Interesting article.
http://www.businessspectator.com.au...g-slump-pd20110128-DHRZA?OpenDocument&src=pmm
http://www.businessspectator.com.au...g-slump-pd20110128-DHRZA?OpenDocument&src=pmm
The 'no housing bubble' myth can't last
- Thread starter simo74
- Start date
We've heard it all before. Most of us are realistic enough to understand that prices won't go up exponentially next week or next month. Slow, steady gains are more than adequate for most people who own IPs.
What is your motivation in wanting to tell us what we'e already heard so many times on this forum? Are you one of those opportunists who wants the market to crash so you can get in cheaply?
And if the world is about to end soon, why are you here, posting on a property forum?
What is your motivation in wanting to tell us what we'e already heard so many times on this forum? Are you one of those opportunists who wants the market to crash so you can get in cheaply?
And if the world is about to end soon, why are you here, posting on a property forum?
Thats a great article and its points are unarguable. Self interest by banks, RE's, BA's, mortgage brokers etc....drives the property market and its a massive industry that feeds off the property market doing well. They dont want to see it drop.
Meconium, i dont know how old you are or how long youve been interested in property investing but there is no such thing as slow, steady gains in property prices. There are long periods of nothing or negative growth and spurts of positive growth. It is certainly not linear.
We are heading into a long period of no/negative growth now. At some stage in the future there will be a couple years of high growth. Wont be for a long time this time. I wouldn't be surprised to see steady falls for years. But i think a crash is unlikely. Ive been wrong before tho.
Meconium, i dont know how old you are or how long youve been interested in property investing but there is no such thing as slow, steady gains in property prices. There are long periods of nothing or negative growth and spurts of positive growth. It is certainly not linear.
We are heading into a long period of no/negative growth now. At some stage in the future there will be a couple years of high growth. Wont be for a long time this time. I wouldn't be surprised to see steady falls for years. But i think a crash is unlikely. Ive been wrong before tho.
Early 90s. Family has been at it for much longer. Am I too young to be erudite? How long have you been at it & what's the worth of your portfolio?
For all property? In every single town, suburb and city? How selfless of you to come to this property forum and warn us. Perhaps you can sell all your IPs before the great crash and buy them back for pennies at the very bottom?!
More likely you are like Bluestorm who wants the market to crash so he can get a few cheapies. He has it all worked out like clockwork. 2011-2012 are going to be the down years. And after that he wants to buy three more IPs.
When enough people shout "fire" in a crowded cinema, there's bound to be a disaster, even if there is no fire.
Long enough and big enough.
I said there will unlikely be a crash but a steady fall in prices for years. At best a levelling of prices, which is still a loss ex CPI.
I said there will unlikely be a crash but a steady fall in prices for years. At best a levelling of prices, which is still a loss ex CPI.
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If your ability to forecast the future is as good as your English, it looks as if we are all in very serious trouble.
BTW Thanks for warning us. Very selfless of you. So why aren't you selling off your portfolio in entirety if you think there's a meltdown ahead of us? You could buy it all back for pennies later.
You have over 3000 posts to your name. Are you one of those prolific posters who has lots of time on his hands but owns very little in the way of property? One of them (a nice fellow really) is selling everything and heading for the hills. Or so he says.
I wonder if you were bleating the same nonsense (ie. "the world is going to end") during the GFC?
BTW Thanks for warning us. Very selfless of you. So why aren't you selling off your portfolio in entirety if you think there's a meltdown ahead of us? You could buy it all back for pennies later.
You have over 3000 posts to your name. Are you one of those prolific posters who has lots of time on his hands but owns very little in the way of property? One of them (a nice fellow really) is selling everything and heading for the hills. Or so he says.
I wonder if you were bleating the same nonsense (ie. "the world is going to end") during the GFC?
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Again, who said anything about a meltdown? I've been through a few cycles to not have to sell a thing. My portfolio is pos. geared, so i don't care what happens. I can just see it through.
Only struggling neg gearers will have to sell up if they cant hang in there.
Only struggling neg gearers will have to sell up if they cant hang in there.
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Personal attacks are the last resort in an argument, friend.
I bet there's a whole heap of people on here that I could whip in a Spelling Bee, but I bet they would run circles around me when it comes to property.
Thanks friend, in case you didn't notice he started the personal attacks . But never mind. I'm contrite. Apology accepted Evand?
Can we now return to our doom and gloom prophecies please?
