Michael Yardney's 2009 Predictions

[kum yin lau]

Hi, I don't know a lot about Melbourne & am not unhappy that I didn't proceed with a purchase [pulled out on the standard subject to finance]

I'm pretty sure that particular property in Cranbourne in 2010 wouldn't have lost money, might have a small gain [do up, sub-divide type]

But my sister's apartment in Little Collins St is going great guns. She bought it I think in 07 [not sure] at 392K. The rent was 450 pw.

It's now 700 rent & one apt below her [same size] sold for high 600K

If it's not a boom, it's quite close.

A friend put in an offer of $2M [cheeky] on a house, was accepted, scrabbled around for funding & bought it in the height of the GFC 08, 09?

Wonder how that purchase turned out?

KY

 

[BayView]

If you bought expensive negatively geared inner city properties in 2009 with the plan to ride the boom, you'd be in a very painful position now.

If you do this anytime; then you cop your right whack.

It's normally the investment of choice for higher income earners, done without too much DD or research, and done simply because they have the expendables, have the tax deductions in the forefront of the mind, and have a myopic view of where to invest..

 

[sanj]

If you do this anytime; then you cop your right whack.

It's normally the investment of choice for higher income earners, done without too much DD or research, and done simply because they have the expendables, have the tax deductions in the forefront of the mind, and have a myopic view of where to invest..

Unless you bought them in WA where many have had 50% rent increases

I nearly bought a brand new 2x2 inperth from a developer that had a few buyers who did not settle. Was looking at 420k for something now worth 550k and getting 850-900/week furnished

 

[BayView]

Unless you bought them in WA where many have had 50% rent increases

I nearly bought a brand new 2x2 inperth from a developer that had a few buyers who did not settle. Was looking at 420k for something now worth 550k and getting 850-900/week furnished

Of course, there will be spectacular wins.

But what we often hear is the story of the person who got creamed in PI, and when you delve a bit deeper into their details, it was often a massively neg geared selection in the pursuit of quick and spectacular gain.

Nothing wrong with that, but these are the sorts of purchases we hear about on the news when the investment journo's trot out the doom and gloom stories.

The plodder 3x2 in the burbs hardly ever has this sort of scenario occurring, but doesn't get the 100% CG in 2 years type story either.

 

[VYBerlinaV8]

This thread has nudged me into something I normally don't do: make predictions.

I think we will have the mother of all property booms in Australia sometime between 2023 and 2030, due to Gen X reaching their peak spending age. There are now more Gen Xers than baby boomers and they are not as frugal.

 

[Fifth]

I think we will have the mother of all property booms in Australia sometime between 2023 and 2030, due to Gen X reaching their peak spending age. There are now more Gen Xers than baby boomers and they are not as frugal.

I'm a bit confused. How are there now more Gen Xers than Boomers? Production ended on Gen X decades ago and not enough Boomers have died to allow Gen X to overtake. Happy to be corrected on this.

Edit:Just reread. I think you meant by 2023-2030 there will be more Gen Xers?

 

[Peter_Tersteeg]

Interesting prediction. Gen X is currently in their late 30s to early 40s. This suggests they're around their peak earning capacity (from an income perspective), but at the same time they're also bogged down with first or second mortgages, kids, etc. They're also not worried enough about retirement to start dedicating serious money to it (some are worried, but not the way they'll be in another decade).

The Gen X investment panic in 10 years could also be offset as the baby boomers start to die off. Another decade and they'll be approaching the average life expectancy. Many kids (gen X) will stand to inherit the asset pool, or at least what's left of it. The inheritance will either be used as capital to leverage into more investments or will simply be held as funds for retirement.

There certainly is potential for a boom driven by gen X in about 10 years, but gen X attitudes towards investment and debt could be heavily influenced by market performance in the meantime. Either way I think investing consistantly in good quality stock over the next decade will serve people better than waiting another 10 years.

