Property doubles every 7 to 10 years?

[see_change]

Previous peak in Sydney was around 1989 , last one 2003 , which unless I have forgotten my year four maths makes about 14 years.

Something all the media commentators seem to ignore.

See Change

 

[grubar30]

Stuff margin lending. Better leverage is via CFDs if you are into shares with no security/LVR etc Leverage up to 97% of the value is possible. CFDs are the future. But few are chosen to succeed..

So apparently well-versed in shares, but you vehemently dismiss and question the positives of property, esp. with regards to historically proven trends (ie, 7-10yr rule)....


hmmm, something's not adding up..........I smell a troll

http://en.wikipedia.org/wiki/Internet_trolls


George “don’t feed the trolls” Grubar

 

[grossreal]

hi all
you seem to be putting property cfd and shares in the same pot and they are for me very different and shoudn't be viewed in the same light.
cfd's have high risk yes put because of the leveraging can give huge gains.
shares are cheaper to get into then property but not a srisky as cfd's but the returns ar less so you can lose less.
and property is godd but it can fall or not go up.
but waht you seem to miss here is that the aim of the game is not to look at the negatives look at your risk provile and if you want a nice easy and secure investment that will increase over time go property.
if your a bit more risk taker go shares and then go cfd if you go high returns and then go hedge funds for your 41% possible complete loss.
property and shares are not the same and never will be (until a share price gets to 300k).
property in sydney has been historically doubling and will in the future for me.
the others are your own risk management.
the main aim of the game is to keep focused on the aims you want to achieve and if you get good a cfd trading you make alot of money but you can lose alot to.

 

[round12tko]

Ideal: to have property double every 7 years and to trade in CFDs. One creates wealth, the other creates income.

 

[alexlee]

Ideal: to have property double every 7 years and to trade in CFDs. One creates wealth, the other creates income.

Property throws off income. Just depends on how high your gearing is. In later stages of the game just repay loans with property profits and convert your properties into cash machines.

e.g. you buy a unit for $50k back in 1985. By now it's worth about $200k. You still have the same loan on it (say 100%) of $50k, paying $3,500 a year. Your rent is $200pw, less agents fees, insurance, council, etc is maybe $7 or $8k. Repeat with 20 properties. Even classic buy and hold throws off cash eventually. Use equity from high yielding assets like LPTs, shares with high franked dividends, corporate bonds that yield above the mortgage rate, etc.

So, round12tko, if you question the basic idea that property trends up over the long term, why would you invest in property at all?
Alex

 

[round12tko]

So, round12tko, if you question the basic idea that property trends up over the long term, why would you invest in property at all?
Alex

Because I believe at some point compounding property prices breaks down. Look at eh HK and Japanese property market in the last 20years

 

[alexlee]

Because I believe at some point compounding property prices breaks down. Look at eh HK and Japanese property market in the last 20years

You'd be surprised at Hong Kong prices. It's bounced back a heck of a lot since 1997. If you'd bought in Hong Kong in 1986, say, you'd be way ahead.

As for Japan, it went up to stratospheric levels during the boom. The bigger the boom, the bigger the bust, especially with the Japanese economy and demographics. If you'd bought Japanese property in the 70's, you'd STILL be ahead, and had you sold at the top of the bubble in the 80's you'd be laughing your head off. In the last couple of years, Tokyo residential property has been yielding something like 8 or 9%. With mortgage rates of around 2%, who needs capital growth? Capital gains is not the only way to make money from property.

Australia, even Sydney, did not go through the sort of psycho booms Hong Kong and Japan had. Therefore, it should have a slightly more normal cycle.

But of course, if you believe that property isn't going to go up anymore, you're free to do that. If you want to trade CFDs, that's cool too. Personally, I'm still going to buy property for the long term.
Alex

 

[McBrain]

CFDs are high risk, property is low risk.

You get what you pay for: Personally I don't gear into shares, even though I've traded for 7 years and am confident I can make good returns, it would be too risky to gear (for me).

I expect property to return much less, because it is a lower risk, because of this I feel confident to gear into it.

I think it's pointless comparing CFDs and property here. People who know about share trading (SeeChange - you frequent other forums..) know what I mean.

I think the issue is: What return can you expect from property over the long term?

 

[see_change]

CFDs are high risk, property is low risk.

I think it's pointless comparing CFDs and property here. People who know about share trading (SeeChange - you frequent other forums..) know what I mean.

I think the issue is: What return can you expect from property over the long term?

Must admit that I havn't looked at any derivatives as of yet. Not interested in short term trading.

Troll wasn't the term I used to describe round12tko in a previous post , but that's probably why that post was deleted...

