Glad you didn't buy property in Japan in 1990??

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From: Sergey Golovin


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Reply: 2.1
From: Brett Burt


(Sorry about the long post....but like most long range predictions and
commentaries, they are very 'windy.')

Re Japan. Same thing will probably happen here when Baby Boomers reach
maturation, post retirement (2010 to 2020), and the western world is awash
with super/mutual fund money trying to & competing to get a return and
interest rates are .5%.

This all happened in Japan in 1980's. You know,.... when 'Made in Japan'
instead of being crap (if you remember the 60's you will know) came to mean
better than 'Made in USA/Britain/Australia'. BUT they had too many retirees,
not enough workers to retirees, too much unplaceable cash, not enough rent
on retirees money, negative birth rates, no immigration, they buggered it
up.

Property Bubble was created as people pushed up values by paying too much
to start with for property in 60's through to late 80's (sounds familiar?).
It maybe happening now here, or starting to happen here, as this huge
population bulge, Baby Boomers, starts to retire at 55, but the full force
won't happen or be evident for about 10 years. Then I feel property values
will drop dramatically. But not in all sectors.

The generations following, for many reasons, will suffer because of this,
they don't have the advantages the BBers had, particularly with property.
In fact the much smaller young population will want less housing. There will
be much less demand. Not just because it has gotten to expensive. People
will stay home longer, of course they will rent but generationally there are
far fewer of them, so there will be less renters.

Population growth will zero or negative. Also the parents of the Baby
Boomers die off and leave lots of deceased estates but no one wanting to buy
them. Too expensive. Thus no demand...no value growth and probably
depreciating values and zero infation. The upside is that this could then
make it easier for the following generations to enter property market as
values plummet and maybe kick a property growth cycle off again, post 2020.
Hopefully the surplus will have dried up and hopefully we will have higher
immigration and birth rates.

However this scenario is about 10 years off for this country. So buy up now
and get out of mainstream residential investment property, before 2010. Then
buy back in 201? 'a la Packer', buy property up to 50% less, back to it's
2000/2 price. (A Sydney house on average, I truly believe, will be worth
around double today's value in 7 years. Because of low inflation, 2001-2010,
so it won't be as bad as it could have been.)

Every property investor should be hedging now with with the stock market via
blue chip shares and business creation strategies. I am following these
strategies now. (Have a look at some IT and telco companies. Some of them
will be the Ford's, GE's, GMH's and Microsofts of this new century and are
currently very cheap. Good value here, eg Cisco.)

My belief is that mainstream residential property will collapse but come
good again. Most gurus will be caught in the collapse as will their
disciples. Much of the information we get from the various property 'gurus'
is based on the property market since WW2. After this a once in 500 years
phenomena occurred, the Baby Boomers, which represents huge societal,
attitudinal shift & population eruption where everything leaps ahead. So
from the 50's to now we have been reaping the rewards of a massive
population bulge of highly innovative people that changed the world
completely.

This may not happen with the next generations and therefore the dynamics of
property ownership/investment etc might be radically different over the next
50 years.

The next 20 years will be a massive money making period with vast amounts of
wealth available for the taking, in services, medicine, leisure. The rich
old Baby Boomers will have heaps of the stuff to throw around. (Hope I am
one of them!).

If they spend it on holiday homes, travel this may cause that part of the
market to ride out the drop due to the large demand in that sector but it
will be very narrow focused locales, developments and types of property. The
Internet may also throw a spanner in the works, to allow us to move out to
Dubbo and Bourke to work and live. Such a change in society would wreck
havoc on property values in Sydney and Melbourne. (Not Brisbane because it
is still a big country town in my view !). As an example can you imagine the
world shift in power when we finally get hydrogen (water) powered cars ?
Fossil fuels like oil would be nearly worthless.

The Japanese experience is a little ways off though and I could be way off
the mark due to the peccadilloes of Japanese economy and culture. But I
think we ought to look closely at what happened in Japan after WW2.

I am predicting a very wealthy period over the next 20 years but people top
heavy with residential property investments will be savaged when that bubble
busts in the next 7-8 years. People really should 'balance' their portfolios
to reduce the risk and not follow the property investment spruikers blindly.

I am going to print a copy of my post and see if my prediction (not mine
really as there are a few great books predicting similar/same scenario)
comes true. BB

My motto for the roaring 2000's, the greatest predicted wealth creation
decade in human history ? "Bite off more than you can chew,
then chew like crazy !"

----- Original Message -----
From: "propertyforum Listmanager" <listmanager@bne003w.webcentral.com.au>
To: <Recipients of 'propertyforum' suppressed>
Sent: Wednesday, December 26, 2001 9:44 PM
Subject: Glad you didn't buy property in Japan in 1990??


> From: "Scott Elsom" <selsom=somers@bigpond.com>
>
> Sorry
>
> Try this...
>
> http://abc.net.au/news/justin/weekly/newsnat-25dec2001-53.htm
>
>
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