Capital gains.. from where exactly?

I’ve been acquiring Residential Property in Adelaide for years.. its gone well.. great capital gains. But what does the future hold for the portfolio as far as capital gains go? I’ve come to the conclusion that at best, nothing. At worst, a slow decline in values.


Most Western societies are perhaps now in their twilight, we’ve been gorging ourselves on Petrochemicals for the last 80 years. We’ve built a society around the idea that oil is endless. The layout of our suburbs, our shops, our schools, our jobs are all predicated on a free and easy supply of oil. The price of petrol is going to skyrocket over the next few short years, its perhaps not inconceivable that we’ll be paying $5 a litre in 2 years time. The effect on the family budget of a doubling in petrol prices is not just related to the cost of fuelling the family cars, it related to almost every single good and service that we consume.


Increases in property prices are based on demand, demand is largely determined by affordability. With petrol prices rocketing upwards affordability drops without a corresponding significant rise in wages. I believe new IR legislation in Australia will see wages DROP in real terms over the next few years. Increases in fuel costs will see a greater percentage of the family budget go towards petrol and funding increases of those goods and services affected by rising oil prices... This will come from the discretionary spending portion of most peoples budgets. Drops in spending on entertainment, doodads and toys will lead to job losses in those sectors. Job losses will create a larger pool of unemployed people, a larger pool of unemployed people keeps wages low.


Low wages, low affordability, less demand for houses, no capital gains.


Whilst driving to work this morning I pondered the idea of liquidating almost all of my property portfolio, keep some units close to the city and sit on the cash for a while.. I can always buy back in if I’m utterly wrong when the next boom starts to kick off.. I have enough insight into the market now to read the trends and I have the confidence to act on them.


I just don’t see any prospect of capital gains in the suburbs in the next 10 years if at all perhaps (on a standard buy and hold). The problems of climate change and a lack of oil are breathtakingly serious.. massive, foundational changes are going to take place in the way humans live in a post-oil world.. Property must suffer surely?

Where can the capital gains come from over the next 10 years? I know there's been threads on peak oil here etc.. but are we on the cusp of a massive reconfiguration of our society, as an investor with significant suburban property should I act on my hunch? or have I got it completely wrong?
 
I would say such a scenario would have a profound effect on property prices... those places in walking distance to a train station, or the city or a major commercial area will skyrocket... those that require a 30 minute drive will plummet. Said areas will become mini-cities with a high concentration of apartment towers similar to singapore. Most cities are in the very (very) early stages of this.
I think such a shift could take 50+ years.
 
Fascinating post Duncan.

I suspect it will challenge the widely held viewpoint of more than a few people here (myself included?).

For that reason the first thing that I'd like to say (and perhaps others might wish to ponder) while I am thinking about this is something that Milton Friedman once said:

"the crucial test of any hypothesis is found in it's predictions, not it's assumptions"

Mark
 
gooram said:
I would say such a scenario would have a profound effect on property prices... those places in walking distance to a train station, or the city or a major commercial area will skyrocket... those that require a 30 minute drive will plummet. Said areas will become mini-cities with a high concentration of apartment towers similar to singapore. Most cities are in the very (very) early stages of this.
I think such a shift could take 50+ years.
+++++++++++++++++++++++++++++++++++++++
Dear Gooram,

1. One man''s meat is another man's poison. To each his/her own.

2. Having borned and lived in Singapore over-congested city-life, my family and I are planning to migrate over to Australia so as to enjoy its more spacious suburban + lower-paced relaxed life-style. We also valued our privacy and space to be let along by ourselves as what some top actors/actresses are doing when going for a quiet and peaceful vacation overseas where they can fully enjoy their own privacy as they are not as well known there.

3. Thus, it is dangerous to simply generalise and conclude that areas within walking distance of amenities in the CBD is the preferred choice of living for all the people;- even though I know of some visiting Singaporeans who have complained about Perth CBD being too quiet and lacking in dynamism + vibrancy, as they have experienced and enjoyed back home in Singapore.

4. While we have such areas in Singapore, they are largely lived in mainly by foreigners. It was never a preferred choice for most of the local people in Singapore, given its ever 24- hours noisy hustle and bustle and over-congested street areas/wlaking malls and shopping centres etc.

5. As far as local Singaporeans are concerned and from what I know, it is still the landed properties that are socially, deemed more desirable and preferred due to available space and present acute land scarcity in Singapore.