 

[VYBerlinaV8]

I'm a bit confused. How are there now more Gen Xers than Boomers? Production ended on Gen X decades ago and not enough Boomers have died to allow Gen X to overtake. Happy to be corrected on this.

Edit:Just reread. I think you meant by 2023-2030 there will be more Gen Xers?

http://www.abs.gov.au/websitedbs/d3...ca0b3137794a766bca256f6c0078cb0b!OpenDocument

 

[VYBerlinaV8]

Either way I think investing consistantly in good quality stock over the next decade will serve people better than waiting another 10 years.

I agree completely. I generally don't subscribe to the view of only investing during boom time, but look for for longer term results. I figure I'll have another decade or so to get my ducks in a row to take advantage of the next big boom.

 

[Fifth]

http://www.abs.gov.au/websitedbs/d3...ca0b3137794a766bca256f6c0078cb0b!OpenDocument

Ahh... I'm having a very stupid day. I looked at that graph for a good minute wondering where all the Boomers got to. Then I remembered a little thing called immigration (nullifying the post-BB declining birth rate).

The Gen X investment panic in 10 years could also be offset as the baby boomers start to die off. Another decade and they'll be approaching the average life expectancy. Many kids (gen X) will stand to inherit the asset pool, or at least what's left of it. The inheritance will either be used as capital to leverage into more investments or will simply be held as funds for retirement.

Good point. The transfer of wealth from Boomers to Xers will be interesting to watch unfold, with Boomers currently controlling something like 80% of it. How much of that wealth Xers inherit and how they chose to spend/invest/hold will dictate the direction of much of our economy.

 

[VYBerlinaV8]

Good point. The transfer of wealth from Boomers to Xers will be interesting to watch unfold, with Boomers currently controlling something like 80% of it. How much of that wealth Xers inherit and how they chose to spend/invest/hold will dictate the direction of much of our economy.

This is what will make things really interesting. Some boomers will transfer to Gen X who will maintain and grow the inheritence, but many will do exactly the opposite, and spend like crazy. I expect the spending to stimulate the economy somewhat, by enhancing what will already be a peak spending time for Gen X.

 

[natedog]

This is what will make things really interesting. Some boomers will transfer to Gen X who will maintain and grow the inheritence, but many will do exactly the opposite, and spend like crazy. I expect the spending to stimulate the economy somewhat, by enhancing what will already be a peak spending time for Gen X.

Most people only get access to an inheritance once thier parents leave this mortal coil.

With life expectancies into the 80's now....most would only receive inheritance when they are around 55- 60....closer to retirement age....so i would think more concerned with retirement planning than spending.

I dont think its going to be a case of inheritance rich Genx ers running round in thier 40's spending like crazy....unless the boomers enm masse start to leave this earth round the age of 65,

Nath

 

[Fifth]

Ahh... I'm having a very stupid day. I looked at that graph for a good minute wondering where all the Boomers got to. Then I remembered a little thing called immigration (nullifying the post-BB declining birth rate).

Oh, yeah, and BBs reproducing above replacement levels and the whole exponential thing. </stupid>

 

[Mindmaster]

PT_Bear what would you call good quality stock?

Interesting prediction. Gen X is currently in their late 30s to early 40s. This suggests they're around their peak earning capacity (from an income perspective), but at the same time they're also bogged down with first or second mortgages, kids, etc. They're also not worried enough about retirement to start dedicating serious money to it (some are worried, but not the way they'll be in another decade).

The Gen X investment panic in 10 years could also be offset as the baby boomers start to die off. Another decade and they'll be approaching the average life expectancy. Many kids (gen X) will stand to inherit the asset pool, or at least what's left of it. The inheritance will either be used as capital to leverage into more investments or will simply be held as funds for retirement.

There certainly is potential for a boom driven by gen X in about 10 years, but gen X attitudes towards investment and debt could be heavily influenced by market performance in the meantime. Either way I think investing consistantly in good quality stock over the next decade will serve people better than waiting another 10 years.

 

[cu@thetop]

PT_Bear what would you call good quality stock?

My thoughts exactly. Over to you PT