Germany, Japan, China better value than Oz
- Thread starter keithj
- Start date
the suggested 2nd biggest point contributing to the alleged overvaluation is a higher degree of urbanisation. so what is the suggestion? truck people out to the back of burke? surely this is a unique characteristic of our society and thus makes direct comparisons to buying a property in germany or wherever nonsensical. not that it wasn't already as a first home buyer in Sydney is hardly weighing up and comparing properties in Tokyo.
may be easier to accept the conclusion and invest in some AMP managed funds!
may be easier to accept the conclusion and invest in some AMP managed funds!
I would love to know more about Shane Oliver's investing history.
He's one of these talking heads that is always popping up and no doubt makes a lot of money because he is an 'authority'.
I do like reading these articles and they are well researched, but they are a bit like eating chips all day for a healthy diet in terms of actually making money for yourself.
Has Shane ever added value with a renovation, purchased at a discount, developed or any of the other ways you can make money in an 'over valued' asset class I wonder?
How can I make money from listening to you Shane?
He's one of these talking heads that is always popping up and no doubt makes a lot of money because he is an 'authority'.
I do like reading these articles and they are well researched, but they are a bit like eating chips all day for a healthy diet in terms of actually making money for yourself.
Has Shane ever added value with a renovation, purchased at a discount, developed or any of the other ways you can make money in an 'over valued' asset class I wonder?
How can I make money from listening to you Shane?
I think you guys are being pretty defensive. Have more of a read of his articles, if you don't think they can help you towards your financial independence etc then props to you.
http://ampcapital.com.au/corporatecentre/research/oliversinsights.asp
I for one love reading his thoughts.
http://ampcapital.com.au/corporatecentre/research/oliversinsights.asp
I for one love reading his thoughts.
Chief economist
Well if you look at gold in CPI units, ounces of gold, working weeks of AWOTE, yield then property values are trading at historically high multiples.
One of the reasons such articles are like a diet of chips and coke for your investing health are the unspoken assumptions that will likely be taken away.
Having read that article I take away the message that you shouldn't be investing in property, shares are better value, or buy a house in another country. Great.
How predictive are yield multiples for future price movements? (You know there has been a lot of research done into PE ratios in the stock market and their predictive value, conclusion... good luck getting a heads up from this ratio!)
How much more expensive does an expensive asset class historically become?
What is the opportunity cost in not investing, or neglecting an asset class?
It remains difficult to be excited about Australian housing as an investment. For sure this guy has never owned any decent properties if he can ever write that. At the very least it's such a wonderful asset class for buying a bargain due to information advantages for the well researched that such a sentence makes me believe this guy has never done any such thing.
More infopr0n. Hey I like the stuff, just have become more comfortable that such things used to make me analyse too much, and actually acting has made me more money than most of my analysis.
Well if you look at gold in CPI units, ounces of gold, working weeks of AWOTE, yield then property values are trading at historically high multiples.
One of the reasons such articles are like a diet of chips and coke for your investing health are the unspoken assumptions that will likely be taken away.
Having read that article I take away the message that you shouldn't be investing in property, shares are better value, or buy a house in another country. Great.
How predictive are yield multiples for future price movements? (You know there has been a lot of research done into PE ratios in the stock market and their predictive value, conclusion... good luck getting a heads up from this ratio!)
How much more expensive does an expensive asset class historically become?
What is the opportunity cost in not investing, or neglecting an asset class?
It remains difficult to be excited about Australian housing as an investment. For sure this guy has never owned any decent properties if he can ever write that. At the very least it's such a wonderful asset class for buying a bargain due to information advantages for the well researched that such a sentence makes me believe this guy has never done any such thing.
More infopr0n. Hey I like the stuff, just have become more comfortable that such things used to make me analyse too much, and actually acting has made me more money than most of my analysis.
I like reading his stuff as well.
Also I would buy a house in Japan and/or Germany if I could afford it, I have seen both as good buying areas.
Likely I'm a bit sensitive to predictors and predictions as well.
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I enjoy the read. it is interesting and debate is good. Comparing classes of assets that trade imperfectly is never easy... you can take the ASX100 which changes from year to year and then compare that to the average australian house (whatever that may be) and draw all sorts of conclusions. I have no intention though of buying an average australian house as it can't be bought.
This is sort of true. PE ratios are almost useless in determining if a company is a good buy or not. On their own at least. Same with property. Rental yield is no help to determine if a property will be a good buy, on it's own anyway, without other factors.
However, I believe that the average PE of the all ords relative to interest rates are a truely great way to time the market. Back test it to see. PE's were very high in Jan 2000 and Oct 87. What happened? PE's were very low in early 03 and mid 90's. What happened?
The smart money also used average property PE's to get out of Sydney in 2003 and buy property in general in the late 90's.
Just my opinion. As I said, back test it yourself. Using average PE's allowed me to make a heap from shares from 03 anyway.
I like Shane Oliver articles, and I too would like to know his investing success.