6. For your kind update, please.

7. Thank you.

regards,
Kenneth KOH
 
duncan_m said:
Whilst driving to work this morning I pondered the idea of liquidating almost all of my property portfolio, keep some units close to the city and sit on the cash for a while.. I can always buy back in if I’m utterly wrong when the next boom starts to kick off.. I have enough insight into the market now to read the trends and I have the confidence to act on them.

You say you have confidence in your ability to read the property market. Do you have confidence in your predictions about oil and the other things? If not then selling most of your portfolio would be an expensive exercise without any real data behind it.

John.
 
duncan_m said:
I’ve been acquiring Residential Property in Adelaide for years.. its gone well.. great capital gains. But what does the future hold for the portfolio as far as capital gains go? I’ve come to the conclusion that at best, nothing. At worst, a slow decline in values.


Most Western societies are perhaps now in their twilight, we’ve been gorging ourselves on Petrochemicals for the last 80 years. We’ve built a society around the idea that oil is endless. The layout of our suburbs, our shops, our schools, our jobs are all predicated on a free and easy supply of oil. The price of petrol is going to skyrocket over the next few short years, its perhaps not inconceivable that we’ll be paying $5 a litre in 2 years time. The effect on the family budget of a doubling in petrol prices is not just related to the cost of fuelling the family cars, it related to almost every single good and service that we consume.


Increases in property prices are based on demand, demand is largely determined by affordability. With petrol prices rocketing upwards affordability drops without a corresponding significant rise in wages. I believe new IR legislation in Australia will see wages DROP in real terms over the next few years. Increases in fuel costs will see a greater percentage of the family budget go towards petrol and funding increases of those goods and services affected by rising oil prices... This will come from the discretionary spending portion of most peoples budgets. Drops in spending on entertainment, doodads and toys will lead to job losses in those sectors. Job losses will create a larger pool of unemployed people, a larger pool of unemployed people keeps wages low.


Low wages, low affordability, less demand for houses, no capital gains.


Whilst driving to work this morning I pondered the idea of liquidating almost all of my property portfolio, keep some units close to the city and sit on the cash for a while.. I can always buy back in if I’m utterly wrong when the next boom starts to kick off.. I have enough insight into the market now to read the trends and I have the confidence to act on them.


I just don’t see any prospect of capital gains in the suburbs in the next 10 years if at all perhaps (on a standard buy and hold). The problems of climate change and a lack of oil are breathtakingly serious.. massive, foundational changes are going to take place in the way humans live in a post-oil world.. Property must suffer surely?

Where can the capital gains come from over the next 10 years? I know there's been threads on peak oil here etc.. but are we on the cusp of a massive reconfiguration of our society, as an investor with significant suburban property should I act on my hunch? or have I got it completely wrong?
+++++++++++++++++++++++++++++++++++
Hiya Duncan,

1. With SA still suffering from its old problem of declining population, personally, I do not think it is appropiate to adopt the "Buy-Hold-Never Sell" investing strategy under such an operating environment unless you are truly rich and able to safely and profitably hold the property portfolio long term.

2. From your own posts, it seems that "Buy into the Rising Market and Sell at Market Peak" during very property cycle seems to be a better and more profitable investing strategy for those investing in SA as your own investing experiences seems to be suggesting.

3. For your kind update and further discussions, please.

4. Thank you.

regards,
Kenneth KOH
 
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Duncan, the problem I have agreeing with you is that every few years for decades there has been some convincing "reason" why property isn't going to continue to grow. Thing is, "solutions" keep popping up proving those reasons wrong. People need shelter and prefer the best they can afford, society gets richer over time, ergo, prices will continue to rise. :)

The glass is half full !
 
Kenneth,

I think you missed my point. It was not an attack on the Singaporean society, I was merely using Singapore as an example of high density living. There were no assumptions that this was their preferred lifestyle.
With rising petrol prices comes a shift towards alternative transport including inexpensive options such as trains and bicycles. As a result, the locations which afford such transport options will be in high demand. As we know, land in high demand is often developed into dwellings which produce the highest possible return, i.e. apartment blocks.
 
johnnyb said:
You say you have confidence in your ability to read the property market. Do you have confidence in your predictions about oil and the other things? If not then selling most of your portfolio would be an expensive exercise without any real data behind it.

