Why are so many on this forum against property?

[bene313]

Thank you to those who are successful in their property careers and have dedicated the time to sharing their wealth of information.

Did it cross your mind that some of those with a negative or bearish view on property might still in fact be successful in property?

I know of plenty of people who have had success with property that aren't exactly enthusiastic about the market at the moment.

So many newcomers arrive here with stars in their eyes all excited about their new love for investment property, only to feel let down by some of the bearish posts on this forum. Well so what. This is a forum for investors, and investors look at the risks and how to deal with it. If you think there isn't a bit risk around the property market at the moment you are kidding yourself.

 

[tobybarton]

Not very friendly.

What did your post contribute? Just looks like another newcomer wanting to decide who is welcome and who is not. This is a democratic forum and you must take it as it is, or not.

I apologise, I didn't mean to be unfriendly. I just think there are a lot of people ready to add their negativity, that I agree we should spend more time posting positively to the forums. I have had certain users who are quite knowledgeable comment negatively and consistently on certain topics, particular successful property developers I know, and I can't help but think (in my opinion) their time might be better spent on putting their words into practice. Again, this is just my experience.

I appreciate the ideas and expertise of all contributers, it really is a remarkable opportunity to be able to share like this. I just think some people underestimate the power of the words written here.

Again, my opinion.

 

[Gun It]

Just need to filter through the dirt to find the gold nuggets

I don't know why some people who don't have a good word to say about property in Australia still keep coming back here to post though.

I don't knit, so I don't hang out on knitting forums!

It really depends on how you view this forum. I view it as one of the forums / sources where I get information on investing generally. By that measure - I don't mind it if I'm reading negative or bearish views at all.

For example - this forum has one of the most balanced sources of information on off-the-plan property investments (with most of the informed comments being rather negative). According to the above quote those who don't have a good word to say about off-the-plan properties shouldn't be posting on those threads. This would be an obvious loss to the forum and all new investors.

If negative or bearish comments cause new investors to stop and fully think about the investment they are looking to make (e.g. in an off-the-plan apartment) then I think that is a great outcome. That way they have fully evaluated their decision.

A caveat to my view: People who constantly moan about how buying a property is impossible drive me nuts.

 

[Player]

It really depends on how you view this forum. I view it as one of the forums / sources where I get information on investing generally. By that measure - I don't mind it if I'm reading negative or bearish views at all.

For example - this forum has one of the most balanced sources of information on off-the-plan property investments (with most of the informed comments being rather negative). According to the above quote those who don't have a good word to say about off-the-plan properties shouldn't be posting on those threads. This would be an obvious loss to the forum and all new investors.

If negative or bearish comments cause new investors to stop and fully think about the investment they are looking to make (e.g. in an off-the-plan apartment) then I think that is a great outcome. That way they have fully evaluated their decision.

A caveat to my view: People who constantly moan about how buying a property (of a calibre and location they can't afford yet) is impossible drive me nuts.

Good post Gun It.

I agree, the diversity of views posted here by most people offers the opportunity to make more balanced considerations and investment decisions.

That's what makes this a forum, rather than a yipee kayay fan club with only one way views. There are the occasional trolls, however they are, in time, dealt with.

I took the liberty of adding some content to your closing line above. Parentheses mine......there are affordable properties for someone everywhere. Doesn't mean it's right for everyone though, all the time, nor at the same time

 

[BayView]

Interesting point was made on the Bill Maher show on Foxtel yesterday.

The panelist mentioned that the average CEO salary was 30 times the average wage, some 20 years ago...now it is 300 times the average wage.

Then I started thinking about this a little deeper.....

Now, it would be fair to say that from the top of the pyramid down, each level of employee will be looking to reward themselves with more depending on their power to do so within the Company.

So, this would also mean that as the pyramid broadens towards the bottom where the majority of wage earners are, their power to change their ability to earn more will decrease, so they end up with less. The gap widens.

Therefore, you end up with a section of the (Global) community that earn a disproportionate amount to the rest, and therefore can afford to buy into the better areas in which to live.

This alone will contribute to the unaffordability of housing in areas where the average person traditionally had a chance to afford to live, and force a large majority out into the cheaper and less desirably located areas.

The numbers of those with more hasn't necessarily changed, but their amount of more has, thus they can pay more and more - putting the desirable properties out of reach for those who are..."average".

 

[Belbo]

Therefore, you end up with a section of the (Global) community that earn a disproportionate amount to the rest, and therefore can afford to buy into the better areas in which to live.

This alone will contribute to the unaffordability of housing in areas where the average person traditionally had a chance to afford to live, and force a large majority out into the cheaper and less desirably located areas.

The numbers of those with more hasn't necessarily changed, but their amount of more has, thus they can pay more and more - putting the desirable properties out of reach for those who are..."average".

