What ever happened to inspired conversation ...
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lol .....
It took me a while to work the ignore thing out Marc ...... but its worth it.
Martin
MJK
In my imaginary idea, property in outer areas could be regulated in terms of price growth by government supply, but this wouldn't keep all house price growth down to 2% - prices would still rise by greater amounts in the more popular areas, so investors would still do ok, just not as well as at present.
Anyway if the government provided more and investors less, the government would spend less on rental tax deductions which would help it's direct provision of housing.
Take Brisbane as an example - there's supposed to be 75000 people a year coming here each year (maybe that's the whole southeast or all of Qld, but whatever) - if the government (state/federal) funded the building of 5 or 10000 houses per year and threw in an extended railway line and other infrastructure, and sold these houses at market rate to start with .
Then each year raise the price by 2% for the next batch of housing. This should cost the government little at first, and then a bit more as time goes by as inflation exceeds the 2% rise in income. Over time, affordability should improve, at least in the outer areas. Investors would still make CG of 5% or so, because even if they bought houses from the outer ring, these houses would not be outer for very long.
Aimjoy might call this communism, but government is the biggest market force in the world. Government even has a bit to do with the affordability of property investment! There are probably countries with less government than Australia (Afghanastan springs to mind) but, well ... maybe I am a stirrer pendo.
In my imaginary idea, property in outer areas could be regulated in terms of price growth by government supply, but this wouldn't keep all house price growth down to 2% - prices would still rise by greater amounts in the more popular areas, so investors would still do ok, just not as well as at present.
Anyway if the government provided more and investors less, the government would spend less on rental tax deductions which would help it's direct provision of housing.
Take Brisbane as an example - there's supposed to be 75000 people a year coming here each year (maybe that's the whole southeast or all of Qld, but whatever) - if the government (state/federal) funded the building of 5 or 10000 houses per year and threw in an extended railway line and other infrastructure, and sold these houses at market rate to start with .
Then each year raise the price by 2% for the next batch of housing. This should cost the government little at first, and then a bit more as time goes by as inflation exceeds the 2% rise in income. Over time, affordability should improve, at least in the outer areas. Investors would still make CG of 5% or so, because even if they bought houses from the outer ring, these houses would not be outer for very long.
Aimjoy might call this communism, but government is the biggest market force in the world. Government even has a bit to do with the affordability of property investment! There are probably countries with less government than Australia (Afghanastan springs to mind) but, well ... maybe I am a stirrer pendo.
tomd,
Why is it many younger people today expect govt assistance to get into a residential property (I don' know if you are young or not, .. just making an assumption)..
Look, I know this subject has well and truly been discussed before by other's, but I remember buying my first house many, many years ago (early 1980's) around the 17% interest rate time. I had to buy on the very outer northern suburbs of Perth which was regarded out in the sticks and it was a long way from anywhere.
It wasn't any less affordable then for me and others compared to many today. I was an apprentice painter on very low wages, but I saved and scraped together the deposit. It was tough going but eventually wages go up and it becomes a little easier.
Instead of people whinging that the govt should be doing this or that .... just work with what you have at the moment, it's all you can do. If the govt does something positive in the future .. great, but if not people should buy what they can where they can that is affordable. If that means going without some things or having to travel more distance to work in order to get a property then so be it, .. put it down to character building.
The reason the older generation slams the young is because we all had to struggle, go without and live on the outer suburbs in order to fund our first home. People and the media tend to think this is a new problem .... it's not, .. we just got on and worked with what we had.
I advised a young couple in April this year who were living with one set of parents in inner Brisbane to save money for a deposit. They were complaining that prices were rising at a greater rate than they could save. We were up there buying an IP near Ipswich and I suggested that as an entry home at the time they could pick up an older highset type property for around $190k plus .... of which they had 10% deposit, .... well the look of shock at moving that far out from family and work ...... needless to say they are still living at the parents.
I even suggested to them to buy and use the property as an IP to start with. If they had bought they would have made an excellent profit so far, which even if they sold 2 years from now would provide a large deposit on their own home. We bought 2 IP's at the same time and recently they were re-valued at a combined growth of $92,000.
Look I'm sympathetic to how tough it is, but complaining about it doesn't solve a thing. 6 years ago my wife and I didn't even have our own home, we were renting (bad business experience) .... today we have 7 properties .... I'm not saying this to boast, its just reality ..... I'm a cleaner at a school and my wife works over 3 hours away through the week and comes home on weekends (she can earn more there). We had to make sacrifices to succeed ... and its paying off ... The next thing is to get our financial position to the point where my wife can work locally ... and it is not far off.
