House prices

- Debt and stress - there is no reason debt should be associated with stress when used correctly - I would be looking very critically at my own mindset if I started to associate the two in this way.

I guess it comes down to knowledge and understanding on the subject.

My debt causes me no stress, however if my fiancée knew how much we had I think she'd have a freak out.
 
Just have to find the path that facilitates that - working overtime to get wealthy wouldn't qualify there IMO as an example.

Yes but most rich people worked very hard at some stage, and probably worked even harder as they got richer. So are they happy and have they achieved success? Is that the life all of you want to lead?

These people derive a sense of success from their achievement, not necessarily from their ability to escape a 9-5 job, because they actually end up working more.
 
These people derive a sense of success from their achievement, not necessarily from their ability to escape a 9-5 job, because they actually end up working more.

True it is possible to become wealthy by working very hard and putting in lots of hours etc just as it is possible to do it by working smart rather than hard.

Your comment about "most people" doing it the former way "at some stage" is probably correct. But that stage may be pretty small - eg a few months to close a deal on a cornerstone property in the portfolio.

I don't agree that "most" people have to go through a stage of putting in heaps of hours for years etc to become wealthy - I know a number of wealthy people who haven't - they just invested in the right assets at the right time and held on for the ride.

Achievement in your work is laudable enough for its own worth but is a completely separate concept to your wealth - again I like to have both! :)
 
I think Delta is referring to empire builders. They enjoy what they do so much that even though they had the means to retire or ease back from 9-5 30yrs ago, they love what they do and still head into work every day before everyone else and leave late.
 
I think Delta is referring to empire builders. They enjoy what they do so much that even though they had the means to retire or ease back from 9-5 30yrs ago, they love what they do and still head into work every day before everyone else and leave late.

Hi Steve

Going from Delta's questions "So are they happy and have they achieved success? Is that the life all of you want to lead?" I just wanted to make the point there is no obligation for it to be like that and plenty of people have made their wealth in a far more balanced way. This is just a stereotype of the wealthy like any other.

Of course, if work is your life and you don't want to do anything else then that's fine - it's just not a prerequisite for wealth... thinking otherwise is just another excuse for not pursuing wealth IMO - just like the "rich and unhappy" stereotype.
 
Hi Steve

Going from Delta's questions "So are they happy and have they achieved success? Is that the life all of you want to lead?" I just wanted to make the point there is no obligation for it to be like that and plenty of people have made their wealth in a far more balanced way. This is just a stereotype of the wealthy like any other.

Of course, if work is your life and you don't want to do anything else then that's fine - it's just not a prerequisite for wealth... thinking otherwise is just another excuse for not pursuing wealth IMO - just like the "rich and unhappy" stereotype.

Very true.

Property is good for that - great wealth builder for minimal time input. :)
 
Some weekend results from Melbourne...

http://www.realestate.com.au/cgi-bi...r=&cc=&c=86861720&s=vic&snf=rbs&tm=1255753355

Reserve: $550,000 SOLD: $606,000

http://www.realestate.com.au/cgi-bi...r=&cc=&c=86861720&s=vic&snf=rbs&tm=1255753355

Reserve: $550,000 SOLD: $605,000

http://www.realestate.com.au/cgi-bi...r=&cc=&c=86861720&s=vic&snf=rbs&tm=1255753355

SOLD: $653,000

http://www.realestate.com.au/cgi-bi...r=&cc=&c=86861720&s=vic&snf=rbs&tm=1255753355

Reserve: $530,000 SOLD: $596,000


Lots of bidding going on in $1,000 increments during a number of these auctions...

Are these prices really sustainable?
 
Are these prices really sustainable?

De-javu

This question has been asked before and during every boom ! Over 200 times on this forum alone !

When our next door property sold for over $560,000 in 2003, I was convinced that the buyer had rocks in his mind and he is not going to see any growth from those very 'unsustainable values" for atleast the next 6 years.

It sold last month for a tad under a million.

There is obviously a point where the values do become unsustainable. Not though in our massive population growth, low interest rates, booming economy phase. This is just the start of another boom.

Harris
 
It's always frustrating when people here harp on about things they have zilch idea about and are so dismissive of people who don't share their views. For the record I am not a bear, but just trying to instill some real facts rather than gross misstatements.

I haven't gone through JP Morgan's accounts so I cannot accurately say what percentage of their earnings come from property. Not a lot, i suspect, relative to the rest of their earnings.

Like everyone else, I don't believe trees grow into the sky. Prices never rise forever- there will be times when real (ie. inflation adjusted) prices go sideways or even down. The trick is to find value situations where real prices will RISE over time. This is, after all, a property forum. Aren't we all looking for bargains?

The cheaper end of metro Australia is selling at third world prices. Ample reason to buy rentable houses with land content, particularly those that can be redeveloped in the future.

The world's not going to end just yet. There IS a housing shortage and the cheaper end of the property market will do well in real terms. I respect a diversity of views. You are welcome to bash property - please do so using real (ie. inflation adjusted) wages vs real house prices. Feel free to show us charts to demonstrate how bubbly you think the cheaper end of the market is.
 
