We will have a property crash, but this isn’t it! (M. Yardney)
- Thread starter Shadow
- Start date
We're comparing population growth RATES. Not absolute increase in total population. You do understand what RATE means, right? Australia's population growth RATE is currently 60% higher than New Zealand's population growth RATE. If you take NZ's population growth rate of 1% and multiply it by 1.6 (i.e. a 60% increase) you will get Australia's population growth rate of 1.6%.
As time goes to infinity? Lets stick to what is happening in the immediate future...
House prices have become more expensive, on a continual basis for the past 50 years. And they will be even more expensive in the future. Affordability on the other hand is a result of not just price but also interest rates, disposable income, and tax incentives.
Of course house prices can go higher. In fact, they are going higher in many places right now. Also remember that houses will suddenly become 30% 'more affordable' if mortgage rates drop from 9% to 6%.
By the way, I don't think another boom is on the way for a few years.
Shadow.
No, you cannot compare growth rates like that.
If I have two kids, one a metre tall and a young teen, the other 50cm tall and a toddler. The teen's hit a growth spurt and growing at 20% per year, and the toddler's growing at 10% per year, how much faster has the teen grown than the toddler?
Twice as fast? No. The teen is now 1.2 m tall and the toddler is now 55cm. So instead of being twice as tall he is 2.18 times as tall. Relative to the toddler, his growth rate was ((2.18/2)^1/2 - 1) * 100 = 9.1% faster.
Not 100% faster.
Of course they don't, Dazz.
They're not smart enough to own property, and provide a long term roof over their heads for themselves and their family.
Statistics don't matter to me - what matters is putting a roof over my head, for me and my family. You CAN use statistics to back any position you care to take. I once won a university debating challenge - my position was that the Earth was the centre of the Universe, and that the Sun revolved around the Earth. Our team won.
For peace of mind, I will pay MORE then what I can afford for my primary residence. My family is worth it. If I need more money, I will find more money.
My views are clearly in line with the majority of Australian's.
They're not smart enough to own property, and provide a long term roof over their heads for themselves and their family.
Statistics don't matter to me - what matters is putting a roof over my head, for me and my family. You CAN use statistics to back any position you care to take. I once won a university debating challenge - my position was that the Earth was the centre of the Universe, and that the Sun revolved around the Earth. Our team won.
For peace of mind, I will pay MORE then what I can afford for my primary residence. My family is worth it. If I need more money, I will find more money.
My views are clearly in line with the majority of Australian's.
Of course it's twice as fast. Put it this way, a bank charging you 10% interest is charging you twice as much as a bank charging you 5% interest, the difference you pay is double, not 5%! An investment returning 20% per year is performing twice as well as one returning 10%, the difference in the return on your investment is double, not 10%. Can you at least see that?
Probably not.
See; I assumed on this forum you had two separate groups;
1. The experienced and successful investors who gave their opinions/advice on how one could make money out of property, and looked forward to meaningful discussion of same and a few light-hearted slang-offs.
2. The inexperienced newbies who own 0 properties, who sat and listened intently, pencils at the ready to take notes, and asked questions to learn - with an air of eagerness, respect and thankfulness to towards the esteemed group 1. Yay, verily for group 1 doth havest thine Holy Grail.
BUT...
Group 2. has morphed into the group with no property, no pencils and paper for note taking, but a slide rule and spreadsheet, and all the answers - that being we are all evil, greedy specufestors who will be 50% broke this time next week.
Group 1. is leaving the building in droves with their bat and ball.
But, it's quite hilarious! It shows that even a simple interpretation of stats can produce such diverse conclusions, implying subjective factors invovled, otherwise if all factors were known, competent analysts should come up with the same answer.
We're still here...
Don't worry LA - we're still here (although I am probably not a fully fledged Group 1 yet - but on my way).
The rest of us are looking on with great amusement, shrug, and go and get on with doing another deal! It's really quite hilarious!
I don't really know exactly when property will rise again, but I don't know any other really good way of making money besides my small developments and property holdings, so I guess I'll just keep on doing that.
Until Rogue and the other D & Gs can show me a better way of making money (other than just parking it is cash) than the 20% I'm making on my dual occ, then I'll keep plodding along.....and eventually I'll be rich rather than having a PhD in Economics.
I wonder what Jan thinks of all this theorising.....probably just shrugs her shoulders and and goes and buys another 1 or 2.......
Don't worry LA - we're still here (although I am probably not a fully fledged Group 1 yet - but on my way).
The rest of us are looking on with great amusement, shrug, and go and get on with doing another deal! It's really quite hilarious!
I don't really know exactly when property will rise again, but I don't know any other really good way of making money besides my small developments and property holdings, so I guess I'll just keep on doing that.
Until Rogue and the other D & Gs can show me a better way of making money (other than just parking it is cash) than the 20% I'm making on my dual occ, then I'll keep plodding along.....and eventually I'll be rich rather than having a PhD in Economics.
