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Actually they would be, because: 1) the only way i would get back to a position of 2 properties is if property prices continue their rapid rise over a short period (ie i am staggering my sales prices) 2) the buffer has to come from somewhere, at this stage i am more comfortable with shares...

I understand this, and actually i have already done this to a large degree, by tapping my increased equity in property during the GFC to invest in shares. This put me in a fully invested position. Now i want to build up my buffers again.

This is one of my primary concerns. At the end of the day i am a pretty simple investor. I place alot of emphasis on cash flow. By looking at cash flow i can afford to be patient if market prices do not move in my favour. The net yld on my apartments is moving down below 3.5%. If we get...

So what about 2150 then, will 'affordable' be 200kms further out??? I agree with you on most points, but on this i disagree. What about 2250, will it be 300kms further out??? If this is so, what about those countries that have been around for a donky's age: what about greece, what about...

Yes your logic here follows Keith's schedule and it makes sense over the long term. I fully support this view so long as: 1) a long term view can be taken; 2) a person is financially able to hold for the long term. My concern is with the medium term and with a view specific to the...

Thats a great spreadsheet keith, and i think it just proves the point about property being a great investment over the long term (which i have never disputed). My concern is the medium term, especially with the risk of high gearing in whats still a low interest rate environment, coupled with...

And here we also come to an interesting point in this 'debate'. Any negative comments i make, at least in the short term, are going to be proved WRONG, by the increase in prices. Sensing a potential bubble, and knowing when it will end are two very different things. It is almost...

Out of curiosity KY, when your sister and friends paid off their homes, what period did it take, and what % income was being used to service the loans. Do you think they could do it as easily on the current prices?

keithj;656621]Not quite sure I understand.... can you elaborate ? Yes i understand this, i have also stated that i am less judgemental of houses with large land content because of the increasing intrinsic value of the land. But lets extrapolate this out to the future. Today's upgrader is...

How is this comfortable, on current interest rates of say 6.5%+ Principle repayment of say 1.5%, this is 8% of $500k (assuming the $500k property is fully paid off), which is 40% of the income. Add in council rates, repaires and maintenance etc. Its doable, but not comfortable. I...

But can urban expansion continue indefinately. I do note with some caution, my comments re those properties with large land holdings, as the utility value of the land increases over time. But what about apartments/town houses, these are also going gang busters, and the utility value of...

Keith, i'm sorry but i am starting to loose confidence in this argument. The general argument is correct, but it doesnt justify price rises of ANY DEGREE, which the current sentiment seems to justify. Every bubble is based on 'fundamentals', but the greater the continued confidence (or...

There was an interesting graph today in the Australian Fiancial Review which showed i think it was Melbourne residential property prices. Anyway the base year was 1989/90 at 100. Basically the graph diddled around the base until 1998 at which point it has exponentially increased to the current...

This is a very good observation. I wish more people would 'get this'. And another point, for those with property, the RBA increases are acting as a sought of 'insurance policy'. Remember the sighs of relief when the RBA decreased rates last year, they could only do this because it was...

In 2008/09 i talked about the application of game theory and the big 4 banks (and why you had to buy the shares). Well this time around its RBA game theory. After appearing on morning television trying to get the message across, its quite logical that the RBA increases rates today, otherwise...