John.

Last night on Lateline John Howard said "It's the greatest worry of my political life, petrol, in terms of its impact on the average Australian"

Transcript : http://www.abc.net.au/lateline/content/2006/s1703364.htm

So I'm by no means able to make insightful predictions about oil prices.. but it seems to me that other experts have been doing that for years, but with increasingly strident tones in their voices over the past few years.. if the middle east really explodes, if another hurricane wipes out production in the Gulf of Mexico and if terrorists blow up a refinery somewhere it seems to me the pace will not only accelerate but explode..

Surely rising fuel prices are absolutely inevitable, their cant be anyone left with their head in the sand still can there??
 
Kennethkohsg said:
1. With SA still suffering from its old problem of declining population, personally, I do not think it is apopropiate to adopt the "Buy-Hold-Never Sell" investing strategy under such an operating environment unless you are truly rich and able to safely and profitably hold the property portfolio long term.

I can hold but it'd be a wealth consuming exercise.. especially if we entered a 15yr period of zero growth.. (unless rents skyrocketed, but affordability constrains these too surely?)..

The thing is.. I think we're entering a massive period of reorganisation for the world.. our blind allegiance to oil over the past 50 years.. in the face of impending shortages has really come back to haunt us.. the choice we made to set up our society in such a way as to be dependent on the oil is now like a loaded gun against the head of our economy and individual wealth..

So I can hold.. but it looks pointless?
 
mdk92 said:
Duncan, the problem I have agreeing with you is that every few years for decades there has been some convincing "reason" why property isn't going to continue to grow. Thing is, "solutions" keep popping up proving those reasons wrong. People need shelter and prefer the best they can afford, society gets richer over time, ergo, prices will continue to rise. :)

The glass is half full !

I've heard this approach and concept at many wealth seminars I've been to.. it gives new investors those nice warm fuzzies in their tummy that gives them the confidence to buy..

We can't choose to NOT tease apart this issue by whispering these property spruikers sweet nothings in each others ears.
 
mdk92 said:
Duncan, the problem I have agreeing with you is that every few years for decades there has been some convincing "reason" why property isn't going to continue to grow. Thing is, "solutions" keep popping up proving those reasons wrong. People need shelter and prefer the best they can afford, society gets richer over time, ergo, prices will continue to rise. :)

The glass is half full !
+++++++++++++++++++++++++++++++++
Dear Mdk92,

1. Your glass can only be "half full" or "full" provided the house prices keep rising over time.

2. Having see how properties have drastically fallen from their previous market peaks in Japan (-80%), Hong Kong(-60%) and Singapore(40%) over the last 20 years, I still think that it is still safer to investors to consider to "buy-low-sell-high" kind of short-medium term investing strategy during each property cycle so as to "make hay while the sun shines" rather than trying to make some hay out of the Winter months.

3. This is especially so in SA where a declining population trend has always been reported despite the Australian Govt to grow its population there.

4. For your kind update and further comments and discussion, please.

5. Thank you.

regards,
Kenneth KOH
 
duncan_m said:
I can hold but it'd be a wealth consuming exercise..
especially if we entered a 15yr period of zero growth.. (unless rents skyrocketed, but affordability constrains these too surely?)..

So I can hold.. but it looks pointless?
+++++++++++++++++++++++++++++++++++
Dear Duncan,

1. If this is sincerely your honest beliefs and assessment for the SA's property market, then why bother to hold in the first place?

2. Aren't there better way of deploying your funds to earn better returns and more wealth for yourself, in the mean time?

3. Looking forward to your kind clairfications and further comments, please.

4. Thank you.

regards,
Kenneth KOH
 
Duncan

I see nothing wrong with selling property and sitting back and watching for the sidelines and then buying back in later on.

I'm probably not as pesimistic about the long term as you are.

This is part of my approach ( not saying it's the best way , it's just something I feel comfortable with re SANF ). We have sold down over half of our portfolio over the last two years . We've used this to fund a development and once we've finished this , plan to sell and then watch from the sidelines before buying back in. We could have sold it and then paid off ( put the money in offsets ) the remaining properties in which case we would have had a genuine cash flow portfolio.

I'll consider buying back in , in different senarios .


