You're welcome Dazz
Property has gone nowhere. Risks to property prices remain. The average property investor is still negative geared. So no, not much has changed.
I take this as a yes
Property risk highest in a long time
- Thread starter hobo-jo
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I take this as a yes
I will buy again (in Adelaide) when I think the fundamentals are lining up for solid growth or when yields make sense to do so. I sold a property late 2009 and I can still buy the equivalent for around 10% less than my sale price. Rents going nowhere. No expertise in renovations and no interest in doing so. No expertise in small development, something I will aspire to down the track but suspect would be especially challenging in the current environment. Long term B&H has worked in the past, but IMO won't be as easy over the next 10 years as it has been over the last 10. Why would I own property?I take this as a yes
I drew out equity to purchase metals well before the sale of the house (late 2008 - early 2009, for the most part). But even so, January 2010 to now:It's even worse than that. He sold his home a few years ago and put all the proceeds into gold and silver.
AUD Gold: $1220 to $1410 = +15%
Adelaide Home (RP Data measure): -4.4% from peak which was same quarter
+ saved a boat load renting over the last few years & in my particular case the equivalent property is 10%+ lower, but provided the Adelaide wide number to keep you happy.
First thing that popped into my head is how much rent have you paid since you sold, and would that have offset the fall in the house price. I know you pay rent and don't pay a mortgage, but I'm curious.
I would prefer to pay a mortgage than pay rent. I also know that is not necessarily sensible, but I cannot stop how my mind works
.I also know about people being able to rent a much more salubrious house than they could buy with the same amount paid into a mortgage, but I just like the idea of slowly "owning" something.
If we can take any lifestyle considerations out of the mix then the idea of selling one Australian home to buy back in later and benefit from the trade financially seems like a clumsy way to express the view that residential is overpriced, for many reasons, but could start with the transaction costs which are large.First thing that popped into my head is how much rent have you paid since you sold, and would that have offset the fall in the house price. I know you pay rent and don't pay a mortgage, but I'm curious.
I would prefer to pay a mortgage than pay rent. I also know that is not necessarily sensible, but I cannot stop how my mind works
I also know about people being able to rent a much more salubrious house than they could buy with the same amount paid into a mortgage, but I just like the idea of slowly "owning" something.
I couldn't manage to do it personally even though I sold one unit on the Gold Coast (no less) and in 2007, which shows just how tough it can be if you buy a reasonable property in the first place. I guess at some point in the next 10 years I could be made correct on that trade but I'm not getting any younger waiting.
Rent I am paying is less than interest on the mortgage (which is also dead money), so money I save renting is to my benefit, not detriment. There's more to the story than selling my house to buy Gold. Selling your "home" to time markets is not something I would recommend. While the house I sold was PPOR, it wasn't purchased with the intention it remain as such for the long term.First thing that popped into my head is how much rent have you paid since you sold, and would that have offset the fall in the house price. I know you pay rent and don't pay a mortgage, but I'm curious.
I would prefer to pay a mortgage than pay rent. I also know that is not necessarily sensible, but I cannot stop how my mind works
I also know about people being able to rent a much more salubrious house than they could buy with the same amount paid into a mortgage, but I just like the idea of slowly "owning" something.
I doubt you even saved enough to cover the stamp duty to buy back in.
And gold is going nowhere but further down over the long term.
and debts continue to deflate
Oh you're talking about Adelaide, no wonder you're so bleak.
Should've bought in Melb. Would've hit the 2009-2010 boom and 2013 boom.
You're welcome Dazz
Property has gone nowhere. Risks to property prices remain. The average property investor is still negative geared. So no, not much has changed.
hobo,
no offence, but you can't extrapolate those comments nationwide.
i appreciate the fact you're posting from SA where it may indeed be correct - but here in Perth a majority of rents have gone up 50%, some as much as 100%.
if you'd have bought something in 2008/9/10/11 when the world was ending you would be CF+ at the current rental levels.
it's not all about growth - but again, Perth, Sydney, Darwin and to some extent Brisbane have all had between mild to stellar growth in the last few years - all things being equal.
when you talk "average" property investor - do you mean those that are on solid DHW 12 year contracts with ratchet clauses and a lot of income to pay down the remainder? or those that bought apts under NRAS with 10 years' worth of $10,350pa subsidies? or the 5% of the population that bought 1 residential property other than their PPOR that has approx 2% shortfall between rent and payments? or are we talking comm property that has enough deductions against it to be able to claim a neutral tax return? or are we discussing those investing with FIRB approval and buying properties with cash and claiming the depreciation against the rent?
i don't mean to be picky, but your statement is super general on a national level, let alone a specific city level - and we all know each city performs differently under different conditions.
over 33% of dwellings in australia are owned outright - no mortgage.
just over 35% of dwellings have a mortgage.
and about 30% of dwellings are rented - however this stat incorporates those that have bought an IP, renting out an ex-OO home while not in residence, foreign investment etc etc.
http://www.abs.gov.au/ausstats/[email protected]?OpenDocument
so how do we divide up that remaining 30% into what is actually neg geared? and if they are neg geared, a fall in rates signals less neg gearing. a fall in rates also reduces impact on the high AUD which means more overseas investment is likely ($1b USD a month leaving HK at Mar levels).
i can't see how your argument still holds weight after 6 years, hobo. i like your style and your suspicious approach, but the writing is on the wall - if you bought when everyone said not to, you would have no problem continuing to hodl that asset today or in the immediate - medium future.
That's a bit low,everybody makes mistakes and who's to say he has made a mistake,some of your quotes did not go the way you thought..
This is for 2010/2011 FY:
http://www.macrobusiness.com.au/2013/04/negative-gearing-losses-jump/
Of course falling interest rates will probably lower number of negatively geared for current FY. Rent increases may have some effect too, but you have to remember that investor turnover of property on average is quite high, many sell within a couple of years, so the new rush of investors we are seeing at the moment will be achieving current yields which are still rather poor IMO:
http://blog.residex.com.au/2013/04/23/march-2013-property-market-update/
I've made it clear in many posts (including posts on Perth) that I don't think every city is the same. But Perth is not immune to the risks outlined in the OP. Reduced investment in mining infrastructure will hit your states economy too...
http://www.macrobusiness.com.au/2013/05/dont-spook-the-horses/
then i gather, from this material, that you agree with my sentiments?
Australia's population is set to double by 2050, after doubling from 1990 levels recently.
i see nothing but a squeeze for property in the medium - long term.
I agree about Perth, Sydney and Darwin but haven't much growth at all in Brisbane over the last few years.
Rents have done ok or better though in a lot of areas.
so you would consider that "mild" by the vague definition?
My grandfather used to say "if you look after the pennies, the pounds will look after themself".
I say "get the pounds sorted out and the pennies no longer matter".
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