Yet to hear anything from him / her / it that is worthwhile making a serious reply to .

LB ? is that you or has TMA had another bet with his friends at PI to see how long it takes to get banned from the forum. I think we have yet to see R12TKO's real colours.

See Change ( Ruby .... please .... I havn't used the w word in this post )

 

[speedbump]

Speedbump

I guess what can be said is that anyone can find a reason not to do something. I have given up talking about property investing at work or about what we are buying. All I ever get is "you'll have to pay tax" or "you've only made $20,00" or the classic "you were lucky". My sister in law has consistently made higher wages than both my wife and I and continually tells us how important she is to the company(70 hrs per week) and what her degree ahs done for her. The point is by investing in property my wife will be retired by the time she is 40 and my sister in law will still be important to her company when she is 65 !

 

[alexlee]

Ignoring round12tko's motives for a moment (I don't know what his game is), remember that property only doubles every 7-10 years on average over the long term.

Given that we've just come off a big boom, it's likely if you buy a property in, say, Sydney now, it might not double in 7-10 years.

The point being, you should be more careful about buying property now, especially if you're new to this. Don't necessarily put off buying (because you never know) but buy small, and make sure you can hold the property.
Alex

 

[RichardC]

I have just checked the performance of a big miner, a big bank and a big retailer (all houshold names and you probably guessed right but I did not search for suitable examples) and they have all shown 15%+ investor returns over the last ten years. ie doubling in <5 yrs (div's included).

With such investments there are no ongoing costs, not even a stamp, and they are marginable @ 75%. Not too shabby.

While property is obviously a good growth investment, it has never impressed me as a retirement investment. Why not have both?

 

[kissfan]

Why not have both?

I agree with Thommo on this point.

As most here know, property and shares (direct or managed funds) go in different cycles so to contain both in your portfolio makes good sense.

Think it was mentioned earlier how difficult it is to pick the right time to sell one asset class and buy into the other, so to hold both long term is a good mix IMHO.

Admittedly I have only recently started to pull some equity out of my I/P's to put into managed funds but still say that having both asset classes working for you long term should provide a very good overall result.

Regards
Marty

 

[round12tko]

I agree with you guys. Diversification and having multiple income streams is key. Good luck and the Socceroos to win the world cup.

 

[Monopoly]

I havn't used the w word in this post

W word??

winner?
wuss?
whoopsie?
wally?

What w word was weft-out seech???

 

[geoffw]

W word??

winner?
wuss?
whoopsie?
wally?

What w word was weft-out seech???

I'll leave it to the imagination what thw "W" in "GeoffW" stands for

 

[Big Will]

Sorry to necro such an old thread but thought it would be interesting to see what we where thinking/talking about 6 years ago and what has happened since...

First, I don't agree that property will double in the next 7-10 years. I think there'll be a correction, especially in Sydney, when rents will rise and property prices will fall until the conditions are there for another boom. If there is a crash, a lot of people will get hurt, go bankrupt, and banks will write off a lot of bad loans. Then the whole process starts again. It happens during most recessions, but there's always another boom coming.

That 7-10% growth rate is long term, assuming you ride through at least one full cycle.

Alex

As I don't know Sydney that well but I'm sure it would be similar to Melbourne market in a way (after all similar city under same federal gov and similar federal issues).

Rosanna is a suburb in Melbourne and it has nearly doubled in 9 years, in fact if you bought and sold at the perfect time according to the following link:

http://www.rs.realestate.com.au/cgi-bin/rsearch?a=sp&s=vic&u=rosanna

Bought 2004 a median house for 380k, and sold 2010 for median price of $707k (6-7 years) or sold 2012 for $686k (8-9 years).

Since then the market has been flat with signs of improvement this year already.

This has all happened with the GFC, floods, bush fires, global warming, end of the world (too many i have lost count), divorces, death, birth of new children, imigration, higher/lower australian dollar, USA fisical cliff, euro crisis... Yet after all of this property has bascially still doubled every 7-10 years!

Who knows what the future may hold!

 

[Noodle]

Yet after all of this property has bascially still doubled every 7-10 years!

Who knows what the future may hold!

Hmmm I think you will this isn't correct. There will clearly be instances where property has and will double in this period or even shorter, but you would be naive to believe this trend would continue for all property within australia on a general level.

 

[mrmonopoly]

Capital growth will always play a major role, however when looking at total returns, I believe that yield and cash flow will be given a lot more attention than in days gone by.

 

[wategos]

I just bought a property in an area at 2004 prices (NSW coast), so definitely no doubling every 7-10 years there.