I think property prices will increase due to the popularity of the house market and increasing population regardless of the interest rates. The government wants to increase our population significantly by 2020, and when that happens, prices will double or maybe even triple!!!
Although interest rates will increase with the growth in economy however we also need to keep in mind that with increase in interest, there will be an increase in rent, so there's a balance between what you pay and what you get in return.
I believe it's never too early to start investing in property
 
I think Delta is referring to empire builders. They enjoy what they do so much that even though they had the means to retire or ease back from 9-5 30yrs ago, they love what they do and still head into work every day before everyone else and leave late.

Yes I am referring to empire builders. Don't really consider sub $20m equity/net assets to be wealthy, and I don't think it's that easy to build equity beyond $20m without working hard for quite a while at some stage. Just mindful we're not falling into the trap of thinking wealth equates to having 7 IPs worth $800k at 60% gearing.

bobmenzies, as said, for the record I'm not a bear so don't feel the need to create any charts, when JP Morgan has already done so. Perhaps you are Goldman Sachs, hence the authority, though I'm pretty sure he passed away many decades ago.
 
With interest rates on the rise ...do you think house prices will fall or rise?

Westpac asked the general public the same question in May, July & October in their Consumer Sentiment Survey. Their headline result was
73% expect prices to rise over the next year. All groups now strongly upbeat.

Some of the key points....
  • The October Westpac-Melbourne Institute Consumer Sentiment survey included a repeat of an extra question added in May and July asking consumers about their expectations for house prices over the next 12 months. It shows a broad-based consensus that prices will continue to rise.
  • Some 73% of respondents expect prices to increase over the next 12 months with 15.9% expecting no change and 9.9% expecting a decline. The proportion expecting an increase compares with 53% in July and 32% – a minority in May.
  • ...
  • The bullishness of consumers on house prices is striking given the RBA's 25bp rate rise in October (with warnings of follow on moves) and the start of the wind-down in the Government's first home buyer bonus scheme. Interestingly, the same survey recorded a pull-back in responses to the question: "Is now a good time to buy a dwelling?", albeit to still optimistic territory. This suggests affordability is becoming more of a concern for potential buyers. Clearly though, this has done little to dampen price expectations.
Those who are expecting price falls because of the end of the FHBG, or rising IRs, or withdrawal of govt stimulus, or high unemployment, or low affordability, or something else, found themselves in an even smaller minority in October.
 
Yes I am referring to empire builders. Don't really consider sub $20m equity/net assets to be wealthy, and I don't think it's that easy to build equity beyond $20m without working hard for quite a while at some stage. Just mindful we're not falling into the trap of thinking wealth equates to having 7 IPs worth $800k at 60% gearing.

bobmenzies, as said, for the record I'm not a bear so don't feel the need to create any charts, when JP Morgan has already done so. Perhaps you are Goldman Sachs, hence the authority, though I'm pretty sure he passed away many decades ago.

7 IP's worth $800k at 60% LVR sounds great to me

was that $800k each? :D

$5600000 Value
$3360000 Loan
60% LVR
$2240000 Equity
 
We have had our house in Gladstone Valued for the bank... It has gone from a valuation mid Dec last year of $365,000 (Capital gains valuation)
To a bank valuation of $325,000 (for sale of X-Colled property)

I know the criteria for the valuation are different, but to ME it's still a $40,000 Drop.
 
7 IP's worth $800k at 60% LVR sounds great to me

was that $800k each? :D

$5600000 Value
$3360000 Loan
60% LVR
$2240000 Equity


Well... it's all about individual perceptions. As I said, those JP Morgan property people made $2m a year in salary (and there's lots of these people around). They're still working because they don't feel they're rich enough. Yet there're others who think they can ride the world with $2m equity and retire right away.
 
perceptions

Yes it's all about perceptions. When Obama said 1 mill tops for Wall Street CEO's there was an article in the NY Times describing how 'impossible' that would be for the average executive living in Manhattan - just in terms of property costs and lifestyle considerations (the right address, the right suit, the right school, the right nanny etc).

The constant mantra I've heard for years is the unsustainabillity of our western style consumption (the swelling debt) and the 'spiritual reward' of living smaller and simpler.

I'm fast approaching retirement and part of that is allowing for the lifestyle that I enjoy (e.g I doubt I'll be continuing expenses that are generally related to remaining in employment and its status - as per the NYTimes article).

Of course I'm hoping for house prices to increase somewhat to enable retirement sooner but I'm not interested in yachts, villas in the carribean, and those other things. As long as I'm not sweating on the ATM once a fortnight, and can indulge the occasional travel plan I'll be happy. After that the stress versus return equation has to be pretty good to indulge.
 
Last I heard Mr Ilhan took 50% of his wealth with him.... :rolleyes:

Wealth is not measured in $$ nor IPs or the beamer in the driveway.
Like happiness, it's a state of mind that nobody can give or take away.
You have it or you don't.
Most people try to act it, but are only fooling themselves.
 
Most people try to act it, but are only fooling themselves.

What a silly post from you .....AGAIN :rolleyes:

Happiness or wealth is sooo much of a personal thing that if they believe they are happy or wealthy, they dont need external reinforcement or for others to judge them.
 
What a silly post from you .....AGAIN :rolleyes:

Happiness or wealth is sooo much of a personal thing that if they believe they are happy or wealthy, they dont need external reinforcement or for others to judge them.

You probably should read PB's post again.
 
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