflation you're making money (perhaps not a lot for the size of investment : but still above 'break even')

medicowallet said:

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!.

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No need to stoop to name calling, are you always this rude to people? Does my differing opinion offend you that much?

I'll provide an explanation, always happy to help out the newbies.

Scenario: Townhouse in Melbourne's South Eastern suburbs, built within the last year. I prefer to use a real example - this particular property is one of the places I put an offer down for a few months ago.

Personal Income: $90,000

Property Price: $360,000
Loan Value: $270,000 (75% LVR)
Interest rate: 7% ($18,900 p/y)
Rental Income: $350 p/w ($18,200 p/y)
Expenses: $3750 p/y
Depreciation: $7500 p/y (including building depreciation)

Tax Calcs:

Rental Income: $18,200

Expenses: $3,750
Depreciation: $7,500
Interest: $18,900
Total Expenses: $30,150

Annual before tax loss: $(-11,950)

Tax Savings: $4,464 (@ 37% tax bracket and $90k income)

Cashflow

Rental Income: $18,200
Tax Savings: $4,464
Total Inflows: $22,664

Expenses: $3,750
Interest: $18,900
Total Outflows: $22,650

Annual Cashflow Cost/Surplus: $14

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There you have it, a positive cash flow property with negative gearing. It can be done, just takes some research and careful selection.

Of course not everyone can do it - need to be in a good tax bracket 37% or more, with 25%deposit and you need to find something with low expenses and good depreciation so you'd be looking at new properties, perhaps units/townhouses (low maintenance, low council rates).

Uncle Festivus said:

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

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Give me a real asset that produces income in present current terms over gold any day.

It's funny the same people that make fun of the property speculaters that say things like, " property always goes up, property never falls" etc etc Believe the same crap about gold.

Gold and property are both probably over valued at present (gold probably more so), Hence why I haven't bought a property in years, But atleast the property I do own will generate income regardless.

Real assets have all the same hedging as gold, if the currency fails the real assets will just carry on trading in current terms.

Junior said:

A lot of fools have made a lot of money over the past 10 years investing in gold.

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Buying gold at $250 back in 2002 is very different to buying it now at $1400. Is it really sound to buy your investments at 100year speculative highs. Or does gold never fall, does gold only ever go up.

If property is in a bubble when it goes from $200 to $450, what is gold in when it goes from $250 to $1400.

If your buying gold at current levels and recieving zero income, All your hopes are on contiuned increase in the gold price. that seems risky to me. But hey I could be wrong.

That graph only evidences to me more that Gold is overheated. Same as the property market was 12 months ago.

P.S. To turn $250 into $1550 over a 10 year period has a compound interest rate of 19.97%.. If I am dealing in property development it has to have MINIMUM 20% return before I am interested.

KurwaJegoMac said:

No need to stoop to name calling, are you always this rude to people? Does my differing opinion offend you that much?

I'll provide an explanation, always happy to help out the newbies.

Scenario: Townhouse in Melbourne's South Eastern suburbs, built within the last year. I prefer to use a real example - this particular property is one of the places I put an offer down for a few months ago.

Personal Income: $90,000

Property Price: $360,000
Loan Value: $270,000 (75% LVR)
Interest rate: 7% ($18,900 p/y)
Rental Income: $350 p/w ($18,200 p/y)
Expenses: $3750 p/y
Depreciation: $7500 p/y (including building depreciation)

Tax Calcs:

Rental Income: $18,200

Expenses: $3,750
Depreciation: $7,500
Interest: $18,900
Total Expenses: $30,150

Annual before tax loss: $(-11,950)

Tax Savings: $4,464 (@ 37% tax bracket and $90k income)

Cashflow

Rental Income: $18,200
Tax Savings: $4,464
Total Inflows: $22,664

Expenses: $3,750
Interest: $18,900
Total Outflows: $22,650

Annual Cashflow Cost/Surplus: $14

----------------------------------------------

There you have it, a positive cash flow property with negative gearing. It can be done, just takes some research and careful selection.