An interesting line of thought, Bayview. Growing income disparities and the increasing polarisation of wealth is a worldwide phenomena though, while the high cost of housing (both to rent and to buy) is seen by many to be a particularly Australian problem. Is it the favourable tax treament that property investing receives here then that is at the root of the problem, as ANZ's Phil Chronican suggests?
http://www.smh.com.au/money/investing/bank-exec-questions-negative-gearing-20110603-1fjq7.html?

 

[Telejazzer]

Not sure if it was Dan or Nan who made this post but I notice just 26 posts between them.

Here is another thing I've noticed of late: Starry-eyed newcomers objecting to diversity of opinion.

What ya sees is what ya gets. Live with it. LOL

I was one of these starry-eyed individual when I finished a property course a few years back with motivational speaking, holding your hand bull$h*t thinking this is my ticket to success until I found the harsh reality of how hard putting together a deal is.

Nowadays, I appreciate straight talking individuals who tells you how it is and if you don't have the determination, the will and the stomach to go through it then p!$$ off.

Just because somebody doesn't agree with you doesn't mean they're negative. I see a lot of people heading into trouble because of deals that doesn't work and they get angry at me when I point it out.

I love this forum because that's exactly what the more experienced individuals do and that is 'asking the hard questions'. Most of the time I find there's a fine line between being 'negative' and being 'realistic'. Only my opinion of course.

 

[BayView]

An interesting line of thought, Bayview. Growing income disparities and the increasing polarisation of wealth is a worldwide phenomena though, while the high cost of housing (both to rent and to buy) is seen by many to be a particularly Australian problem. Is it the favourable tax treament that property investing receives here then that is at the root of the problem, as ANZ's Phil Chronican suggests?
http://www.smh.com.au/money/investing/bank-exec-questions-negative-gearing-20110603-1fjq7.html?

In the USA, everyone gets a tax break on their PPoR mortgage, so I don't know that the investors here in Aus with their neg gearing concessions are really a factor.

In the USA, it is an incentive to try and keep trading up to the bigger PPoR as the income increases, so they do.

especially when you consider that we are only about 25-30% of the resi property market, and as a group we are tight @rsed and trying to crunch the Vendor for a cheaper deal.

The majority of buyer "frenzy" I've ever seen in my life is from the emotional PPoR buyer who drive up the prices during a boom and usually during an auction at this time.

In the higher end areas where finance is less of an issue, the prices here can often go up quickly due to the cashed up professional or out of towner or O/S buyer who thinks it's cheap here, or who is trying to hide some money from their own tax dept back home.

 

[Belbo]

In the USA, everyone gets a tax break on their PPoR mortgage, so I don't know that the investors here in Aus with their neg gearing concessions are really a factor.

In the USA, it is an incentive to try and keep trading up to the bigger PPoR as the income increases, so they do.

especially when you consider that we are only about 25-30% of the resi property market, and as a group we are tight @rsed and trying to crunch the Vendor for a cheaper deal.

The majority of buyer "frenzy" I've ever seen in my life is from the emotional PPoR buyer who drive up the prices during a boom and usually during an auction at this time.

In the higher end areas where finance is less of an issue, the prices here can often go up quickly due to the cashed up professional or out of towner or O/S buyer who thinks it's cheap here, or who is trying to hide some money from their own tax dept back home.

This is quite contrary to certain sectors of public opinion that claim PIs are outbidding homebuyers with their negative gearing advantage and so are the real cause of unaffordability.

So, to what extent would you say that wealth polarisation rather than negative gearing accounts for unaffordability?

NB: The two aren't by any means mutually exclusive, many would argue. Increasingly high income earners will logically look for the best tax advantages, and negative property gearing has to count as one of the all-time best (discounting salary sacrificing, on the proviso there that you have faith in the stockmarket).

 

[JohnHenry]

Do some of the people on this forum who seem to be against property investment have ulterior motives?

I made my first real estate investment 4 years ago and now I have 3 properties, this was after quite a few failed attempts to get my first property. Most of the views I have read on this forum are extremely helpful and I appreciate people who have achieved through property are willing to answer questions and give good advice.

What concerns me is I have been reading through so many forums on here and I have noticed a bit of a trend with a few people stating how terrible it is to invest in property. Things like your better off renting, or housing prices are going to crash.

There also seems to be quite a few people around who continually label housing as being 'un-affordable' I believe this particular term should not even exist, it is a very negative term.

There is so much good information on here from people who have pushed through all of the doom and gloom attitudes and made it, and for newer investors this is who I want to be learning from. Some to me seem to be trying to promote fear in investing in property. This can be harmful to first home buyers who are coming on here determining whether to rent or buy. I can see some people becoming life time renters following some bad advice.

I guess what I am trying to say, some of these people on this forum who appear to be against property are they trying to influence people not to invest for the wrong reasons?

Yes for sure, so that the house or property price in general falls down.

Recently in this year I notice that there are a lot of Seminar and Property mentoring coach session I guess they' re doing it so that the newbie people buy the already overpriced property in Australia.

