Anyone bullish on IP growth now ???

[Bill.L]

Hi all,

Just wondering if there are any bulls left when it comes to purchasing now. Virtually everywhere I look, the word about residential property is that it will either bust or be stagnant for a few years. This includes on this forum.

If the crowd is SO certain a slowdown/bust is about to happen, what are the odds of the crowd being wrong??
What if the overwhelming majority took the advice that you could afford to wait a year or 2 to buy/build that home or start the investment plan.

While not trying to predict the future, in planning for the future all scenarios should be examined. For that reason I still see evidence that we could be in for a round of much higher inflation than most predict oil prices could be one catalyst, perhaps it will just come from money supply growth as in this article? The Bears Lair...

http://washingtontimes.com/upi-breaking/20040614-024308-4991r.htm

perhaps a bit of de ja vous

opinions please?

bye

 

[Sunfish]

Central banks and governments need benign inflation the way we need benign rain.

Like us they don't want a deluge. Without steady price inflation, why wouldn't you delay non urgent purchases? Delaying spending is deflationary and nobody want's that. Without price inflation, you would not borrow to buy an assett that gives a gross return of half your borrowing costs!

Everybody owning investment property is preying for inflation like a farmer preys for rain so what's wrong with a little inflation? Nothing, provided wages inflate too. This is theft of course. Borrowers repay debt with diminished $s and win big time. The losers are those who gave them the good $s originally, self funded retirees and savers generally. (See the catch 22 here?) Of course, the government, the biggest debtor of all, is the biggest winner. That's even before tax increases through bracket creep and stamp duties etc.

What nobody wants is stagflation, but I can't define that well. I know we had stagflation under the Fraser liberal gov and nobody liked it so they replaced him with Gough and the laborites. (Please forgive the over-simplification.) Essentially though, it seems to be where inflation rises, pushing up interest rates but without the wage rises and "boom" conditions one would expect. Sounds toxic to me!

Personally, I do not see much wage-push inflation which, long term, is the guts of leveraged investment. Without it you may get hurt.

What am I doing writing this crap at 4am?

Who knows? .... Thommo

Edit:- Just found this in the passage Bill refered us to which may have been "stagflation". The timing is correct.

Four percent may be a low estimate of where inflation ends up. M3 money supply, the best predictor of inflation, rose by 94 percent over the 7 year period from 1966 to 1973, an annual rate of 9.9 percent, or 5.1 percent net of the average 4.6 percent per annum consumer price inflation in those years. The result was high inflation in the late 1970s -- averaging 9.4 percent per annum in the eight years 1973-81 -- together with a collapse to almost zero of the historically healthy productivity growth that had been seen in 1947-73. (My emphasis)

 

[perky29]

Check out this article from today's "The Australian" - top End lifts property prices.....they seem to be bullish

http://www.theaustralian.news.com.au/common/story_page/0,5744,9957262%5E2702,00.html

 

[keithj]

Check out this article from today's "The Australian" - top End lifts property prices.....they seem to be bullish

http://www.theaustralian.news.com.au/common/story_page/0,5744,9957262%255E2702,00.html

An agent predicted this a couple of months ago in this thread. I was skeptical at the time.

 

[bicko]

Dont mean to be picky,
but I think Fraser replaced Whitlam and in turn it was

Bob Hawk who replaced Fraser.
Could have been that old 4am sindrome.

Cheers

Bicko

 

[Sunfish]

Dont mean to be picky,
but I think Fraser replaced Whitlam and in turn it was

Bob Hawk who replaced Fraser.
Could have been that old 4am sindrome.

Cheers

Bicko

John Grey Gorton then. But wasn't Fraser treasurer at the time?

T

 

[bicko]

Found this stuff,
not sure if he was treasurer under John Gorton.

10 Mar 1971
20th Prime Minister
After displacing John Gorton as Liberal Party leader, William McMahon was sworn in as Prime Minister.


06 Dec 1972
21st Prime Minister
Labor was elected to government for the first time in 26 years. Gough Whitlam and deputy Lance Barnard were sworn in to comprise the first ministry until a Cabinet was chosen.


11 Nov 1975
22nd Prime Minister
After the Governor-General Sir John Kerr dismissed the Labor government, Malcolm Fraser became ‘caretaker’ Prime Minister pending a general election.


cheers (sorry Im bored)

Bicko

 

[geoffw]

McMahon was a treasurer under Gorton. He was, as I remember, the first treasurer for many years to have a formal background in economics.

I was in the US when Mcmahon became Prime Minister. The only reason he was even noticed in the US was because his wife Sonia was photographed at the White House in a long dress slit almost to the hip.

The next bit in the chronology above is when his son Julian got a part on Charmed.

 

[Sunfish]

"William McMahon" became Sir Billy. Was always called Billy so may have been christened thus!

Who's bored?