Of course not everyone can do it - need to be in a good tax bracket 37% or more, with 25%deposit and you need to find something with low expenses and good depreciation so you'd be looking at new properties, perhaps units/townhouses (low maintenance, low council rates).

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NAMECALLING!! lol, harden up champ. That is the lamest response to something, if you regard "maestro" as name calling, then there is something clearly wrong with your interpretation of society.

But as for your figures.

1. I note that you, like many property spruikers do not include all expenses. I wonder how far that $14 will go towards maintenance etc. Where is the money to replace the balance of the $7500 depreciation? Lacking? Please include these figures in a revised reposting.

Your figures therefore REQUIRE CG to maintain position.

Your property is only positively geared, because you fail to maintain it.

You also fail to address any factor which I pointed to with maintaining said scenario (changes in depreciation, expenses, rent received) because with your continuously deteriorating asset, you are going to find it increasingly difficult to maintain rent.

In response to the other points

1. To say that all you need is cashflow, BASED on the assumption that CG will remain in line with inflation, is doing just that, making the assumption that house prices NEVER fall.

2. Some clear evidence is coming out that rental returns are flat, and as you are well aware, prices cannot go up faster than inflation forever. To disregard this is very.... interesting.

3. I also note how you berate me for my comment on CG needing to be higher than inflation to break even, and note how you intentionally disregard the part where I say "COMPONENT" ie in general, to break even on your capital investment, you need to have higher than inflation growth in CG to break even on an investment property... poor reading or poor form?

trainspotter said:

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.

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Happy to return

Oh, btw, I notice today that Italy might be in a bit of trouble, that America might take longer to come out of trouble, and as we clearly know, China is having inflation problems. We have a carbon tax on the way, and manufacturing and retail is struggling, with a government with no knowledge of how to spend (or not to spend money)

America is printing money.

Gold may very well maintain its position.

Interesting times.

Most pertinent point..... where is ROBOTS???


I am also happy to decline your offer on checking out my portolio with respect to negative gearing. I own my properties. Sorry, but Mr conservative me does not see how overexposing myself to property at the moment is a good thing..

Have you sold any more properties recently??? Let me know when you do I will be interested how far you ride the rollercoaster down, and who jumps off first. Was it 70% gearing iirc? Doesn't take much of a fall to make that 90% or 100% gearing.... when is it when a bank starts to panic and presses the sell button? Not sure myself.

"AINT GONNA HAPPEN" - can you please explain what you mean by this, exactly, so that I can use it in the future. I give you 3 options..

do you mean that house prices here won't fall?

do you mean that they won't fall by more than 5%?

or do you mean they won't fall by more than 10% ?

medicowallet said:

Where is the money to replace the balance of the $7500 depreciation? ...

You also fail to address any factor which I pointed to with maintaining said scenario (changes in depreciation, expenses, rent received) because with your continuously deteriorating asset, you are going to find it increasingly difficult to maintain rent.

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I'm very interested to hear from you why:
1) a non cash item (depreciation) requires money to cover it
2) overall depreciation would change (other than modifications to existing property)

Thank you

medicowallet said:

NAMECALLING!! lol, harden up champ. That is the lamest response to something, if you regard "maestro" as name calling, then there is something clearly wrong with your interpretation of society.

But as for your figures.

1. I note that you, like many property spruikers do not include all expenses. I wonder how far that $14 will go towards maintenance etc. Where is the money to replace the balance of the $7500 depreciation? Lacking? Please include these figures in a revised reposting.

Your figures therefore REQUIRE CG to maintain position.

Your property is only positively geared, because you fail to maintain it.

You also fail to address any factor which I pointed to with maintaining said scenario (changes in depreciation, expenses, rent received) because with your continuously deteriorating asset, you are going to find it increasingly difficult to maintain rent.

In response to the other points

1. To say that all you need is cashflow, BASED on the assumption that CG will remain in line with inflation, is doing just that, making the assumption that house prices NEVER fall.

2. Some clear evidence is coming out that rental returns are flat, and as you are well aware, prices cannot go up faster than inflation forever. To disregard this is very.... interesting.

