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1) Agree but who is saying that every property doubles every 10 years? No-one on here that I know of...
To help along with HG's understanding, this is a DOC I did to prove to myself the concept of the 10% ish thing for houses I lived in as a kid since 1974.
Sorry Sommersoft - I'm deleting my post because .... well it was a tad trollish on my part. This is your Forum.
If you could indulge me I'd appreciate it but if you don't .... well that's cool to.
Thanks
Gcs15
From what I can gather firefly has been working for about 15 years and hasn't saved anything. Whose fault is this. I don't see firefly ever getting a house and it will have nothing to do with affordability. Firefly obviously can't handle money and is very poor at decision making.
HG,Household debt is scarily high in this country, it is only a question of when it will get too large to service, and then we will eventually have to stop borrowing more than we make.
When that happens, we'll see asset price collapse. It is just a matter of *when* not if the day of reckoning comes...
Yes, fumagators have been in to get rid of terminites at 'alternate' forum... actually no, a few of us have heard about this forum and as one of your posters pointed out... until you can sensibly debate both sides of the argument, you do not understand the topic very well.HG,
You're right in stating its "only a question of when it will get too large to service", but don't make the mistake of correlating house prices with servicability. I make this point time and time again but noone seems to be listening.
It is not the price of the property that determines its affordability, it is the percentage of take home pay devoted to servicing that mortgage!
Prices can, and probably will, continue to rise for the foreseeable future. In my opinion there is two main drivers behind this:
1. There is significant equity in existing housing stock now that prices have risen so much. As a result, trading up is easier with managable mortgages. The ripple upwards effect means house prices at all levels can keep creeping up.
2. And probably more importantly, banks now have shared equity loans. You don't need to borrow the full price of the purchase any more. The banks will wear some of the debt for a share of the equity growth upon disposal. This means prices keep rising significantly but that the percentage of take home pay used to service the mortgage stays manageable.
Its a crazy equity world, but don't think for an instant that it is going to implode any time soon. I reckon there's at least another decade in it and beyond that is just far too much crystal ball gazing for me.
Cheers,
Michael.
Hi Rastus,I'm interested in your perspective of the Shared Equity concept that the banks have put forward.
Are there many people doing this for IP's ?
Having said that, I don't know if shared equity are such a good thing (bigger picture)... it's just pushing up a market to new highs when it probably needs a good rest (as opposed to a major correction).
Never a truer word was spoken!Things just dont happen… sometimes we need to make them happen.
Thanks HG (Nelson)See post:
http://www.somersoft.com/forums/showpost.php?p=320229&postcount=431
I did quote them:
http://www.somersoft.com/forums/showpost.php?p=320276&postcount=434
Yo-yo, do you even read the posts? this is like the 2nd time in 2 days you have said something that could be found by reading just a few posts above yours...
Thanks HG (Nelson)
Unfortunately, I asked for posts that quote people on the forum that state that every property will double every 10 years... simpily quoting your own babble doesn't count... sorry. Also if you carefully read what DavidMc has written, he only writes from a historical perspective... ie stating average performance in the past. He doesn't predict the future.
Did you click the top link?
Doubling in 10 years is 7% yearly compounded gains. Has NOBODY ever said anything like this on the forums? Why would you buy properties that run at a loss and even if owned outright return 1/2 the risk free rate of cash but with cash you don't have to deal with tenants or in fact do *anything*. If you didn't expect this kind of gain why are you buying such crappy yields?
David MC is writing from a historical perspective? He made up something, used it as evidence and I proved he was off by many many many orders of magnitude. he was as far wrong as someone saying "there a 100 grains of sand on this beach" or "there are 1000 planets in the universe" he is THAT wrong.
that no one expects EVERY property to double every 10yrs.