Knobby22
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Show me the stats.
The future of Australian property prices
- Thread starter Joe Blow
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Show me the stats.
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Yes - but there's a very very big difference between bonds and houses, so please do not try to compare them. You do not get a guaranteed 100% ROI with a house. You don't get it with Greek bonds either, but I think that's a lesson well learned by now.
I would highly encourage pensioners to sell property and buy bonds (say our federal government bonds for instance) - I think that's a fine investment.
According to my research both in general fall. Housing downturns bring on recessions, which destroys demand for housing in general - be it buying or renting, as people co-habit more.
A relative of mine is moving into a retirement village as he is no longer capable of living by himself. The retirement village is quite expensive costing something like $250,000 upfront. He can afford this but is still selling his house as if it is rented he will lose a lot of his pension.
I am not sure if retiring baby boomers will be seeking any kind of centrelink benefits but might be worth considering.
I am not sure if retiring baby boomers will be seeking any kind of centrelink benefits but might be worth considering.
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Cite.
I dunno where that number came from, I have had it quoted by quite a few in the investment business... what they are saying is that less than 1% make it through retirement without government assistance at some point. It takes more to retiree than most think! In that process they typically divest themselves of major assets.
There are around 125,000 currently self funded retirees out of a retirement population of around 2 million --> ~ 6-7%. It is optimistic to think that they will all make it through to the end fully self funded so logically they divest at some point BUT even if they don't there will be many more sellers than buyers and as price is set at the margin, you only really need a small imbalance to drive price one way or the other.
Julia
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Just ease off on the categorical, dogmatic statements. There are plenty of choices. The world does not run according to your rules, thank god.
Others have already addressed this point. It's very arrogant of you, especially at your minimal age, to imagine that what you think is best will in fact be even remotely in line with what baby boomers and retirees generally want and/or intend to do.
Well, just consider for a millisecond that your view just may not be 100% right. I know it doesn't come naturally to you to even consider any such thing, but just try.
Do you indeed? Trouble is, there's no earthly reason why any pensioner should take the slightest notice of what you think they should do, so maybe just stop being so tediously dictatorial.
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It's hard to find a lot of things quickly, but let's just see here....
http://www.time.com/time/magazine/article/0,9171,1874846,00.html
It's not really my view so much as it is economic fact.
Knobby22
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Yes, I knew that 1% figure is a dodgy figure used to sell investment products, that's why I asked.
Thanks for the real info. it doesn't include those that structure their affairs to claim the pension even though they own assets through a trust and people getting the part pension.
It is a good point you make that many will eventually sell and skcots gives a good example. sinner gives a good alternative example also of a home being kept. If you have a family trust you may not need to sell.
I just think it will be a slow effect and may not cause the drop some are expecting.
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http://www.lincolninst.edu/subcenters/land-values/rent-price-ratio.asp
Average annual rent across the US...
Considering that period covers the worst recession since 1930 coupled with the worst crash in house prices ever, I think it's fair to say rents don't crash....
Going back further, you can see that rents are not subject to the same appreciation that prices are...
Rents said:
Average annual rent across the US...
Considering that period covers the worst recession since 1930 coupled with the worst crash in house prices ever, I think it's fair to say rents don't crash....
Going back further, you can see that rents are not subject to the same appreciation that prices are...
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No it's the rent to house price ratio - please don't change the subject.
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No, it's not. There are three sheets in that workbook. "rent-price data" is the one you want.
Knobby22
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That is incredibly flat McLovin.
I suspect that Australian data will be much steeper asthe middle class has had a rise in pay unlike the USA middle class over the same time frame.
I suspect that Australian data will be much steeper asthe middle class has had a rise in pay unlike the USA middle class over the same time frame.
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According to the ABS...
http://www.ausstats.abs.gov.au/Ausstats/subscriber.nsf/0/7BA06D0612AAABF7CA257949000B9FBE/$File/41300_2009-10.pdf
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Pretty sure I just said that's the one I don't want?
What I'd be looking for are the rents (preferably real rents).
That site has 3 things none of which is that;
- Rent to Price ratio
- Imputed for owner-occupiers
- Underlying data sheets
Of the data sheets, there is only a BLS measurement of rent. However if you look at what actually goes into that index:
http://www.bls.gov/cpi/cpifact6.htm
You will see that it to is largely about imputed rent from owner-occupiers, because the US officials are obsessed with the obfuscation of any proper economic data.
You will also note that they state it is only recalculated twice a year because they assume that there is no volatility within rents.
In conclusion, I can understand the gesture, but the figures you linked to are a load of crap.
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You didn't want the ratio, so I gave you the data. Until you have something a bit stronger than a Time magazine article I guess it will have to do.
You seem to spend more time disputing anything or anyone who doesn't believe in your version of the world than you do in actually trying to understand the world. Good luck, I'm out.
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There is no data there which reflects how much rent people pay. Explanation above.
Bill M
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No one in their right mind would be happy with a 70% price drop but for me I have an IP mostly for it's rental income. I own it 100% debt free and treat it's income like a small pension. I also do not believe in fanciful 70% drop predictions.
How about throwing up some credible evidence of this.
We don't know when or if ever this will occur. It's all just guess work. Put it this way, if there was a depression I would rather be a property owner and property investor receiving some rent than have nothing. Imagine having no job, no income and no where to live. No thanks I will keep my home and grow some vegies in the back yard.
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Isn't that a bit like saying we have a bad earthquake every 75 years, it's 75 years since we had one, so we're due to have one now.:
If you were a geologist, there would be many signs that indicate that an earth quake is about to occur. If you look at the signals we have at current, we are heading into the next great depression. I have been doing some reading on the great depression, and the similarities to events that occurred in the lead up to then, compared to those occurring today, are very close. If central banks didn't intervene when they did, we would already be witnessing it in full force. everyone can beat up on the doom n gloomers all they want, but the fact is with the current global economic situation, its not off the cards by any means. The only thing we are waiting on is the US' next 'black tuesday'.
@beej, my point was towards your opinion in general, not just in relation to that post, sorry. there isnt a single argument that can be made, that differs to those made in every other country in the world(with the exception of canada i think?) prior to their property bubble imploding. you can be as positive as you want. but being too positive in such a negative environment can lead to poor investment choices. if property was a winner right now, id buy.
@mclovin - property in the states had started to slide from '06. as far as im aware it was the beginning fallout in the property market that started hurting the banks? and eventually led to the collapse of lehmans? im sure there were other factors.
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property crashing was not a cause that led to the great depression.
