possibility of no growth for the next 10 years

[Sunfish]

If you know what you're doing there has been easy money on the share market lately, real easy. Ask Evan to remind you how he's done lately.

On second thoughts you didn't need to know a darn thing, just be in it.

This:

In the next 10 years...you will need to :

1. Invest in areas where there is infrastructure going in....no just invest in overpriced Bluechip areas in the major cities.

2. Smart renovations will add equity.

3. You need to think outside of the square.

4. Continually assess and re-invent your strategies....it maybe as a simple a just a small twist to make profitable deals.

5. Cash flow is king.....you need to plan to increase a property with a 5-6% yield to something that will return 8-10% in 2-3 years.

The last 6 months have been great for me as most of my portfolio is FHB territory.....I suspect this will change.
Today 09:25 AM

sounds like hard work to me though, AND you still have pesky tenants.

 

[evand]

Mate, the force has been with me. Probably before you bought your first IP. LOL

But the thread title was about a 10 year time frame going forward. You havn't addressed that at all. Just patting yourself on the back.

My area is inner west Sydney and central coast. Both still not good enough for me to invest in. OK for ppor tho.

I just go where the cash is and opportunities have been in the stock market lately. Otherwise - as i've said a thousand times - i'm on the sidelines.

Evand...all I can say is that one day the force will be with you.....one day.

Till then reside on the darkside.....

Evand....did you not know that we live in the luck country. If you know what your are doing you can make money in any market. You just have to be prepared to invest around the country.

As for your neck of the wood....the Central Coast....prices in the low to mid end are moving nicely. No softening....just look at the rental queues there.!

 

[sash]

Been....there too....been writing covered calls.

If you know what you're doing there has been easy money on the share market lately, real easy. Ask Evan to remind you how he's done lately.

On second thoughts you didn't need to know a darn thing, just be in it.

This:

sounds like hard work to me though, AND you still have pesky tenants.

 

[sash]

Hmmm......I would say you and I are not too far apart in age? I am 42?

As for the Stock Market...been there too....have been writing covered calls! Nice little earner this month....got aobut $2500 in premiums...I know chump change compared to people like Chillaa!

Mate, the force has been with me. Probably before you bought your first IP. LOL

But the thread title was about a 10 year time frame going forward. You havn't addressed that at all. Just patting yourself on the back.

My area is inner west Sydney and central coast. Both still not good enough for me to invest in. OK for ppor tho.

I just go where the cash is and opportunities have been in the stock market lately. Otherwise - as i've said a thousand times - i'm on the sidelines.

 

[WinstonWolfe]

I have access to a sales data portal and I am always doing comparisons against suburbs to see what growth they have had.


opinions and insights welcome.

Cheers
Rick

where's your data from? especially the median prices? the most accurate info is repeat sales. other figures will be skewed by newer estates in these older cheaper suburbs. i.e. Caboolture has a higher % of new estates compared to more established middle ring suburbs. Waytown in Caboolture cannot be compared to newer estates.

as for growth, I am firmly of the belief that the cost and availability of credit will dictate that, as it always has. As more high equity owners sell property to lower equity buyers, Australia will become increasingly dependent on foreign capital to finance resi mortgages, and more interest will flow overseas.

The trend of higher net foreign debt and higher current account deficits is going to restrict Australia's economy and options severely within 20 years.

Australia's economic outlook is tied at the hip to Chinese growth now and moreso into the future. Just watch what happens over the coming months as China reins in loose lending.

 

[Aaron Sice]

and when they do it will be seen as "responsible" and "fundamentally correct" and will bring confidence back to the market after a little panic.

 

[blaster]

I have access to a sales data portal and I am always doing comparisons against suburbs to see what growth they have had.

The question I always seem to ask myself is... why does every chart look like there is no possibility for capital gains over the next 10 years. It seems to have been swallowed up in the last 10 years.

While I am glad to be part of the last 10 years growth can we really see property continually growing at this type of rate?

See the graph attached to see what I am talking about.

opinions and insights welcome.

Cheers
Rick

Not a hope in hell in my opinion , certain area spikes yeah but once this one drops down again. We've used up 25 yrs growth in 6 or 7 , has to be a price and now Rudds really put the icing on that one.
I don't care I don't even bother looking for growth , not near term anyway, I look for addable, hidden freebies within the buy, 2 Xs and createable equity.
That way the buy is fool proof and very profitable - with leeway in whatever becomes of the market but if market does go well even better.

Works great , heaps to be made !