  • I see an absolute bargain - not talking about 10 - 20 % off here
  • I see evidence that the market is going ( yes I think you can see this ) to start moving . I'm a strong believer in the property cycle.
  • I see good evidence that a particular area is going to move in an otherwise flat market . If I see very strong reasons why a certain area will out perform other areas in the coming years , I might put my toe back into the market in a small way

See Change
 
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But selling and then buying back real estate is so inefficient!

1) Unless it's the family home then CGT takes up to almost 1/4 (even with the recent drop in the top MTR) - although this is true of other asset classes

2) Agent's commission & associated costs - far better to sell your shares/redeem funds as brokerage is much lower

3) new stamp duty when you buy back in (ouch :eek: )

4) in many states still mortgage duty (although if you wait until 2012 it may have been abolished in NSW by then :rolleyes: )

5) time in finding an asset as good or better than the one you just sold

Couldn't you just borrow to the hilt against the high watermark valuation and sit it in your offset and live off and service the debt from those loan proceeds plus whatever consulting income/rent you bring in?

Doesn't the equity (and cash extracted through debt) buy you TIME?

If your view is that there's 10 years to run until new growth then I guess you need 10 years of living expenses plus 10 years of debt service...

One qualification to the above (and I think this is what seech has done - pls correct me if I'm wrong) is that if you've bought in regional areas and have experienced v.strong growth, have formed the view it will be a v.long time until further growth AND you want to reduce your RISK in holding regional properties vs city properties (not a debate I want to go into but IMHO regional is typically riskier) then perhaps that risk reduction is a reason to exit that regional market.

As I mentioned, the sheer inefficiency of buying and selling property suggests to me you need a very good reason to sell. Especially if you're thinking you will at some stage buy back in.

Just my 2.2 cents worth

Cheers
N.
 
Fascinating post Duncan.

Too often those with a vested interest in property have tended to avoid asking the critical question of where capital gains will come from as you have.

And even when it is asked, the stock standard answer is either population growth (a growing population = capital gains) or, for more sophisticated observers, the rate of household formation, which has tended to exceed population growth.

If the former was correct, then the more populous US would have vastly higher house prices than Australia, which in turn would be vastly dearer than NZ, and we know that generally this is not the case. And as for the latter, other developed countries have had similar (if not greater) demographic change than Australia, yet the English speaking countries have tended to have higher real estate price growth.

Other answers include the rise of the dual income family (so household incomes have risen by more than individual incomes), but again this can't continue forever. And this was happening in the early '90s when prices fell or were static.

duncan_m said:
Most Western societies are perhaps now in their twilight, we’ve been gorging ourselves on Petrochemicals for the last 80 years. We’ve built a society around the idea that oil is endless. The layout of our suburbs, our shops, our schools, our jobs are all predicated on a free and easy supply of oil. The price of petrol is going to skyrocket over the next few short years, its perhaps not inconceivable that we’ll be paying $5 a litre in 2 years time. The effect on the family budget of a doubling in petrol prices is not just related to the cost of fuelling the family cars, it related to almost every single good and service that we consume.

I am not so pessimistic. Note that cities like Melbourne had suburbanised by the end of the 19th century, 50 years before mass car ownership. The train and tram networks, grid streets and local shopping strips show that suburban living existed and thrived when car ownership and use was lower than now. Melbourne suburban housing densities now aren't much different to 100 years ago before cars.

You are right that suburbs and shopping centres built in the last 30 years presuppose endless cheap oil. And contrary to what many think, our retail structures, location of employment and street layouts are more important than small changes in residential densities.

Within cities, the inner suburbs may continue to grow relative to the outer suburbs. However these are not universally affordable, so convenient locations near outer suburban shopping and transport nodes will be the next best thing.

Sydney, Melbourne and Adelaide contain many pre-1970s suburbs. A majority of all three city's population live in such areas. Perth, due to its higher growth rate, houses only a fraction of its population in older suburbs.

Being an 'old' city with old walkable grid street layouts, Adelaide might be in a better position to weather higher petrol prices than the newer suburbs which dominate Perth.

However that should not be a foregone conclusion; Perth has invested far more effectively in public transport than any other Australian city, and for what it has spent it has got better value than the equivalent expenditures in other cities (eg Melbourne).

Getting back to Adelaide, unless it can grow in pharmaceuticals or higher education, it might be stuck with the car industry and its suppliers. If it doesn't change, the latter could be a liability since it largely produces over-powered 'dinosaur' cars unsuitable for an overwhelmingly urban population facing high fuel prices. If Aussie cars were to continue to lose market share to the imports then that could depress employment.