I wonder what Jan thinks of all this theorising.....probably just shrugs her shoulders and and goes and buys another 1 or 2.......
The number is double, but the rate of change isn't.
If Australia's population is 20 million and New Zealand's is 4 million, then a population increase in Australia is 320,000 people and New Zealand 40,000. Do we say Australia is growing 800% faster that New Zealand? No.
It doesn't have to be this way. As the result of this argument won't be known until it is too late to do anything about it I reckon Group One don't spend too much time worrying about such things and concentrate on other threads which actually help them and others increase their level of control over their individual wealth outcomes. Instead of trying to guess long term outcomes that are inherently unknown and can't be controlled anyway.
To me this is all about mindset. You have Group One and other positive people who generally speaking can see money and opportunity all around them, from the plasma TVs everyone seems to have to the lattes to the new cars that seem to be everywhere and the other "must haves" that are all just doodads. Not to mention the fact that a lot of people seem to find the money somehow for some pretty expensive PPORs.
Then there's the D&Gers who just see scarcity, suffering, financial hardship and people who don't really earn their money because "they don't produce anything". They really see being wealthy as an inherently "unfair" position that will all end in tears eventually due to the natural order of things, or some other skewed concept of "justice".
And then there's everyone in between to varying degrees.
In reality it's all about risk and reward. If you're not prepared to take the risk you won't get the reward, which is a risk of lost opportunity in itself at the very least. If you are prepared to take the risk, you have to have your eyes open to the worst case scenario.
For me, this forum is (or should be?) for those who are prepared to take the risk or at least want to take the risk of property investment at some point in the near future. It should not be a platform to convince society of the evils of property investing, or the unproductive nature of acquiring existing assets or anything else. That's when this debate all gets tiresome and ultimately pointless, at least to me. I don't mind people pointing out potential downside in a course of action but it would be great if the focus could be on what can be actively done to convert that downside into upside. Just saying "go to cash" isn't a property investment strategy - sorry but that's just not good enough. If that's all you've got to say then go create a "term deposit" forum and discuss your innovative wealth creation strategies over there.
If we could focus more on what we can control to create long term wealth out of property, I'm sure we'll get those group ones back...
If NZ population was also 20million to start with and the absolute growth numbers is as above, I'll say 8x times their rate, which is 700% faster. Considering NZ started off at one fifth the base, 800%/5, which is 160%, or 60% faster.
The key word is we are comparing difference in speed/motion/rate of the growth, not the growth itself. This is my last post to this % discussions, it's getting off topic and if you can't see that there is no point in continuing further. C Ya.
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If it helps, this Group 2 newbie with 0 properties went and bought a property. And has half the deposit for #2 ready to go now.
So there are still positives to be found everywhere on SS - but I think people who are actually out there doing it are less likely to spend hours debating the fine points of macroeconomic theory.
hello,
fantastic post shadow, this place is still the lucky country big time
friends bought in paris (Marais area) a few years ago, they got 21sqM for 385k aussie, no parking, syd or any other capital city is nothing like this
they rent out for holiday, go there couple of times a year and plan to head to live permanent in 5yrs
aus still kills it though
thanks
myla
They did but sold it all in 2002 because property prices couldnt get any higher. They are going to buy back in at 1988 prices in another 6 months.
Hey Land
I don't consider myself a D&G'r just because i happen to weigh up the market and form and opinion about the direction it's heading.
I don't think the sky is going to fall in. I simply believe that property prices are primed for a substantial fall. Nothing new. Nothing that hasn't happened before.
As an investor, is it not the smart thing to do to research your chosen market well before diving in? I mean, I know barely anything about the share market, so i wouldn't just go and start buying random shares without deciding which companies i think are going to perform well in the future would I?
As someone interested in long term investment strategies, if i was ready to buy and found a property where the numbers stacked up, why wouldn't i buy?
I appreciate YOUR right to YOUR opinion on the market. I am well aware i have no chance of changing people such as Shadow's minds about where THEY think the market is heading.
All i'm doing is pointing out where certain aspects of some people's theories are flawed in order to provide an alternative viewpoint.
I'm not sitting around waiting for a crash so i can pick up a bargain. I am waiting to secure a much bigger deposit (50%) because my beliefs are that the economy is unstable and i want to protect myself enough from a crisis such as illness, job loss etc.... and because i want to breed.
If i felt the market was more stable and homes prices represented value, i might be confident with a 10% deposit.
I see 19 y/o's on this forum with NO deposit for a home, eager and wanting to build an instant portfolio or properties and retire by the time they are 30y/o. That was me 10 years ago... believe me. No chance in hell i'd have such high expectations in this time of uncertainty.
Just trying to point out the risks.
Cheers
Rogue
hello,
what uncertainty? man things are rolling on, people still shop, drive, talk, play sport, catch public transport, have a bbQ, go to the disco, drink cocktail, pop flippers etc etc etc (and all the other things)
not much is really different
thanks
myla
