The future of Australian property prices

[tech/a]

Love it!

And why do you think many people like me were prepared to buy house after house at 100% borrowings?

Because I could (for 7 yrs) buy houses at 100% borrowings and rent them out with a positive return every time.
Not only that but my rents increased and my equity sky rocketted.
So why wont we leave in droves.

Because my $500K houses I bought in 1996 at $85K and rented at $200/week are now rented for $400 a week. So they drop 20%
Do I care? really!
I sold one in 2007 and freeholded 4
Do I really care??

Opportunity
When it hits you in the face
Grab it with BOTH HANDS.

Ill be anything you like that the author of that artical DOESNT HAVE one IP.

I pop in now and again and its still as boring as it was when it started!

 

[Glen48]

The reason house prices took of as well as furniture, plasma tv etc and boomers being allowed to re-live their youth by buying older model cars was cheap credit, lo doc loans the bribe and banks pushing out cheap money, as most didn't understand the credit system, thought the bribe would give them money in their hand, being brained washed in to house price double every 7 yrs they all went on a spending spree, now the bill has arrived and no one can pay.
Just like the start of any other depression and just like the next one in 70- 80 yrs time when most will have forgotten about this one.

House prices are gong down thread closed.

 

[tech/a]

The reason house prices took of as well as furniture, plasma tv etc and boomers being allowed to re-live their youth by buying older model cars was cheap credit, lo doc loans the bribe and banks pushing out cheap money, as most didn't understand the credit system, thought the bribe would give them money in their hand, being brained washed in to house price double every 7 yrs they all went on a spending spree, now the bill has arrived and no one can pay.
Just like the start of any other depression and just like the next one in 70- 80 yrs time when most will have forgotten about this one.

House prices are gong down thread closed.

Brain washed.
Who are you kidding.

They Doubled and Trebled and Quardupled.
Many frozen by fear missed out completely on a once in a life time outlier!!!!

Man there is no helping some people.
Look around outliers happen all the time.
FIND ONE!
MAD has risen 500% in 6 mths.
If you had $300K (price of a very very modest house) on that ---------------- See the point!

 

[McLovin]

Love it!

And why do you think many people like me were prepared to buy house after house at 100% borrowings?

Because I could (for 7 yrs) buy houses at 100% borrowings and rent them out with a positive return every time.
Not only that but my rents increased and my equity sky rocketted.
So why wont we leave in droves.

Because my $500K houses I bought in 1996 at $85K and rented at $200/week are now rented for $400 a week. So they drop 20%
Do I care? really!
I sold one in 2007 and freeholded 4
Do I really care??

Opportunity
When it hits you in the face
Grab it with BOTH HANDS.

Ill be anything you like that the author of that artical DOESNT HAVE one IP.

I pop in now and again and its still as boring as it was when it started!

I don't really understand the point of your post. You bought well 16 years ago at a yield over 10%. Of course you wouldn't sell, you've got a nice income stream (I don't buy into the whole rents are going to collapse). I understand that some property investors wanted to build a stable income stream and well done to them. Your houses have had a more than fivefold increase in price, yet rental income has only doubled. If it were a stock and investors in 1996 were only willing to pay 8.5x earnings but today are willing to pay 25x earnings then I'd assume it was growing its earnings a fair bit faster than 4.5%.

I know plenty of people in your shoes who have bought well and couldn't care less about property prices, they have no intention of selling. They're not worried because they bought income not capital growth. The ones who thought they'd get rich buying property, well they're a different story.

FWIW, I'm not one of those property doomsdayers but I don't think it's going up for a while.

 

[DB008]

Generally speaking, rent only goes up every 6 months or yearly (usually when a new contract is signed, or is in the contract & stipulates a rental increase on xx date).
Usually it's in small increments too, like $10 a week or so.

 

[DB008]

Because my $500K houses I bought in 1996 at $85K and rented at $200/week are now rented for $400 a week. So they drop 20%
Do I care? really!

Very valid point.
I don't care about what my IP is worth, but l do care what the rental income is.

 

[rryall]

Very valid point.
I don't care about what my IP is worth, but l do care what the rental income is.

