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The future of Australian property prices

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I do not get this borrow from the bank to buy an investment property game. Do not see the margin of safety. I get turning up to auctions with cash when rental yields are double digit. I can see the margin of safety.
 
I'm far from a property bull. In fact surprised at how well its done in the last 3 years. My point is although I would not go chasing property here it doesn't mean there is NO money to be made in it.

The other point is I'm not so sure you will make money in trading. : Get it?
 
odds-on said:
I do not get this borrow from the bank to buy an investment property game. Do not see the margin of safety. I get turning up to auctions with cash when rental yields are double digit. I can see the margin of safety.
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I doubt Australia will ever see double digit rental yields - rents will just drop in line with house prices.

If you want to invest in property though that's fine and you can do that already in USA with only a small downside risk in prices. You can already get double digit rents rental yields there, and as the Aussie dollar falls the income will only rise.

So why bother with Australia? Go and buy in USA today. You can get beautiful beach-side property in Miami for under $100,000.

Trembling Hand said:
I'm far from a property bull. In fact surprised at how well its done in the last 3 years. My point is although I would go chasing property here it doesn't mean there is NO money to be made in it.
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Well put it this way. You would be an absolute idiot to buy Australian property when it's just past the peak of the bubble with the worst rental yields in the world - compared to say US property which is close to the end of a bubble bust, and with some of the highest rental yields in the world (if you know which cities to look in).

Trembling Hand said:
The other point is I'm not so sure you will make money in trading. : Get it?
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It's pretty much impossible to not make money in trading, I fail to see why everyone doesn't do it. It's not even hard. The real challenge is getting something like 1000% pa returns. Fortunately there is leverage
 

I appreciate there is SOME money to be made in it, but due to the lack of margin of safety it is far from a no brainer, just like sticking all your cash in one company in the middle of bull market. .

I was reading a book about successful investors and one explained how he made his money over the years. Property was the first big win, he built up a portfolio of UK properties when the rental yield was greater than 20% - now that is a no brainer. He subsequently went on to sell the portfolio during a property bull market, moving money into shares as they were a cheap asset class at the time and so on. He looks for cheap asset classes - no brainers. You get the idea.
 
Watching this thread with interest. We're thinking of buying a property in australia soon. My wifewants to go and have a look soon and i've been saying that things looked a bit frothy around Sydney. One of her friends is a builder in Brisbane and he was saying that Brisbane was one of the better 'buys' at the moment.

This would be a property that we would buy now to live in later. Perhaps we would rent it out for a while, a few years.

The US is the best place for bargains, but i couldn't stand living there amongst so many insular self centered rednecks, so whats the point?

CanOz
 
Julia said:
http://www.abc.net.au/worldtoday/content/2012/s3470637.htm

Report on present supply/demand situation in Australia.
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While I largely agree with most of the things said there, and it's no secret everyone knows that FHOG, stamp duties, negative gearing all need to go - they make no real argument and provide no evidence in relation to their claim of a shortage.

The only thing close is this:


But if there was that much construction in Sydney, then there would literally be one house for every one new person living - including all the newborns. That is completely ridiculous for obvious reasons, and I don't understand how they reached the conclusion that unless there is one house built for every one inhabitant that there is a shortage.

Secondly, they completely miss the point of demographics. They don't understand that the 22% who own the 55% of property are all going to die in the next few decades and wind up in old folks homes as they will need medical care. So that's a startling 55% of properties that will come on the market within a very small period of time.

Boomers drove this bubble, and they will equally drive this bust. There is no supply problem. It's pretty simple really.


There's absolutely no reason to buy now if you won't live in it until later - you'd only be losing massive amounts of money. Wait as long as you can before buying, prices in Australia are only headed one way - down.

Rednecks also do not occupy all states in USA, though I agree it's generally speaking a terribly country to live in. Good for investing in RE though - if you must, though I wouldn't encourage it until the bubble crash overshoots the bottom.
 
I doffs me cap to the gents making it in commercial.

But I would have thought this thread was more about resi by implication ....

...and the more SCM pontificates the more bullish I am getting on resi prop. :
 

Re USA... indeed CanOzzy.

What about Canada though? The only rednecks in any great number are in the prairie provinces.

No bargains? Too Cold? Too many frogs? :

Being a citizen, I've been having the whimsical notion of perhaps hanging out there for a bit in the near future.
 
wayneL said:
What about Canada though? The only rednecks in any great number are in the prairie provinces.
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Don't you know that Canada has a housing bubble too?



And it went mainstream just a couple of months ago.







Australia, Canada and China (but probably not for much longer!) - the three greatest current property bubbles. Do not buy - avoid at all costs!
 

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Starcraftmazter said:
You should totally go out and buy 10 houses Wayne. Property prices only ever go up - remember?
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Got a couple of piles I've had for a while. As long as we have the system of money we have, over long time frames that is certainly true... with a few dips/plateaus along the way.

Western governments have come to rely on asset prices rising to prop up the system, so they will prop up markets and I don't see that changing in the near future.

Could be wrong, but that's the way I see it right now.
 

Sure, I understand your argument completely. There is just one thing you forgot to explain.

Japan, US, UK, Ireland, Spain, Portugal, Greece, and New Zealand even.

Why haven't any of them propped up asset prices yet? When will they? Let me know so I can buy in before the next bubble starts
 
Starcraftmazter said:
Japan, US, UK, Ireland, Spain, Portugal, Greece, and New Zealand even.

Why haven't any of them propped up asset prices yet? When will they? Let me know so I can buy in before the next bubble starts
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Coz them broke.
 

Well the PIIGS are in deep doo-doo from going too far with it and not having the wherewithal to prop up the prop.

RE NZ - you'd better take a closer look, not many bargains here.
 
wayneL said:
Of course.
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The biggest housing bubble in the world in probably Vancouver where they are officially the most unaffordable place to live in the world....they just overtook Sydney.

We were there over New Year's, and its a great place to live. My mate has several properties near Victoria, which is more affordable than Vancouver.

Canada is just too cold....I really like Brissy!

CanOz
 
wayneL said:
Well the PIIGS are in deep doo-doo from going too far with it and not having the wherewithal to prop up the prop.
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And the rest? US and Japan?

Do you notice a pattern here? Housing bubbles destroy economies, and the countries can't do anything thereafter because they are economically stuffed. Same thing will happen here and in Canada.

Ironically China is the only country smart enough to put a stop to the madness - so they have a fighting chance.

wayneL said:
RE NZ - you'd better take a closer look, not many bargains here.
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I didn't say there were, but their bubble popped and prices are still heading down.
 
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