More and more people are investing in Property.

[Gordon Gekko]

Hi All,

Investing in property has become "trendy" in the last 5 years. Fair comment??

More and more people are investing in property, so does that mean that there is less of the "IP cake" to go around. Less opportunities to make money in the future??? Or does the amount of punters in the IP market go up and down with the property cycles??

I know shares are coming back into favour, so some people pull their $$$ out of IP's and into the stock market. But i just feel that, per capita more people now are IP punters than say ten years ago and i think it can only grow.

So if that is true, what does it all mean for my IP's 10 years down the track when i still have another 10 years to retirment (55yo)

Any comments most welcome, please

GG

 

[jahn]

Hi Gordon
Similar scene to yours (57, but looking to retire before 10 years, says he wishfully thinking )
My opinion is there is plenty to go around.
In answer to your questions.
Agree, IP's are more trendy now than 10 years ago.
Number of punters seem to cycle, just seems a bigger cycle this time around
Watch em move when the shares start to move
What it all means to me is that if we do our sums right, remove emotion from the deals, and do our due diligence, we will still have good investments in 10 years time, while some have jumped ship, or moved on for a quicker 'buck'.
(If I can learn some of the share trade info, I might just join in at some stage, but stick with IP's as main vehicle for future )

jahn

 

[Kevin]

Gordon,
I tend to think that a lot of people have jumped on the band wagon during the booming time.
When interest rates go up a lot of people will dump there IP's
and as you said some will go back into shares.

Also I think it is about 30 % of people are renting and this is a growing trend.



Gordon dont wait for 65 if you dont have to

 

[WillG]

Hi Gordon,

I agree with what you are saying. 'To generalise', a lot of the people are first time investors and are after an instant capital gain. When their IP's fail to grow(@ 10+% per year), share market becomes more popular, have tennent problems or 'need' a new 4WD they will cash in their IP's.

I read somewhere on the forum that property is the 'lazy mans' investment. Just leave it and let it grow. Impatient or impulsive people need not apply.

 

[Aceyducey]

Gordon,

I ahree with WillG - there may be plenty of new property investors, but how many are willing to stick the distance and how many will jump out of property when it looks 'sour' and straight into the NEXT BIG THING (which I am reliably informed is Platypus farming).

Also, until the number of property investing households reaches 50% of total households there is still plenty of space in the market......I believe that the number of households owning IPs is still well under 10%.

Cheers,

Aceyducey

 

[lissie]

I think WillG is right. We just bought a property for $7k under asking - the vendor bought it in 97 for a rental . Their tenants did a runner so they wanted out.

They are happy because they made $40k on CG. We're happy because there has subsequently been interest at asking price and the tenant is moving in on Tues - we dont setlle until Thurs !

 

[see_change]

ACEY

Platapus Farming ??!!

Sounds like a dead set winner to me.

Can you please foward details to me ASAP.


See Change

 

[Kevin]

See_Change

Not enough meat on them` Also hard to catch

 

[Matt Newbie]

My shares and managed funds have started rising steadily for the 1st time since Sept 11 '01

Just watch, the next share market boom is starting and in a year or 2 shares will be back in fashion and interest in property will drop off as interest rates rise

I've got my $$$ in shares atm .. waiting for property to drop ( which it must .. $300k homes in Taree on the NSW mid north coast cant last )

 

[Rixter]

Anyone want lease a fantastic income spinner - Blue Bottle Jelly fish Farm ?

 

[Peter_Tersteeg]

Originally posted by Kevin
Not enough meat on them` Also hard to catch

Kev,

Think 'Overseas Market'. Advertise it as a duck-billed, clawed feet, egg laying (with pouch) mamal that actaully exists, and people will be thinking, "It's a monster like the Yeti, but it's actually real!" Hard to catch just increases scarcity and thus the price!

Two weeks ago in the US I managed to convince an adult that my Dad has a kangaroo farm and even has a kangaroo driven buggy (he's a bit of a traditionalist)

She caught on when I then told her that Santa borrows it to deliver presents in Australia.

 

[Aceyducey]

Originally posted by PT_Bear
She caught on when I then told her that Santa borrows it to deliver presents in Australia.

PT,

I'm not surprised she caught on. Everyone knows that Santa is responsible for all those feral deer in the Royal National Park...bloody Europeans - always bringing their pests with them!

RE: Platypuses - scarcity & difficulty in catching is a big plus - the lack of meat isn't important, it's the fur & eggs that are booming....picture i: get out of bed in the morning & put on your platypus fur dressing gown, then head into the kitchen for a nice plate of fried platypus eggs.

PLUS their beak is a potential cancer cure - ever seen a platypus with cancer?

Cheers,

Aceyducey

 

[Joff]

Hi everybody,
Interesting post ( property investing, not platypuses, although I am sure they are very nice animals. )

Of course everybody is a bit nervy about the next couple of years.
It's sometimes like the media are continually gloating about how we have this "GREAT REAL ESTATE BUBBLE " and all these greedy investors are going to come a cropper.