Increases in property prices are based on demand, demand is largely determined by affordability. With petrol prices rocketing upwards affordability drops without a corresponding significant rise in wages.

If it's any consolation, the national government has some bearing on petrol due to fuel taxes. Scrapping fuel taxes (though irresponsible since it encourages even more consumption of a scarce resource) could be used by a future government as a form of Keynesian pump-priming (and vote buying) during the next recession.

I believe new IR legislation in Australia will see wages DROP in real terms over the next few years.

As I understand it, IR reform occurred in two main phases.

The changes up to 1996 mainly sought to decentralise wage setting away from awards to enterprise level agreements.

The 2005 changes effectively want people to go on individual contracts. Every man is for himself, the 'no disadvantage test' provisions have been scrapped and minimum standards have been reduced.

Although the new laws are complex and many businesses may not bother about them, their theoretical underpinning is a free market in labour, with wages rising and falling according to supply and demand.

Hence a deregulated labour market is effectively a transfer of benefits to whichever party has the most market power at the time. Not just a wage cut, as some over-simplify it.

Sure at the low (unskilled) end wages will fall, but at higher levels of the labour market wages will probably rise. So salaried people with scarce skills could well be advantaged.

If the people at the bottom still earn enough to buy their home, then house prices may well be more dispersed, with cheaper suburbs showing poorer capital gain but rich areas doing well.

But if lower earners become only rental or (worse) trailer-park residents (as per some US areas), then prices at the bottom end might fall even more. If there's more renters then yields might firm, but not if rents become unaffordable relative to incomes.

Increases in fuel costs will see a greater percentage of the family budget go towards petrol and funding increases of those goods and services affected by rising oil prices... This will come from the discretionary spending portion of most peoples budgets. Drops in spending on entertainment, doodads and toys will lead to job losses in those sectors. Job losses will create a larger pool of unemployed people, a larger pool of unemployed people keeps wages low.

Substitute 'housing' for 'fuel' and you could make much the same observations for the same reasons.

But people by and large don't.

There are some double standards at work here.

Like 'good' and 'bad' debt, I have decided there is 'good' and 'bad' inflation in the popular imagination.

'Bad' inflation is things like petrol prices, bananas and all the other stuff that makes the CPI shopping basket. 'Good' inflation is surging asset prices, as in real estate and shares. Even though both indicate declining affordability, the latter form of inflation is often considered a measure of confidence and prosperity, whereas the former is thought the reverse.

Interest rates are a bit different; in this case low is good and high is bad, but for the oldies who get income from cash investments then the higher the better, provided inflation stays low.

The problems of climate change and a lack of oil are breathtakingly serious.. massive, foundational changes are going to take place in the way humans live in a post-oil world.. Property must suffer surely?

Where can the capital gains come from over the next 10 years? I know there's been threads on peak oil here etc.. but are we on the cusp of a massive reconfiguration of our society, as an investor with significant suburban property should I act on my hunch?

If this is a worry, maybe ask if you could live in every one of them without a car. Don't be a recluse; assume a full range of work and leisure activities, or a masochist; anything beyond 15 minutes walk or cycle is too far. If you can, then hold onto them.

But before doing anything, it would be interesting to research the early 1970s period (just after the Club of Rome report predicting resource depletion) and the period around 1979 (big petrol price rises) to see what happened there.

Humans are very adaptable. If we are capable of building mega malls and McMansions then we are equally capable of building more sustainably. And there must be huge opportunities in renovating existing tired suburbs, eg opening up cul de sacs, such as an urban renewal project in Perth is currently doing. Adelaide with its underutilised rail system and ageing suburbs could have particular opportunities, though these are easier to exploit when the population is growing.

Peter
 
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duncan_m said:
I've heard this approach and concept at many wealth seminars I've been to.. it gives new investors those nice warm fuzzies in their tummy that gives them the confidence to buy..

We can't choose to NOT tease apart this issue by whispering these property spruikers sweet nothings in each others ears.
I have data going back hundreds of years showing compound growth in property, well before we were oil dependant anyhow.

Who knows what massive changes the next few decades will bring? I am betting that the trends of hundreds of years with property will not greatly change however.

