Property Crash 2 Years after Stockmarket Crash???

[Goyco]

Yeah..... Maybe just with many, many years in between!!

With shares yielding around 10% franked and property in major cities around 4 - 5 % gross I think you're wrong.

Either shares are too cheap now, and they will "boom" first, or they arent so cheap and there is way more earnings pain... The later cant be good for property prices.

I think you'll find the yield for the All Ords is about 5.5% grossed up about 7%

just my 2 cents

cheers

PS "Always" is a very dangerous word in financial matters

 

[pjparker]

Paul Keating was on lateline the other week commenting on historical share and property relationships.

The previous property drops co-incided with oversupply, whereas this time there is a major shortage. But as others have mentioned, we are in unchartered territory.

My belief is good property will be fine, maybe flat for a while, but I don't see any large reductions. I would be nervous if I was holding mining town property at the moment, there we could easily see 30-50% reductions as the mines shelve projects and reduce staff as China slows, but ultimately its a case of ...wait and see.

Paul.

 

[urchin]

Not sure about the 2 year period.

Maybe take a look at the Investment Clock.

http://www.startrungrow.com/information/investment/6,2983,the-investment-clock.htm


EC

These kinds of things are descriptive, not prescriptive. There is nothing to say that a particular market must or will follow the trends on the "clock"--it simply describes how certain trends have functioned in the past.

As most people will, I think, acknowledge that the situation this time around is a bit unusual for a number of reasons (the near coillapse of the global credit market--to which the aussie credit market is extremely vulnerable--being one of them), i would recommend taking that clock and chucking it out the window.

do your own research, do your own math and see how things add up for yourself. this is no time to be relying on truisms. if doing that sort of research/maths is not your bag you probably picked the wrong thing to do with your money.

 

[Sailesh Channan]

PS "Always" is a very dangerous word in financial matters

I guess you are right as we do not know if history will keep repeating itself. However, the two key ingredients of a boom and bust is fear and greed. These human emotions has not changed over the decades. Therefore, I am inclined to think that we will see the economic clock will keep ticking away in the same way it has for decades.

We as investors have to step back and look at the bigger picture.