"Tell me about the war, Daddy"

[propi03]

Hello everyone,

We just today read an article in the business section of our Christchurch Press (NZ) which we thought people would find interesting - ("Tell me about the war, Daddy" by investment columnist, Gareth Morgan)

It follows on from the deflation article posted on this forum 28/6 (Greenspan's Greatest Fear - Peter Hartcher) , which we thought very thought provoking. Presently reading a book mentioned in that article, The Great Wave by David Hackett Fisher which is a historical overview of economic trends pre/post 20th century

Morgan's column link is found at:
http://articles.garethmorgan.com/column.php?id=500&ref=gmi

Any reactions? After reading this today, we already have had comments by PI friends, wondering where to from here? Property market here is still very hot -

 

[Gladstone]

Hi

I remember as a beginning TAFE teacher in 1991 the subject of the great property crash was then discussed. One of the other teachers even subscribed to a newsletter expounding these views. Many Bundy's ago but I think the newsletter came out of the Gold Coast.

It hasn't happened yet. A forumite recently posted they had bought a property in Mansfield in Brisbane for $125000 in 1993 and didn't move in price for several years and their accountant told them to sell. Guess what? property more than doubles. So as Jan says buy and hold median priced property.


I think (my view I am not an economist) property will slow down and there will be some great bargains in the second half of this decade without a crash similar to the Mansfield example.
Can any long term property investor remember what growth/yield was like in the late 1980's when interest rates were 14% and higher?

Regards

 

[Les]

G'day G42,

I happened to have ONE IP back then (before going into an IP hiatus for about 10 years ). The words I recall at the time, in newspapers, etc were "you should get 10% from an IP".

In our case, we had bought a "do-upper", spent $15k on it, and were pulling 12.4%. We chose to sell it 18 months later as Interest Rates hit 18% - we COULD have kept it, but chose not to at that time, and made $15k nett by selling.

If only I'd known THEN what I know now......

Regards,

 

[Frankd]

"tell me about the war daddy"

I hope I will be able to say :-

"well son, it was like this.....
By the end of 2003 at the height of the great property war the inexperienced rookies had come from everywhere. They would push past us hardened veterans to join the fighting and it wasnt long before there were many casualties. Our job, as veterans was to wait until the battle was over and then emerge from our hiding places to slay the wounded. In other words with a bit of experience and patience we "cleaned up".

 

[XBenX]

hehe nice one FrankD