Aaron Sice;841632 54% of the population are living in one or two person households - yet they're all buying 3 and 4 bed homes. so the "bedroom" argument is bunk. we don't have a "national bedroom affordability crisis" - unless you're a student. theoretical arguments have no place in the real world.[/QUOTE said:
A crash in property prices? Don't bet on it
- Thread starter Propertunity
- Start date
Fret not. They always have priceless art auctions to amuse them.
I just wonder why they'd bother feeding this indefinite growth machine with their riches if the return they're getting is ever diminishing to the point of being a burden rather than an investment. Logic suggests that they didn't get rich in the first place by making stupid investment decisions, so why start now?
At some point it doesn't make sense to hold expensive, low-yielding properties. While a $500K IP with a 3% net yield and hope of capital growth might just make sense now, would buying that same IP at say $1M offering marginally better rental return, hence a far crappier yield, be enough to drive these rich investors away in droves?
Considering 70% of houses are owner occupied, and 30% are tenanted (or thereabouts) ... who is to say that anyone is buying for yield at any given point?
Not every purchase is about yield ... in fact only 30% of purchase are for such.
So, 70% of the time people are buying ppor's - and as the top half get wealthier they are spending more on these properties.
You would also probably find that the smart investors in this wealth category are not "just" buying ip's, but rather creating them by multi unit developments etc - which, in turn, increases their yield as they are "buying" at cost price rather than retail price.
As for vacant rooms? There are three of us in our current ppor. It has 5 bedrooms (there used to be 6 of us but the older kids have all moved out). Technically we need only 2 bedrooms - but because we can afford the house without renting any of the 3 other rooms out, they ain't going to be rented out in my lifetime here.
One is now an office, one a playroom and one a spare room for when the rele's regularly visit.
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Without yield, it all becomes rather speculative doesn't it? May as well build IP houses out of gold
Regarding owner occupiers making up the greater proportion of buyers, while yield is not directly relevant, it is from a value for money perspective. ie. if it's going to cost you a motza in outlay and transaction costs to upsize by a room or two or to move to a similar abode but one suburb closer to that ever elusive CBD, why would you bother? And if you did make such a commitment and the capital gain fairy didn't keep paying you a visit, you'd be left pretty financially vulnerable if others started cashing out around you. Yeah, I know, capital gains have never been more than a few years absent in the past, but with an ever decreasing pool of buyers of existing expensive stock, the risk of tears becomes much greater.
Without yield, it all becomes rather speculative doesn't it? May as well build IP houses out of gold
Correct. But people still buy gold.
I remember reading somewhere that in Tokyo right before their big crash average yields were about 0.2%. Ouch.
re yield ... not if you've done your homework in regards to building costs and current rental in an area.
re upgrading ... who said 69.9% of ppor buyers bought with logic rather than emotion?
....because gold isn't an asset.....
Not in my investment portfolio it's not. I have a simple rule: no yield, no buy.
not with me either, no yield not an investment although I do consider my PPOR as an asset as I leverage against it to buy other income producing investments. It also has the added benefit of providing a roof over my families head.
A bit hard for gold to do that.
I can't believe all those idiots buying art.
I suspect art os one of those things that you need to understand, appreciate and spend plenty of time being involved with. Me, I'd never own art as an investment.
no, it's not.
or cars or etc.
if you appreciate art and it goes up in value good luck to you.
i have an extensive coin collection, lots of gold and silver. the boiled down metal value would be only worth 10's of k's, the rarity value is more likely in the hundreds. collecting is a hobby that has been a good investment if i ever sold up, but that's not the purpose. i imagine art is the same.
gold (as in bullion) or gems or any other like thing is an Armageddon trade item. only hold as much gold as you can hide IN your person.
I have Gold (by inheritance) but frankly, it makes no sense.
It only has a value because we say so. It is actually worthless.
It cannot feed you. It cannot warm you or house you.
I wonder how many Gold Items were traded for a simple loaf of bread in the WW2 Concentration Camps. The value would have crashed.
Yet, I realise people have to have something.
There are some great books on VALUE like the "Affluenza" and "Priceless" fyi. Worth a read.
Peter
It only has a value because we say so. It is actually worthless.
It cannot feed you. It cannot warm you or house you.
I wonder how many Gold Items were traded for a simple loaf of bread in the WW2 Concentration Camps. The value would have crashed.
Yet, I realise people have to have something.
There are some great books on VALUE like the "Affluenza" and "Priceless" fyi. Worth a read.
Peter
Please don't tell us how you know how much to hold...
see blue...
You're not with the program Peter
Read up on "Fiat money"."Fiat" means "by law" and the notes in your pocket only have value by an act of parliament. US$s, although worth about the same as ours HAS NO LEGAL STANDING here. No one is obliged to accept them as payment. Gold is the only currency which is not someone else's liability, ie It has no counter-party risk.
We live in an unstable world and people who feel insecure look to gold, not governments.