 

[bicko]

As a reply to the opening post,
I think it depends on what part of the market you are focusing on.
Catering for the baby boomers might well put you in a bullish tidal rise of
growth.
What exactly are baby boomers looking for, when making there sea change/rural change/city change.
I don,t think anyone can put their finger on a high percentage winning formula.
Perhaps studying new trends which are emerging post Oct 2003 into mid 2005 may give us more certainty.

Double income no kids, here is another sector of the population with buying power. My humble opinion is that these guys like to congregate within 10km of the CBD in our cities.

Most other demographics are going to be priced out of median or above house prices, simply because they don,t have the deposit/servicability to drive prices up, by increased demand.

What is affordable to the average wage earning family?
Factor in some other debt and I don,t think anything over 300,000 is gonna be in their price range. With a few interest rate increases, it becomes harder.

My own internal conclusions at this point in time?

Quality property catering for cashed up retirees and DINKS (property offering location and lifestyle) are where Id be looking for continued growth, can I afford buy in into these types of investments (circa 400-550k+)(brisbane):

answer no!

Where will I target? well in the short term, until yields increase, undervalued properties under the 300k affordability line. Ones where I can get an immediate return on the 10-15% costs that I would incur.

So for me the only bullish activity that I can count on will be the bulls that I let loose myself.

cheers

Bicko

 

[Bill.L]

Hi all,

So far we have a couple who see areas that they identify as having continued growth.
Apart from the very high end does anyone agree with my original premise that the IP market is overwhelmingly bearish at the moment, or perhaps you disagree?

bye

 

[see_change]

I would be suprised if the top end continues to go up, It may be resilaint at the moment and not fall but I'm not convinced.

It can and has fallen significantly in the past.

I still think that there is room for growth in Far north Q'land , though it has moved at least 50 % so far. Another 50 % ? .... Time will tell.

See Change

 

[qaz]

Holly from teenage investor was talking about Nth Qld as a good affordable area for CG. But she prefers land over houses.

 

[D.T.]

Hi,

Yep. Still bullish on quite a few suburbs of Perth.

-Kind regards

Dave

 

[Peter Parker]

Hi,

Yep. Still bullish on quite a few suburbs of Perth.

Some suburbs of Geraldton (not necessarily those heavily bought up by investors) may have a some way to go in view of the projects ocurring there and them still representing good value compared to other coastal areas. Possibly also parts of Bunbury, which seems underpriced compared to Busselton.

Regards, Peter

 

[geoffw]

Double income no kids, here is another sector of the population with buying power. My humble opinion is that these guys like to congregate within 10km of the CBD in our cities.

If the DINKS are going to prosper, so are the LOMBARDS (Loads Of Money But A Real Deadhead)

 

[geoffw]

If the DINKS are going to prosper, so are the LOMBARDS (Loads Of Money But A Real Deadhead)

I saw Bernard Salt on TV briefly today- he's come up with another few acronyms

SLOBBs (Sad Lonely Old Baby Boomers)
OFFAL (Old Farts Finding Another Love)

 

[Les]

Eh, watch it, Bernard !!!

SLOBBs (Sad Lonely Old Baby Boomers)

Yep, I'm one of the oldest BB's - but sad? lonely? old? - I don't think so !!!! Sheesh, I'm a sprightly 61 year old .... how does that get to be "old"?

Anyway, Geoff, this was quite a "find" - a post from 2004 with doom'n'gloom written all over it. Not like that today (at least, not where I own property - quite the opposite in fact).

Regards,

 

[Dazz]

Apart from the very high end does anyone agree with my original premise that the IP market is overwhelmingly bearish at the moment, or perhaps you disagree?

Whoa, hang on there Bill....you've just dramatically changed your original question. In your original post you were only asking about residential property. Now you've changed your question to the "IP market". That's a whole different ball of wax, a much larger and more intricate ball of wax compared to just the residential market.

Just wondering if there are any bulls left when it comes to purchasing now. Virtually everywhere I look, the word about residential property is that it will either bust or be stagnant for a few years.

FWIW, buyers are still snapping up residential stuff around my neck of the woods as fast as they can get their hands on the stuff, and prices are still chugging along at probably 20% p.a. at a rough guess.

The stuf that we invest in, non-residential, is still going through the roof. Last 12 months the stuff has risen by 70%. Some 55% and some 82% p.a. I don't expect the growth rates on these to slacken off for at least another 2 or so years, where they'll probably plateau.

The reason I say that is that the nett rents have also jumped by 70% in the last year, with more reviews in the pipeline. Fortunately, the business profits have also gone up by the same clip, so the tenants can easily afford the rents and aren't squealing in the slightest. To me, this is the biggest feature differentiating the poorer residential tenants, and why the brake is not being applied earlier to capital growth rates.

Anyway, could be completely wrong about my all of the above. We've got our hat in the ring anyway, so we'll just sit back and see what the capital gain fairy brings us.

 

[JIT]

Interesting in this thread that people didn't seem overly bullish about the Perth market. Only 2 posts commented on the Perth market. Maybe there were other threads on Perth at the time?

GSJ