3. I also note how you berate me for my comment on CG needing to be higher than inflation to break even, and note how you intentionally disregard the part where I say "COMPONENT" ie in general, to break even on your capital investment, you need to have higher than inflation growth in CG to break even on an investment property... poor reading or poor form?

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It's not about the severity of the name calling, it's about respect. Do you see me flapping my mouth off at you? But of course those who's opinions are effectively countered always get defensive, but that's fine, i'm sure we can all learn a thing or too from your 'savvy' investment experience which you have yet to share.

I also love your last comment about 'poor reading or poor form', funny coming from the one who interprets my post to say $14 is for maintenance. Look at the figures again - that's the CASHFLOW. CASHFLOW is income less expenses. Poor reading and poor form indeed.

So how are your mutltitude of properties going? You seem to be quite 'savvy' with the strong belief of declining house prices and decreasing rent. Sold any yet? As per your previous post, no - with no intention to. Funny that, refusing to action your convictions. Here you are forecasting doom and gloom and you're not cashing in. Hell, you didn't even know that one could have positive cash flow with negative gearing!! Here's an article from a magazine to explain it in detail so you don't start accusing me of more hocus pocus ($14 for maintenance hahaha):

http://www.apimagazine.com.au/api-o...nding-negative-gearing-and-positive-cash-flow

Either way, as most can see you're a full of s*** armchair economist, never substantiating claims let alone following your own convictions.

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I'll take my leave and join all the 'property spruikers' who have departed this thread. The same baseless, herp derp comments are made page after page and are rebuffed time and time again with reasoned analysis to be followed by more herp derp comments.

Good luck to the bears for the impending crash, I'm sure you've all sold your homes and IPs and have shorts on the banks and property trusts. Be sure to shoot me an email in the next few years gloating how you made millions.


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If anyone wants more details on some of the strategies I mentioned feel free to PM me. I'll be working 2 extra jobs and living off canned tuna to pay off my IP so if it takes me a while to reply bear with me.

All the best, peace out

Properties in Australia are generally overpriced and it wouldn't take much of an economic downturn for housing prices to significantly fall.

1.The ratio between average house prices and average earnings is now way too high so far that many people just can't afford current prices.

2.What happens when you add the number of cash strapped baby boomers onto the market and they want or need to downsize but there aren't many buyers to buy their properties? Yep more pain for house prices.


3.The rising cost of living , food, power, petrol etc adds more pressure on peoples ability to afford a huge mortgage.


4.The banks ability to lend freely may be curtailed by more expensive access to credit facilities which would be passed on to consumers thereby making it even more difficult for lenders to service mortgages.


5.If we have a GFC2 then house prices will fall drammatically. This is on the cards and if it happens then I wouldn't worry to much about house prices i would be more worried about just surviving because the whole financial system could meltdown in such a scenario.

One needs to decide if the market will improve or tank, once you decide sit back and enjoy and hope you made the right choice.

Of course one should read the market reports and if you think what is going on out there is normal stick with property.

KurwaJegoMac said:

It's not about the severity of the name calling, it's about respect. Do you see me flapping my mouth off at you? But of course those who's opinions are effectively countered always get defensive, but that's fine, i'm sure we can all learn a thing or too from your 'savvy' investment experience which you have yet to share.

I also love your last comment about 'poor reading or poor form', funny coming from the one who interprets my post to say $14 is for maintenance. Look at the figures again - that's the CASHFLOW. CASHFLOW is income less expenses. Poor reading and poor form indeed.

So how are your mutltitude of properties going? You seem to be quite 'savvy' with the strong belief of declining house prices and decreasing rent. Sold any yet? As per your previous post, no - with no intention to. Funny that, refusing to action your convictions. Here you are forecasting doom and gloom and you're not cashing in. Hell, you didn't even know that one could have positive cash flow with negative gearing!! Here's an article from a magazine to explain it in detail so you don't start accusing me of more hocus pocus ($14 for maintenance hahaha):

http://www.apimagazine.com.au/api-o...nding-negative-gearing-and-positive-cash-flow

Either way, as most can see you're a full of s*** armchair economist, never substantiating claims let alone following your own convictions.