"The world is going to end because.........(fill in the blanks)
"I'm selflessly sharing this wisdom with you because.......(fill in the blanks)
"I have the monopoly on all economic wisdom because.......(fill in the blanks)
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Easy there, partner. Most people in this thread aren't claiming that the world is going to end, simply stating that they believe there will be a period of 0 to Negative growth.
Take it easy, it's the internet.
Eating too many lentils can have a deleterious effect on one's ability to interact with people. It is a wise man indeed who washes lentils beefore consuming them
Geez mate, calm down before you have a coronary
Last time i checked this is a property investors forum not a Property Bull forum. Someone sounds a little scared.
See unlike you i like to read a varying opinion on the market. No ones making you read it mate. Keep ya blinkers on. See if i care
As for getting in cheaply.....i already have. Many decades ago
I have maintained for some years now that the issue with tight development controls is what happens if the demand curve does shift? The government then is left with a choice; subsidise development to prevent unemployment, or as they do in Australia subsidise the demand side with first home buyer boosts, covered bonds, capital gains tax exemptions etc etc. Is it not better to have a supply side which is responsive leading to more stable house prices in line with general inflation over the long term. This would take out the speculative component and again people would buy homes based on yield if it's an investment with the inflation hedge as a built in bonus.
Thus far we have always adopted the latter approach (demand side stimulous) but is this sustainable? Is it not better to have an efficient development industry where the government is on the side of developers / development. I suspect to a large extent this is the change in Perth since the liberals got into power at the state level. They seem to be going local councils with a stick to get developments up but the resident developers here would likely know more?
I have sees the councilors on the news complaining about some old heritage factory that has sat idle for decades or has been used for the local swap meet the second sunday of every month and what an outrage that it should be turned into a more intensive use. My local area has a state residential development going ahead and it was rammed straight through with a lot of local criticism.
Sorry if it's not clear how this is on topic, what the business spectator article is getting at is with an unresponsive controlled new supply side you get bigger bursts in price when the demand side shifts. Whether that shift is to the right (FHOGBoost say) or too the left (unemployment, higher credit costs).
Thus far we have always adopted the latter approach (demand side stimulous) but is this sustainable? Is it not better to have an efficient development industry where the government is on the side of developers / development. I suspect to a large extent this is the change in Perth since the liberals got into power at the state level. They seem to be going local councils with a stick to get developments up but the resident developers here would likely know more?
I have sees the councilors on the news complaining about some old heritage factory that has sat idle for decades or has been used for the local swap meet the second sunday of every month and what an outrage that it should be turned into a more intensive use. My local area has a state residential development going ahead and it was rammed straight through with a lot of local criticism.
Sorry if it's not clear how this is on topic, what the business spectator article is getting at is with an unresponsive controlled new supply side you get bigger bursts in price when the demand side shifts. Whether that shift is to the right (FHOGBoost say) or too the left (unemployment, higher credit costs).
See unlike you i like to read a varying opinion on the market. No ones making you read it mate. Keep ya blinkers on. See if i care
)
So why not put your money where your mouth is. If the whole market is going to go down, why not sell everything and buy it all back later for pennies?
As for getting in cheaply.....i already have. Many decades ago
I presume from your handle that you were born in '74. If you've been investing for decades, then you must have started as an infant
Or maybe I'm being presumptious - maybe you are 74 years old.
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So why not put your money where your mouth is. If the whole market is going to go down, why not sell everything and buy it all back later for pennies?
I know this question wasn't directed at me, but this is how I view it...
I have a number of properties that I now believe are significantly overvalued. I think their prices will, at best, stagnate over the coming three to five years and, at worst, decline significantly (again, of course, I could be wrong). Despite that, I have no intention of selling for two reasons.
1. I bought these properties to provide cashflow and they are doing exactly that. They were CF+ from day one and continue to serve the purpose for which I purchased them. Should their prices fall 20% they will still continue to serve the purpose of providing positive cashflow.
2. Capital Gains Tax and transaction costs. I have very significant unrealised capital gains built up in a number of my properties. The CGT liability alone on a sell and rebuy strategy would mean that prices would have to drop by more than 30% just to break even. Closer to 40% when you take into account transaction costs as well. Even if there was a fall of this magnitude, there would be a glut of CF+ properties hitting the market as overleveraged investors went to the wall - and I'd be in a position to pick up a sizeable number on cash offers as it is.
It's not all black and white, meconium.
A good, balanced post.
Cash Flow + is a nice situation to be in. I'm curious: Did you buy many years ago? In a regional location? Please share, maybe we can learn from your experiences.
Oi, I resemble that remark
Lots of free time is fun though. Fun is good. Keeps the blood pressure down.