This is a very ignorant point of view. Yields are going to be highly correlated with capital preservation. If house prices continue their downward trend rents will decrease as many renters will become buyers.

 

[DB008]

This is a very ignorant point of view. Yields are going to be highly correlated with capital preservation. If house prices continue their downward trend rents will decrease as many renters will become buyers.

Sorry, maybe l should have been clearer.
I'm not bothered if 1 of my IP's dips in value, from say, 350k to 320k, while the rent remains unchanged.
As an investor, you can look for 3 types of value in property;
1) Capital gain
2) Cash flow - through rent
3) Both points 1 and 2

At the moment, l'm sitting at point #2. A dip wouldn't effect me (at the moment, as l'm not looking to sell).

*Sorry for the ignorance.

 

[tech/a]

I don't really understand the point of your post. You bought well 16 years ago at a yield over 10%. Of course you wouldn't sell, you've got a nice income stream (I don't buy into the whole rents are going to collapse). I understand that some property investors wanted to build a stable income stream and well done to them. Your houses have had a more than fivefold increase in price, yet rental income has only doubled. If it were a stock and investors in 1996 were only willing to pay 8.5x earnings but today are willing to pay 25x earnings then I'd assume it was growing its earnings a fair bit faster than 4.5%.

I know plenty of people in your shoes who have bought well and couldn't care less about property prices, they have no intention of selling. They're not worried because they bought income not capital growth. The ones who thought they'd get rich buying property, well they're a different story.

FWIW, I'm not one of those property doomsdayers but I don't think it's going up for a while.

Read this article ----- love it---- then everything else should read in context.

Morgan Stanley outlook on Australia
http://www.morganstanley.com/views/gef/#anchor0a67815c-7a60-11e1-8bc0-6f37658be6eb

Take a note of the housing section;

 

[Starcraftmazter]

Because I could (for 7 yrs) buy houses at 100% borrowings and rent them out with a positive return every time.
Not only that but my rents increased and my equity sky rocketted.
So why wont we leave in droves.

Because my $500K houses I bought in 1996 at $85K and rented at $200/week are now rented for $400 a week. So they drop 20%
Do I care? really!
I sold one in 2007 and freeholded 4
Do I really care??

You bought around the start of the bubble. Your experience is irrelevant to the present situation, as it simply is not what is ever going to happen again.

Your argument is also akin to buying stocks for their dividends and not caring about the capital value.

So tech, are you comfortable with buying a stock, watching it plummet 60% in value, and hugging the dividends for 7 years?

Brain washed.

Indeed you are! Houses don't just rise and rise and rise. They form a bubble, and then the bubble pops. This has been happening for hundreds of years in every country. Including Australia.

Very valid point.
I don't care about what my IP is worth, but l do care what the rental income is.

That's crazy talk, I'll never understand people like you. May as well just throw your money away if you don't care about it.

 

[Ves]

And you conveniently missed tech's main point. Again.

 

[Starcraftmazter]

And you conveniently missed tech's main point. Again.

Which is what? None of his post makes any sense, it's as if he travelled from 1987 to now and is not aware of the bubble that has occurred between then and now.

 

[Ves]

He's bought his houses. He is already presumably rich from the much feared bubble. The key word is, or more accurately was, opportunity.

 

[tech/a]

Which is what? None of his post makes any sense, it's as if he travelled from 1987 to now and is not aware of the bubble that has occurred between then and now.

Let me spell it out.
I'll type slowly so you can keep up!

The article read that banks making credit available caused the bubble.
I personally disagee.
I and the banks saw opportunity
We took advantage of it and so did a small % of the population.

Sure some got their timing wrong and got burnt.
Sure there will be a pull back.
but over time rents and housing will all make new highs.

Got it now or would you prefer the movie length version?
It's an opinion
You don't have to agree.
Most don agree with me
Hence opportunity everywhere!
.

 

[Starcraftmazter]

Let me spell it out.
I'll type slowly so you can keep up!

The article read that banks making credit available caused the bubble.
I personally disagee.
I and the banks saw opportunity
We took advantage of it and so did a small % of the population.

Sure some got their timing wrong and got burnt.
Sure there will be a pull back.
but over time rents and housing will all make new highs.