Martin
Why is it many younger people today expect govt assistance to get into a residential property (I don' know if you are young or not, .. just making an assumption)..
Look, I know this subject has well and truly been discussed before by other's, but I remember buying my first house many, many years ago (early 1980's) around the 17% interest rate time. I had to buy on the very outer northern suburbs of Perth which was regarded out in the sticks and it was a long way from anywhere.
It wasn't any less affordable then for me and others compared to many today. I was an apprentice painter on very low wages, but I saved and scraped together the deposit. It was tough going but eventually wages go up and it becomes a little easier.
Instead of people whinging that the govt should be doing this or that .... just work with what you have at the moment, it's all you can do. If the govt does something positive in the future .. great, but if not people should buy what they can where they can that is affordable. If that means going without some things or having to travel more distance to work in order to get a property then so be it, .. put it down to character building.
The reason the older generation slams the young is because we all had to struggle, go without and live on the outer suburbs in order to fund our first home. People and the media tend to think this is a new problem .... it's not, .. we just got on and worked with what we had.
I advised a young couple in April this year who were living with one set of parents in inner Brisbane to save money for a deposit. They were complaining that prices were rising at a greater rate than they could save. We were up there buying an IP near Ipswich and I suggested that as an entry home at the time they could pick up an older highset type property for around $190k plus .... of which they had 10% deposit, .... well the look of shock at moving that far out from family and work ...... needless to say they are still living at the parents.
I even suggested to them to buy and use the property as an IP to start with. If they had bought they would have made an excellent profit so far, which even if they sold 2 years from now would provide a large deposit on their own home. We bought 2 IP's at the same time and recently they were re-valued at a combined growth of $92,000.
Look I'm sympathetic to how tough it is, but complaining about it doesn't solve a thing. 6 years ago my wife and I didn't even have our own home, we were renting (bad business experience) .... today we have 7 properties .... I'm not saying this to boast, its just reality ..... I'm a cleaner at a school and my wife works over 3 hours away through the week and comes home on weekends (she can earn more there). We had to make sacrifices to succeed ... and its paying off ... The next thing is to get our financial position to the point where my wife can work locally ... and it is not far off.
Martin
Hi Martin - I often hear this but it presents me with a contradiction that I can't understand. If the value of property always goes up then by definition it has to be more difficult to afford now than it was in the past (i.e. it has gone up in real terms). Or to put it another way - if it is tough to buy a home now and property will continue to outstrip inflation and wages - then won't it be even tougher in the future? It has to be doesn't it?
Hi YM,
I too had this thought once but I remember reading on here once that offered an explanation to this. It goes something like this:
Well located property always go up. Back then a property on the city fringe may not be consider a well located property, the infrastructure might not be there yet, the amenities might be not be close so the property is cheaper and more affordable because of these unattractive qualities. An average wage earner could comfortable buy this property.
Fastforward a couple of property cycle and the city has grown, that property is no longer on the city fringe, there are now good infrastructure in place and plenty of close by amenities, its been renovated and the suburb has been gentrified, a large shopping complex has open up or the place has now become a cafe cultured trendy area. That property has now become well located and thus its value has increase dramatically and is no longer affordable to the average wage earner. However there is still affordable property for that average wage earner its just now on the new city fringe.
So YM, that new "City Fringe" for Brisbane would be Deagon/Bracken Ridge areas to the North, Riverview/Dinmore areas to the West and Logan/Trinder Parkareas to the South, although there is still affordable stuff closer in if you hunt at places like Archerfield, Coopers Plains and Rocklea.
All close to Rail as well.
Their my thoughts and examples anyway.
(Dave gets on RE.com and starts looking for another IP)
Dave
All close to Rail as well.
Their my thoughts and examples anyway.
(Dave gets on RE.com and starts looking for another IP)
Dave
No, you are making too many assumptions.
Just because a m2 of dirt in a given location can constantly increase in real terms, the entry barrier for FHBs doesn't have to be affected. For example, they buy less m2 of dirt, buy m2 in a different location, they can afford more due to descressionary income increasing to pay more etc.