See ya's.
edit. Also note that the bottom left chart from that article is wrong. The black line is property rental yield. The light blue line is share dividend yield. Notice the pathetic share yield in Oct 87. 3% or so, when interest rates were double didget and property rental yields were quite good, about 9%!!!. PE's can be used to time the market!!! Anyone still holding shares in Oct 87 must have been mad!
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I like his stuff - I read a wide variety of research. He gives 'the big picture' on the global economy & asset classes. He has access to good research. He gives me a few small pieces of my investment jigsaw puzzle. He's highlighted this week possible opportunities in Japan etc. He appears to me to be neutral.
I'm sure he's never done a reno, or analysed which street of which suburb to buy in. I'd guess he's got a lot invested in AMP funds. I don't really care - he's not a specialist investor - he's a specialist economist.
I'm a 'big picture' investor - I follow the economic cycles. I invest where I see good value. He points out areas of good & poor value.
I'd wouldn't expect a day-trader to get as much value from his commentry.
I have been bullish both these markets for along time.
You can buy directly into the Jap market through Babcock and Brown Jap Fund (Stock Code BJT)
Has been one of my better perfomers. I bought in the float @ $1 and bought some more on listing (as they were scaled back).
They listed in april 05 @ $1 now regularly trade above $2.
Gearing still low at about 40% ish - quality manager in b + b.
Long term jap property still looks good. Good yields.
And the entry isnt high...ie you dont need to go out and buy a whole house...
This commercial property though not res.
Anyway all the best.
Regards
How would you go about doing a renovation in Japan????????
The mind boggles.......maybe you could leave it to the PM !!!!!!!!!!!!!!
I think any purchase in a country where you don't have command of the language is setting yourself up for a disaster. I suppose you could look up RPDATA, the Japanese version. Do they have that?
Which currency would be better to repay the mortgage given the currency movementns one could expect over 3 to 5 years and rent being in yen?
The mind boggles.......maybe you could leave it to the PM !!!!!!!!!!!!!!
I think any purchase in a country where you don't have command of the language is setting yourself up for a disaster. I suppose you could look up RPDATA, the Japanese version. Do they have that?
Which currency would be better to repay the mortgage given the currency movementns one could expect over 3 to 5 years and rent being in yen?
I'd be very careful with property in Germany outside the major cities (Berlin, Duesseldorf, Frankfurt, Hamburg, Munich, Stuttgart).
Capital growth has been virtually non-existent over the past 15 years in most parts of Germany due to an oversupply of newly constructed properties after the fall of the Berlin wall in 1990/1/2.
I have properties in Germany with an average captial growth of about 1% per annum in the last 15 years; however; rental yield is about 7.3% overall.
All properties are cashflow positive (before depreciation) due to interest rates being around the 4% mark.
Home ownership in Germany is not as widely used as in Australia, 70-75% of the population is renting.
In addition; most accommodation would be high rise and high density living (flats/apartments).
The usual German family (mum, dad + 2 kids) lives on average in a flat with about 80-90 sqm; it is not unusual for families to stay 40 - 50 years in the same apartment.
Even if you get capital growth; you can't access the equity and loans have to be P&I (but can be financed over 50 years).
Just my 5 cents.
Capital growth has been virtually non-existent over the past 15 years in most parts of Germany due to an oversupply of newly constructed properties after the fall of the Berlin wall in 1990/1/2.
I have properties in Germany with an average captial growth of about 1% per annum in the last 15 years; however; rental yield is about 7.3% overall.
All properties are cashflow positive (before depreciation) due to interest rates being around the 4% mark.
Home ownership in Germany is not as widely used as in Australia, 70-75% of the population is renting.
In addition; most accommodation would be high rise and high density living (flats/apartments).
The usual German family (mum, dad + 2 kids) lives on average in a flat with about 80-90 sqm; it is not unusual for families to stay 40 - 50 years in the same apartment.
Even if you get capital growth; you can't access the equity and loans have to be P&I (but can be financed over 50 years).
Just my 5 cents.
Comparisons at a country level are useless. How can you lump together all the markets in a whole country and expect to get anything meaningful? You can hardly lump Perth, Melbourne and Sydney together.
Japanese property is DEAD outside of the main cities. Country areas are literally dying as young people move to the cities. Farming communities are disappearing.
Alex
Japanese property is DEAD outside of the main cities. Country areas are literally dying as young people move to the cities. Farming communities are disappearing.
Alex
As I've mentioned I'm a big picture investor, who invests in both shares & IP. I value assets classes in 4 ways -
- compared with their historical earnings/growth
- compared with their forcast earnings/growth
- compared with earnings/growth in other asset classes
- compared with earnings/growth in other markets (eg Overseas)
We frequently see comparisons of share market averages for OS markets - many global equity investors are interested in good value & allocate funds appropriately.
I intend to invest OS at some point in the next 40 years, so it's good to have some pointers about where.
Taking your point to it's logical conclusion, how can you lump Western Syd and Potts Point together, or Woodridge and Highgate Hill - but we still see it.
It's usefulness depends what scale you think on.
Agreed. It's the cities that are interesting. This year land values in cities have risen for the first time in 16 years (see page 21-22 here)