Got it now or would you prefer the movie length version?
It's an opinion
You don't have to agree.
Most don agree with me
Hence opportunity everywhere!
.

Yes, there was a bubble and some people got rich off of it. What's your point? Everyone knows this already.

This thread is about future property prices. In the future they will go down. A lot.

The last bubble to rival the current happened in 1890. That's 100 years before the start of the current bubble. You know why it took so long for a bubble of this magnitude to form again? Because an entire generation of people lost all their money and were permanently scarred by the asset bubble.

This is why asset bubbles have happened so far and few in between, because no generation has been stupid enough to allow two of them to happen under their watch.

Now I don't know about you, but I doubt I will live another 100 years to see another housing bubble. This is besides the fact that house prices will go down for the next 20 years at least.

 

[Klogg]

So tech, are you comfortable with buying a stock, watching it plummet 60% in value, and hugging the dividends for 7 years?

Even though this is directed at tech, I'm going to answer this with - if I'm getting a good yield (e.g. > 10% return) on the money I originally invested (which he probably is by now), I don't really care what the underlying asset value is. So long as:

- The yield does not change
- I'm not forced to realise the loss

And if you do find any assets that perform like that, be sure to let me know

 

[Starcraftmazter]

Even though this is directed at tech, I'm going to answer this with - if I'm getting a good yield (e.g. > 10% return) on the money I originally invested (which he probably is by now), I don't really care what the underlying asset value is. So long as:

- The yield does not change
- I'm not forced to realise the loss

And if you do find any assets that perform like that, be sure to let me know

Sure thing buddy.

Gold has yielded much more than that every year for the last 12 years (around 28%?) - and it's a hell of a lot safer than housing. It also yields even more in AUD since it has gone up.

As for your investment philosophy - I don't agree with it. And there is nothing with guaranteed yields.

 

[tech/a]

Yes, there was a bubble and some people got rich off of it. What's your point? Everyone knows this already.

Was commenting on YOUR post which was commenting on the past.
I had and have an opinion which is at right angles to the articles view.

This thread is about future property prices. In the future they will go down. A lot.

Excellent more buy opportunities.

The last bubble to rival the current happened in 1890. That's 100 years before the start of the current bubble. You know why it took so long for a bubble of this magnitude to form again? Because an entire generation of people lost all their money and were permanently scarred by the asset bubble.

You appear to be hell bent on convincing yourself and others that there are only losers
There are losers and plenty of winners. Same in the tech boom and bust--- same in 87

This is why asset bubbles have happened so far and few in between, because no generation has been stupid enough to allow two of them to happen under their watch.

Ha ha really. Nothing to do with economics then?

Now I don't know about you, but I doubt I will live another 100 years to see another bubble. This is besides the fact that house prices will go down for the next 20 years at least.

Really.
I'm having a meaningless discussion with one of the 95%
Believe what you want.
Opportunity will just pass you buy.
You'll probably see it but be frozen by fear.
----there you go there's my 20 year prediction---
Time to bugger off again.

 

[Starcraftmazter]

Really.
I'm having a meaningless discussion with one of the 95%
Believe what you want.
Opportunity will just pass you buy.
You'll probably see it but be frozen by fear.
----there you go there's my 20 year prediction---
Time to bugger off again.

Economics indeed - there will never in your lifetime (nor mine) be opportunities in the Australian housing market.

Ignore the evidence at your peril.

 

[tech/a]

Economics indeed - there will never in your lifetime (nor mine) be opportunities in the Australian housing market.

Ignore the evidence at your peril.

And there you have it.
Absolute ignorance.
There are and will be opportunities everyday.
You have to know what to look for and how to take advantage of them

Your totally ridiculous comment would have every builder and every investor,every Real estate office,Every sub contractor,every suppliers of building needs.
shut shop.

I have 3 apartments under construction at the moment.
2 are sold.
The last one will be freehold.
Completion time 10 weeks from now.
I have an industrial block which I will warehouse up in a year or so
when the free way is completed and the rail link to it also completed.
That will return about $60K a year NETT.

I was wrong opportunity will elude you.

You yabba
People like me do!

On the flip side Id put you at around 18-26.
I certainly hope so--- if your older then you've missed the boat.