And as for a general approach of converting real estate into cash, I don't think that will be the wisest choice. Surely all our fiat currencies are under much greater threat than our houses as stores of wealth.

Probably the wisest choice if you have that luxury is skilled diversification, have enough of everything so that you will do well in almost all situations.
 
NigelW said:
But selling and then buying back real estate is so inefficient!

Couldn't you just borrow to the hilt against the high watermark valuation and sit it in your offset and live off and service the debt from those loan
One qualification to the above (and I think this is what seech has done - pls correct me if I'm wrong) is that if you've bought in regional areas and have experienced v.strong growth, have formed the view it will be a v.long time until further growth AND you want to reduce your RISK in holding regional properties vs city properties (not a debate I want to go into but IMHO regional is typically riskier) then perhaps that risk reduction is a reason to exit that regional market.

As I mentioned, the sheer inefficiency of buying and selling property suggests to me you need a very good reason to sell. Especially if you're thinking you will at some stage buy back in.

Just my 2.2 cents worth

Cheers
N.

Purchase price 87,500 , Sell 202,500. There's a reasonable after tax profit in that especially considering the deposit was 10 % ( funded out of LOC , so none of our money was used ). Holding frame 3 years .

We didn't spend alot of time selecting properties as we put our effort in the timing. We bought pleasant houses for the area without any major draw backs at good prices .

Only borderline cash flow at original purchase price. We bought more than one house of people for less than they had paid several years ( up to about 10 years in one case from memory ).

Reason to sell . I don't see much further growth in regionals at this time of the market and it might be a long time before they move again .

I think for the 25 % tax I'm paying , I can do more with the money else where . If the next cycle is any thing like the last one ( which was 14 years from peak to peak in Sydney 89 - 03) it's going to be a long time before there is significant further growth .

Not really risk management ( though that is there as well ), just (hopefully ) more efficient use of our money.

See Change
 
Andrew_A said:
I have data going back hundreds of years showing compound growth in property, well before we were oil dependant anyhow.

Although I can't see the logic in assuming that just because property has grown in the past it will do so equally in the future, I agree that oil isn't much of a factor. At least in the 'we'll all be ruined' sense.

Consider settlement patterns circa 1949 when petrol rationing was still in force. You were a property investor, could somehow circumvent the restrictive lending environment and were looking at expanding the portfolio. Menzies had just been elected so you felt secure that your holdings wouldn't be nationalised.

Then someone came up to you and said that we were going to use a whole heap more oil (in fertiliser, industry and transport), but not to worry, oil was being found everwhere (which was true).

Would this worry you?

Not so far.

Now, supposing they pointed out that cars and buses meant that suburbs could be established beyond and between train and tram lines.

The effect of this would have been to immediately increase the supply of land that could be used for homes and shops. Vast areas of land between railway corridors could then be settled.

Instead of 1km to a centre being considered an easy walk (10 min) and attracting high amenity value, the goal posts shifted so it became 10 min on the bus or a 5 min drive. Which of course means a much magnified area could be considered 'close' to a centre - maybe up to 5km radius. Which increases the possible area within 'easy access' by 25-fold!

It would have been very possible to mount a sound argument that with much more land supply available, and a declining need to be near fixed rail, location was becoming less (not more) important. Location constraints could be relaxed and scarcity value of existing centres could drop. And without scarcity value, wouldn't it be fair to assume that there wouldn't be much capital gain in coming years?

As we know this did not happen and the period since 1949 has seen significant rises in property values. So the person who ignored the above reasoning would have made money, but the person who followed it to its logical conclusion may have lost.

To me the main effect of scarce oil is that it might reverse the postwar trend of location becoming less important (at least in relation to transport). The revival of location could be advantageous to those who have bought in a handy area (which need not be inner city). Especially given that only a minority of properties (even in inner and middle suburbs) are so well located that their oil dependence is low, scarcity gradients (the degree to which values drop with distance from an attraction) could get steeper if people are only willing to travel shorter distances.

Peter
 
I made my first bundle by shear dumb luck and my last by, you guessed it, shear dumb luck. The only real profit in property is that thing called capital gain! You can have a lot of tenants paying rent but rent is really peanuts. If you can't see capital gain in YOUR near future then you are better off having the money in the bank. I cashed up (mostly) 2 years ago because I could not see any possible capital growth in my lifetime. You are a smart bloke, tell me I'm wrong!
 
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