But any astute investor could not have missed the wealth of information and data so easily available in the last few years.
There have been no great suprises in demographics, changing markets population trends. The medium density and inner city apartment market had all been on the drawing board for years.The subsequent rush and oversupply of these markets has been bleedingly obvious for 2 years.

My ip's are spread across a range of markets.IE. retirement unit,
2 middle range homes in nice burbs, 2 more 3 bedroomers in rural towns and an apartment on the beach in the bayside area. So I am confident that my risk is spread enough.

So, in fact I see the future as exciting as an investor, as new markets and trends open up and all the rush in blindly crowd sell up ( to me I hope ) and chase a quick buck somewhere else.

That's my bit. I had better get back to work, people are looking at me funny!
chris

 

[simonjulie]

Hi All
Great topic
I believe that the current property boom is partly the result of the technology boom over the last decade or so.
Never before in history has information and technology been so readily available to so many. The world has become a much smaller place. The result being that estute investors are now more than ever realising the true value of good land no matter where it is in the world. There is only one planet earth (that we know of ).
So because of the world population growth coupled with the technology revolution the value of good land must continue to comand a premium.
One of the problems for investors of the future will be understanding and keeping up with migration trends both internal and external.
Here in Oz we only have a small population however internal migration trends can have a major effect on real estate values.(example. Lifestyle migration to Queensland from southern states in the 70's&80's)
Kind regards
Simon

 

[Mitzi]

Hi Gordon

As I see it, there will always be enough IP "cake" for those who follow this line of investment. Information from the RE office where I had been a PM for years was that as soon as properties started to rise in value, a large percentage of owners sold their rentals immediately. The rent roll was decimated. I also saw George Negus (Channel 2) interview a couple of futurists/strategists, the first of whom predicted that younger people will lease rather than buy a home and use their money for business. This is backed up to some extent by the tendancy for couples to marry later - travelling overseas and generally having a good time. As most of the "mature" posters on this forum would agree, we didn't do all the "yuppy" stuff but rather set about buying our own home in our twenties. Two of my 30+ children still rent but have great holidays (no kids yet) and (to my utter despair) seem to be oblivious to the need to start planning for later security- aagghhhh. Where have we failed? The other thing is many people are scared of the concept and simply don't have landlord mentality so they sell as soon as they have one bad experience.

Rather than the "lazy man's " investment, I prefer to think of property as the "patient man's" investment. One of those futurists (on George Negus) actually made the statement that he believes investing in shares pays the best but Jan has researched this thoroughly and disproves that theory - I'll back her every time. Have a bit of fun with shares but be prepared to lose. At least with buying a house, you are getting something tangible and generally speaking any property will appreciate in value - not so with shares.

Mitzi

 

[jahn]

WillG
Thanks for that. You just xplained why I am interested in IP's;
"I read somewhere on the forum that property is the 'lazy mans' investment."
Mitzi
Must agree with most of your post, but 2 of our 3 'kids' have their own PPOR, and 1 has gone in with us on our latest reno.
We are in the group who will sell 1 IP for CG, but it is a unit in outer Sydney, and I would rather put the money to PPOR and use equity to do another reno. This would make us 1 of the statistics showing IP's selling/bailing out, but not quite the scene.
BTW - No fail, just different learn
jahn

 

[Fredn]

Originally posted by Mitzi

...... Two of my 30+ children still rent .......

Oh my goodness.... How do you ever find time to invest in property?

Freddo

 

[geoffw]

Originally posted by Fredn

Originally posted by Mitzi

...... Two of my 30+ children still rent .......

Oh my goodness.... How do you ever find time to invest in property?

Freddo

Hehe...

Mitzi must be the original old woman who lived in a shoe

Reminds me of the Groucho Marx line, when interviewing a contestant on "You Bet Your Life"

Groucho: You have 12 children- that's a lot

Contestant: But I love my husband

Groucho: I love my cigar too, but I take it out once in a while.

 

[teejay]

CG,

Yes there has been a rise in IP purchases in the last few years in Australia and has been contributed by many factors; mainly the media..now one wants to miss out on a good thing.

However, I feel that there is more than enough of the pie to go around, mainly due two two factors:

GEN X & Y - The will be a generation of renters and you know what...they don't care. For a number of reasons home ownership is not one of their highest priorities particularly for gen Y. The key is picking locations and product that are most appealing to their consumption trends. The recent prices rises have indefinatley polarised the market forever...home ownership even for those wanting is out of reach.

MIGRATION - Australia will head into a massive deficit of knowledge workers in the coming decades. As our education costs spiral out of control and many countries like India and Pakistan and throughout Asia have a massive surplus of workers they will fill our university halls...they will need housing. And as global talent swapping becomes set in place high priced premium accomodation will be in demand. Simply due to the fact that any intertional blue chips here and abroad will need good knowledge workers to move forward and they will pay through the nose to keep them happy.


Do your due dilligence and you cant go wrong.

Teejay