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From: Fiona H
Hi all, herewith my first question (dont know where it disappeared to...)
If we assume rental growth at CPI (say 3%), as we do in PIA, and then we also assume capital growth at, say, 10% then it would seem that over the long term, rental return (ie, return on purchase price/value) diminishes.
Or, does rental growth actually equal capital growth in the long run? How long could this go on as the cost of accommodation (rental or buying) becomes a bigger and bigger component of our personal income? (who else remembers the days when even the brickies labourer had a holiday cottage, fully paid off?).
Has anyone had a property for say, 10-20years, who can comment on this?
Has anyone else puzzled on this and come up with some profound answers?
Curious - as it affects my forecasting/analysis of properties on a good day and completely perplexes me on a not so good one.
Fiona
Hi all, herewith my first question (dont know where it disappeared to...)
If we assume rental growth at CPI (say 3%), as we do in PIA, and then we also assume capital growth at, say, 10% then it would seem that over the long term, rental return (ie, return on purchase price/value) diminishes.
Or, does rental growth actually equal capital growth in the long run? How long could this go on as the cost of accommodation (rental or buying) becomes a bigger and bigger component of our personal income? (who else remembers the days when even the brickies labourer had a holiday cottage, fully paid off?).
Has anyone had a property for say, 10-20years, who can comment on this?
Has anyone else puzzled on this and come up with some profound answers?
Curious - as it affects my forecasting/analysis of properties on a good day and completely perplexes me on a not so good one.
Fiona
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