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Ausprop, The "This time its different" quote is usually related to the underlying cause of booms - human emotion. So in that respect, nothing ever changes, because we humans are too obsessed with fear and greed to stop things going too far. People tend to trot out that quote when trying to...

Great stuff Bill. I find it strange that affordability is so low (reported to be at the same level as the late-80's period of 17%+ rates) yet by your yield/interest rate ratio, its substantially cheaper now. If anything, it tells us that the yields of the late 90's (which I am still waiting...

From wikipedia: In a nutshell, the bond market (who is responsible for valuing the long end of the yield curve) is betting that short term interest rates will be lower in the future. This happens when the central bank lowers the fed rate quickly, and the cause of that is usually economic...

BillL, Do you have figures for yields going back 20-30 years? It would be very interesting to see what actually happened in the other booms, rather than the last one. Even some anecdotal tales would help :)

Jamie, The US yield curve inverted some time ago, so in effect mortgages are now slightly cheaper than a year ago. Its the long end of the yield curve that tends to determine "real-life" rates (i.e. the kind of rates you get from the bank) rather than the Fed rate, which is only used for...

Does anyone notice how Syndey was the lagging partner when compared to Melbourne/Brisbane?

The rate matters in context to the residential cycle. If you are a top-down investor who tracks the cycle closely, that rate is very important. If your a bottoms-up type, then its not so relevant. I'm sure there are lots of rich old-school investors who wouldnt even know (or care) what the...

Travis Morien - he isnt exactly the slickest presenter around (I think I made a mistake sending my parents to him - they had absolutely no idea what he was on about) but you wont find a more genuine and honest financial advisor in Perth. Check out his web site (and the massive FAQ he...

Then explain why you think it is too simple. Those flat-broke economic lecturers most probably taught the very people making decisons like 'should we build a steel mill in Australia'. Whether they were right or wrong is another discussion entirely, but if you think Australia can support a large...

FlyInFlyOut - working on site up north for x weeks, then flying back to Perth for a week or so. Not the best way to bring up kids, as they stop remembering who you are after a while.

Would you believe I actually thought you were taking the mickey out of Steve Mc with this post? :) Such a creative name for his 3rd book!

Nice post - it certainly made me recosider some of my preconceptions, especially about my plans to only concentrate on large older homes with the potential to sub-divide. What about the case where you demolish an original house - assuming a 1000sqm block, which can fit 4 units (this is the...

Dazzling, I used to think like that as well - however my newfound interest in economics has changed my mind recently. Put it simply, if it were such a good idea to base the steel mills here, someone would have already done it. I dont know the full history but BHP's iron-brick plant was an...

I'm not sure why you view tertiary (which I assume is the same as the services sector) as useless. Manufacturing isnt exactly a growth industry these days - driven by razor-thin profit margins and countries that have a huge wage advantage compared to Australia. That money could be used to create...

Jamie, I get the feeling those posts were in reference to the second post of this thread, and not your comments made earlier. I can't see anything wrong with your request - after all, we are on this board to share knowledge and discuss opinions... if people dont want to share, why bother reading.

Ahh.. my mistake. I didnt realise the effect an IP loan would have on the calculations.

Pitt St, Do you think there will be any repercussions from Democratic control - i.e. their historical resistence to free trade and globalisation in general? A number of Democratic senators/reps have publicly spoken out against the amount of trade with China, Mexico, etc, and the slow process of...

The money you save can still be compared to a risk-free investment of around 10-11%. The end result is that your return is effectively the money you saved from not paying the interest + the tax advantages. What do you mean by 'neither here nor there'? Of course, the online account is nice that...

Thats called a bull market. This implies that the LPT sector will experience some negative growth in the future, with reduced yields and negative capital growth. Long-term, you wont get more than 10% from LPT's (and I mean 10-15 years long term). And you take on quite a bit of risk for that 10%...

Kenneth, I assume that housing starts also incorporate redevelopment in inner/mid suburbs, like townhouses/villas. One old block can handle 3-4 new townhouses. In Balcatta, I drove around one weekend and counted no less than 17 townhouse developments in progress. Assuming each development can...