--------------------

I'll take my leave and join all the 'property spruikers' who have departed this thread. The same baseless, herp derp comments are made page after page and are rebuffed time and time again with reasoned analysis to be followed by more herp derp comments.

Good luck to the bears for the impending crash, I'm sure you've all sold your homes and IPs and have shorts on the banks and property trusts. Be sure to shoot me an email in the next few years gloating how you made millions.


---------------

If anyone wants more details on some of the strategies I mentioned feel free to PM me. I'll be working 2 extra jobs and living off canned tuna to pay off my IP so if it takes me a while to reply bear with me.

All the best, peace out

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And the true swearing, insullting Kurwa comes out, nice work. I am but a newbie, and an FOS armchair economist and "savvy" person full of herp derp comments....

I will not sell my properties and will ride out lower prices etc for however long they occur, just as I do with most shares and other forms of investment, because, you see, I don't have a preference for either. I like to have some in everything, and it has proven successful for the past 30+ years.

Lol, I still see that you do not offset your expenses in your analysis. Anyway, you are not replying here anymore, so best of luck with your recently purchased property. I hope that everything keeps defying trends for you in the future, but don't bet on it.

mazzatelli said:

I'm very interested to hear from you why:
1) a non cash item (depreciation) requires money to cover it
2) overall depreciation would change (other than modifications to existing property)

Thank you

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1. Because you are killing your asset to achieve this pseudo positive cashflow. If a true indication of maintenance was included in the assessment, there would not be positive cashflow in this example.

2. Because it eventually runs out, depending upon how old the property is, and as you say, modifications to the property (which in the example are very low indeed)

Perhaps you would like to offer an analysis on the figures yourself.

but the small amount to cover ALL outgoings and to maintain the property is not what I experience.

medicowallet said:

Happy to return

Oh, btw, I notice today that Italy might be in a bit of trouble, that America might take longer to come out of trouble, and as we clearly know, China is having inflation problems. We have a carbon tax on the way, and manufacturing and retail is struggling, with a government with no knowledge of how to spend (or not to spend money)

?

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This too shall pass.

Tysonboss1 said:

This too shall pass.

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Possibly,

however there is definitely a chance of GFC 2 with now an Australian govt in debt, a carbon tax on the way, and greens in the senate, and a weaker europe.

Could get interesting, and in this case, it is important to not have rose coloured glasses on (which I know you don't)

Tysonboss1 said:

This too shall pass.

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It is said an Eastern monarch once charged his wise men to invent him a sentence, to be ever in view, and which should be true and appropriate in all times and situations.

They presented him the words: "And this, too, shall pass away."

How much it expresses!

How chastening in the hour of pride!
How consoling in the depths of affliction!

When the king received his ring and read the inscription, his sorrows turned to joy and his joy to sorrows, and then both gave way to equanimity.

Tysonboss1 said:

It is said an Eastern monarch once charged his wise men to invent him a sentence, to be ever in view, and which should be true and appropriate in all times and situations.

They presented him the words: "And this, too, shall pass away."

How much it expresses!

How chastening in the hour of pride!
How consoling in the depths of affliction!

When the king received his ring and read the inscription, his sorrows turned to joy and his joy to sorrows, and then both gave way to equanimity.

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And then bought the inert metal, physical gold, and added it into his investment portfolio.

medicowallet said:

And then bought the inert metal, physical gold, and added it into his investment portfolio.

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I'll forgive him for that, Benjiman Grahams Body of intellectual work on investment was not available for another 1000years or so.

Is buying and holding gold Investing?

In Security Analysis, Benjiman Graham proposed a clear definition of investment that was distinguished from what he deemed speculation. It read,

"An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative."

No doubt that Gold purchased outside of bubble conditions meets the first condition being safty of principle, But it fails the second test of generating an adequate return, you could say it actually creates a negative return due to storage costs.

So buying gold is not investing, it is speculating. Now there can be intelligent speculation just as there is intelligent investing, Whether buying gold at 100year highs is intelligent only time will tell. But it is not investing in the true sense of the word.

medicowallet said:

Happy to return

Oh, btw, I notice today that Italy might be in a bit of trouble, that America might take longer to come out of trouble, and as we clearly know, China is having inflation problems. We have a carbon tax on the way, and manufacturing and retail is struggling, with a government with no knowledge of how to spend (or not to spend money)

America is printing money.