 

[blaster]

Ahhh..Michael...i actually thought you made a post without mentioning your development plans. Oh well....almost...LOL

And sash, mate, we're talking 10 years ahead, not now. Or did you miss the title of the thread?

Do you guys think this would be happening without the FHBG and 3% cash rates. Its an artificially created rally and every time i've seen one (government intervention i mean) the results aren't nice after it. Wake up guys and ease up on the hubris, its getting boring.

Exactly !

Besides , even on the chart and in Australian fundie's , no not undies , fundies , we should definitely be approaching a long downward and then leveling sweep for atleast 6 or 7 years followed by the upward sweep only matching back to where we are right now.
We'd be well into that sweep right now if not for stimulus stuff, it was beginning , stimulus could well cause an even longer and more severe burnout you would imagine .

Cheers
Ps , but it's not getting boring , not to me anyway . Tossing it around is one way of maybe getting to the bottom of it . God knows you can't listen to an economist or media.

 

[investor2009]

In my opinion.

Property prices will indeed double over the next 10 years.

Prices were too high in the 1930's at $3000, people were asking the same old question then also, and right through history. How could prices rise above this?!

There are many reasons 'why'.

I put my money where my mouth is so I guess that shows I believe.

 

[Aaron Sice]

me too i2009.

i'm sacrificing a lot in the assumption that prices will double or even triple again - especially coastal and transport hub areas.

 

[chilliaa]

no growth in 10 years .... ?

future or past?

past performance is no guarantee of future results.

I just call it sheep season. Anyone for a nice juicy lamb chop.

 

[JulieW]

Performance

Concerning the rises and falls over the last decade, if a suburb has had a capital growth rise of 5% over the last 5 years, whilst nearby suburb growth has been from 30-50 percent in same period, does this mean that the suburb is undervalued and will inevitably rise to match its neighbours growth?

 

[Ausprop]

this aligns with my thoughts on the looming 'mother of all housing booms' suggestion...

http://www.businessspectator.com.au...ment&src=blb&is=property&blog=concrete detail

 

[MichaelW]

Nice link Ausprop!

Although I've known this to be the case for some time now from a variety of empirical sources, it is nice to see Chris pull the facts together concisely.

My bets are placed and I'm ready for the future to unfold. With a massive under-supply problem we will get our returns from capital gains or rental increases. One way or another, the holders of the assets in short supply will benefit from their ownership. We'll either charge more to trade them to someone else or charge more to let them to someone else.

Buy while the buyings good people. The next 20 years or so will be one of those stories you tell your grandkids about.

Cheers,
Michael.

 

[Peter 14.7]

Buy while the buyings good people. The next 20 years or so will be one of those stories you tell your grandkids about.

Cheers,
Michael.

And that is really the secret of PI , there is no secret!

Well placed Property is the only item* that increases in value as time.

Cars go down and cost to keep on the road.
Furniture, excluding rare antiques, trun into firwood.
Electronics are almost free (aka phones)
Clothes, etc..

regards

Peter 14.7

*freakish rare art goes up but hey who wants to own that!

 

[WinstonWolfe]

I am firming up on what Rudd's least painful solution is for the affordability issue.

Cap annual rent rises.


It doesn't hit PIers smack bang in the face if they are patient enough to prioritize long term growth rather than +CF.

It will reduce some of the bidding up pressure from investors.

Stay tuned. I think it is a cert.

 

[natedog]

Wouldnt capping annual rent rises discourage new investors investment in rental accomodation?

Why would the government discourage investment in providing new rental dwellings...if there is in fact a shortage of dwelings in OZ?

Generally speaking.....Fewer landlords = fewer rental properties = more competition for what is available = higher rents to start with??

Just thoughts..
Nathan

 

[VYBerlinaV8]

Rent rises for existing tenants are already capped in ACT. I think you can go CPI +10% of CPI each year. Of course, you can always try to push the tenant out and get another.

Don't trust me on this, my info wasn't obtained first hand.

 

[blaster]

It's all the arguments on for , that confuse the whole OZ situation over this last year or two and within the near future even more because they do all actually make sense and do have merit right across the board .
But on one hand we have things like the US, UK, world economic situation , very highly priced property here and recent booms, stimulus effect but on the other everything people say here and in others is also true and does have allot backing it up.

I can't believe the media in general at the moment though , only six mths ago it's financial cyclones , the worst times in history heading straight for us , Rudds spending billions and what - it's all ok now , done dusted , fixed , we'll put up rates the lot.

Certainly some wacky times if nothing else don't you think ?

Cheers

 

[Ausprop]

just read Bernard Salt's forecasts for Broome... with growth of that magnitude I'd like to hold property there for 10 years!