Quote:
Originally Posted by yieldmatters
Hi Martin - I often hear this but it presents me with a contradiction that I can't understand. If the value of property always goes up then by definition it has to be more difficult to afford now than it was in the past (i.e. it has gone up in real terms). Or to put it another way - if it is tough to buy a home now and property will continue to outstrip inflation and wages - then won't it be even tougher in the future? It has to be doesn't it?
Good in theory, but what has always happened is that property adjusts to the affordability factor for people.
When it is unaffordable, the prices stagnate for a while. When the climate is right, people start buying again, prices get pushed up.
So, all your extrapolated theories of the last month are futile.
Buy when the affordability is low and no-one is buying, never sell, and then repeat (many times).
Warren Buffet said "I buy my straw hats in the winter".
There endeth the lesson.
Is the thread finished now? Please?
Originally Posted by yieldmatters
Hi Martin - I often hear this but it presents me with a contradiction that I can't understand. If the value of property always goes up then by definition it has to be more difficult to afford now than it was in the past (i.e. it has gone up in real terms). Or to put it another way - if it is tough to buy a home now and property will continue to outstrip inflation and wages - then won't it be even tougher in the future? It has to be doesn't it?
Good in theory, but what has always happened is that property adjusts to the affordability factor for people.
When it is unaffordable, the prices stagnate for a while. When the climate is right, people start buying again, prices get pushed up.
So, all your extrapolated theories of the last month are futile.
Buy when the affordability is low and no-one is buying, never sell, and then repeat (many times).
Warren Buffet said "I buy my straw hats in the winter".
There endeth the lesson.
Is the thread finished now? Please?
Last edited:
okay - not sure whether to pop this into this thread, or start another - but it is inspiring.
am currently reading some snippets on john fitzgerald - 44 years old, left school with nothing and currently controls property investing related companies turning over $100mil a year.
quote:
In my experience, successful wealth builders have three things in common. First, they are positive and optimistic about the future, continually looking for opportunities and ready to have a go. Second, they are responsible, ready to use what they've got and they avoid blaming others for their circumstances. and third, they're proactive - and set clear, challenging goals and go for them, decisively.
end quote.
that about sums up the majority of ss-er's who have achieved success in their own way. obnoxiously positive, self-responsible and challenge-setting bunch aren't we?
am currently reading some snippets on john fitzgerald - 44 years old, left school with nothing and currently controls property investing related companies turning over $100mil a year.
quote:
In my experience, successful wealth builders have three things in common. First, they are positive and optimistic about the future, continually looking for opportunities and ready to have a go. Second, they are responsible, ready to use what they've got and they avoid blaming others for their circumstances. and third, they're proactive - and set clear, challenging goals and go for them, decisively.
end quote.
that about sums up the majority of ss-er's who have achieved success in their own way. obnoxiously positive, self-responsible and challenge-setting bunch aren't we?
Nice story but I'm never that impressed by these guys - for every john fitzgerald there is another guy wo is equally positive and capable who has failed. It's called surviver bias in statistics - you don't see those that have dropped out of the race.
So entry-level homes have not increased relative to wages (smaller blocks or different locations) but other houses have? Is that the solution to the riddle? Fair enough - odd - but fair enough.
my2cw
first homes seem to always be adjusted to what the market will bear, features added or deleted from the lists to keep the price at what Mr&MsAverage 1st home buyer can afford. The builders large or small would almost have to, to keep in business, the paint gets thinner on the walls. the landscaping is less, or the land is less.
but once you get a foot in the door,,
first homes seem to always be adjusted to what the market will bear, features added or deleted from the lists to keep the price at what Mr&MsAverage 1st home buyer can afford. The builders large or small would almost have to, to keep in business, the paint gets thinner on the walls. the landscaping is less, or the land is less.
but once you get a foot in the door,,
Count me in as well!
Being a rentier has a nicer ring about it when you have to fill in those job description boxes than being a 'self-funded retiree', coyly claiming to be 'self-employed' or gauchely boasting about being 'financially successful'. Many people are unfamiliar with the term which is probably all to the good.
Furthermore, this ancient and dignified term is one of the few that hasn't yet been hijacked by the various wealth promoters and spruikers.
Wikipedia has an entry on rentier capitalism: http://en.wikipedia.org/wiki/Rentier_capitalism though answers.com provides the most straightforward definition: http://www.answers.com/topic/rentier
Peter
Why would you that makes them NOT SUCCESFULL if they fail der???
Do you make this crap up?