Gold may very well maintain its position.

Interesting times.

Most pertinent point..... where is ROBOTS???

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Good to have you back ..... how's the self medication going?

Italy in trouble, Portugal in trouble, Greece in trouble, Ireland in trouble, The whole Euro in trouble. Been going on for awhile this lot eh? Global macroeconomics have been in the toilet bowl for a loooong time now.

America has not stopped printing money.

Gold may well stay steady and offer a light retreat due to the current economic climate.

I believe robots got tired of preaching to the converted. Can't say I blame him.

I am also happy to decline your offer on checking out my portolio with respect to negative gearing. I own my properties. Sorry, but Mr conservative me does not see how overexposing myself to property at the moment is a good thing..

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So sell the stuff before it is too late. Sell sell sell and buy back in when the property market tanks. This is what you are preaching to others or do you not have the conviction to backup the rhetoric?

Have you sold any more properties recently??? Let me know when you do I will be interested how far you ride the rollercoaster down, and who jumps off first. Was it 70% gearing iirc? Doesn't take much of a fall to make that 90% or 100% gearing.... when is it when a bank starts to panic and presses the sell button? Not sure myself.

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Nope ....... Am looking for more industrial land ATM. Housing is soft around the edges.

Please explain how it could become 100% gearing? Are you suggesting that the market is going to fall 30%? So one of my houses is worth 500k at the moment, when do you believe it will be worth 350k then? Next week? Next month? Next year? Next decade?

You of all people as an esteemed property guru should know that the bank does not hit the panic button until the mortgage goes past 120 days in arrears. If the rents are paying the mortgage then why should I sell? Just LOL at this chestnut.

"AINT GONNA HAPPEN" - can you please explain what you mean by this, exactly, so that I can use it in the future. I give you 3 options..

do you mean that house prices here won't fall?

do you mean that they won't fall by more than 5%?

or do you mean they won't fall by more than 10% ?

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"AINT GONNA HAPPEN" was in reference to your statement that we are just like America. I asked you to go and read the property thread from front to back as to WHY we are not the Americas. This topic has been done to death and explained fully in very simple language for all to understand.

:horse:

trainspotter said:

So sell the stuff before it is too late. Sell sell sell and buy back in when the property market tanks. This is what you are preaching to others or do you not have the conviction to backup the rhetoric?



Please explain how it could become 100% gearing? Are you suggesting that the market is going to fall 30%? So one of my houses is worth 500k at the moment, when do you believe it will be worth 350k then? Next week? Next month? Next year? Next decade?

You of all people as an esteemed property guru should know that the bank does not hit the panic button until the mortgage goes past 120 days in arrears. If the rents are paying the mortgage then why should I sell? Just LOL at this chestnut.



"AINT GONNA HAPPEN" was in reference to your statement that we are just like America. I asked you to go and read the property thread from front to back as to WHY we are not the Americas. This topic has been done to death and explained fully in very simple language for all to understand.

:horse:

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1. I do not want to pay CGT , AND as I said before in this thread, to you most likely, I LIKE my properties and do not want to replace them with different ones.

2. You make assumptions that it is business as usual, and that your tennants are making money forever. I have seen many vacant businesses, over the years.

3. Are you suggesting it is impossible for individual properties to drop 30%? Emmanuel Cassimatis thought it was impossible for the sharemarket to drop 40% too, look where that got him, and a lot of experienced investors.


Yes I am suggesting that price could drop substantially, but you know my position on this, as I have clearly stated this before, and, we have had almost this exact discussion before.

We are in an interesting position. You make more money (in percent terms) if prices rise, I lose less money (in percent terms) if prices fall or stagnate.

I am much happier to be in this position over the short to medium term thankyou very much, and even economists such as Saul agree with me at the moment (which worries me )

FYI I never said that we are just like America, I was inferring that they thought it could never happen there too. Of course we are not EXACTLY the same as America, we are in fact only EXACTLY the same as Australia, ever.