I'm still not seeing a valid point here, care to expand? Simply highlighting the word 'Gross' only serves to ignore other aspects such as depreciation and negative gearing etc which to a certain extent negate any additional costs necessary to determine the 'Net'.
The point I alluded to was that in the hypothetical situation of a 50% crash the rental returns on new purchases would be providing significant buffer by way of increased yields, either gross, net or any other way you care to slice it. Particularly in anticipation of a likely return to CG.
You still havn't explained where your 3% yield from the previous post came from? As it would require pretty exceptional circumstances for a 6% gross yielding property to only net yield 3%, and seeing as the point was referring to a post crash scenario in which the gross yield was now 12% this makes it even more unlikely.
Always keen to hear constructive debate particularly on this theory, but from the tone of this reply as well as others in this thread it would appear you seem to be trying to take a position of authority on such matters without backing up your argument. Really keen to hear why you don't feel the rental returns in such a scenario are a valid consideration?
so are you arguing that a 50% property crash is a good thing for current owners cos their yield is now higher? 3% was a random number plucked out as a net yield but was under the current rate achieved at the bank.
If you have a net return can you negatively gear? eliminate capital gain expectation and is it a good investment? Im in the camp of the market being overdone but not crash worthy, more correction.
Balance of probabilities suggests downside or sideways atm (assuming no legislative or other form of govt intervention), so yield would be a driving factor for me, id prefer to sit and wait.
From general point of view it seems posters are either
a) older and have an established portfolio and have it in their interest to shun any negativity or
b) be younger, currently renting with a good amount of savings seeing no value in the market atm (me)
[insert argument: i bought in 1990, and look at me now, im awesome..]