 

[Gun It]

The panelist mentioned that the average CEO salary was 30 times the average wage, some 20 years ago...now it is 300 times the average wage.

I think panelist was quoting outrageous numbers for effect. See a comparison of CEO pay vs. average worker pay below:

http://www.rightsatwork.com.au/geta...803e97428bd/ACTU-Executive-PayWatch-2010.aspx

According to the article, in 2010 average CEO pay was 31.4x average worker pay and this is overstated still. The CEO's they refer to are CEO's for the top 100 companies listed on the ASX. These are naturally the top paid executives in Australia and not representative of CEO's across all firms. I wonder what the average would be brought down to if you took the top 300 ASX listed companies (or started including private enterprises).

 

[BayView]

This is quite contrary to certain sectors of public opinion that claim PIs are outbidding homebuyers with their negative gearing advantage and so are the real cause of unaffordability.

I think the key words there are PUBLIC and OPINION.

Given that the majority of the public are not PI's and never will be, and given that many of the public view investors as greedy b@stards, this opinion would be common if you did a street corner survey.

I reckon the figure would be off the charts if you went to an area near a Uni full of young people who are probably FHB's (or trying to be); say; around Melb Uni, or RMIT or one of those.

Go to an area like Camberwell or Brighton and plonk yerself outside a David Jones store and the figure would be totally different.

There will, of course, be an element of PI's who make big mistakes; bidding up the price of a property which will undermine their cashflow bottom-line, but I reckon it'd be a small %. The ones more likely to do this would be yer high-earning professionals such as a doctor or lawyer etc who were told by the accountant to go out and buy a property to get the tax deduction.

I've put in offers on literally dozens of properties over the years, and never ever offered the asking price.

Now, I'd consider myself no genius; just one of the majority normal try-hard investors who I reckon makes up the majority of PI's - we want to buy cheap, rent high, retire early and with plenty.

The majority of us haven't got endless after-tax dollars to waste on destroying our possible rent return just to get the deal.

 

[BayView]

I think panelist was quoting outrageous numbers for effect. See a comparison of CEO pay vs. average worker pay below:

http://www.rightsatwork.com.au/geta...803e97428bd/ACTU-Executive-PayWatch-2010.aspx

According to the article, in 2010 average CEO pay was 31.4x average worker pay and this is overstated still. The CEO's they refer to are CEO's for the top 100 companies listed on the ASX. These are naturally the top paid executives in Australia and not representative of CEO's across all firms. I wonder what the average would be brought down to if you took the top 300 ASX listed companies (or started including private enterprises).

It was a USA show, and the panelist was Arianna Huffington. I expect she was quoting USA CEO's - and keep in mind that in the USA they only consider the world to be what happens in their yard - unless it's also where their armies are fighting currently.

I have no doubt there would be some CEO's over there earning 1,000 times the penguin crumbs, and over there the average wage earner is earning lower than here. So, this would be make it easier to get the stats she mentioned.

I doubt she would throw that figure out there on national tv without getting it verified first of course.

 

[Sunfish]

It was a USA show, and the panelist was Arianna Huffington. I expect she was quoting USA CEO's - and keep in mind that in the USA they only consider the world to be what happens in their yard - unless it's also where their armies are fighting currently.

I've heard these figure too but as you say, they refer to the US. Until recently the relevant figure for the UK was quite low too.

The US is has never thrown off the "slave-master" attitude. The reason they aren't serious in actually doing anything about illegal immigrants is because they need the cheap labour, and if they ceased to be "illegals" they would be able to demand rights. Even "legals" are usually working poor.

BTW The recently reported increase in jobs was fueled 50% by McDonald's seasonal summer hire. What would be the hourly rate of a burger flipper?

 

[BayView]

BTW The recently reported increase in jobs was fueled 50% by McDonald's seasonal summer hire. What would be the hourly rate of a burger flipper?

Shudder to think SF.

My guess would circa $5 per hour?

How's this (and I've mentioned this in another thread before); when we lived in LA, we hired the odd videos at Hollywood Video (like Blockbuster or one of those).

One day we were there (my son and I) and he needed to do a wee; badly.

I asked Ralph - the manager who was approx 45 years old - if we could use their toilet. "Sure!"

In we go, and above the washbasin was the staff regulations poster with the wages noted on it.

The minimum wage for their job was $5.75 per hour I think from memory (or $5.45p/h?)

Ralph was on $11 per hour - he was the Manager. This was in 2006.

I don't think their wages have gone up much since then - unless you're a CEO or such like.

 

[Gun It]

It was a USA show, and the panelist was Arianna Huffington. I expect she was quoting USA CEO's - and keep in mind that in the USA they only consider the world to be what happens in their yard - unless it's also where their armies are fighting currently.

I have no doubt there would be some CEO's over there earning 1,000 times the penguin crumbs, and over there the average wage earner is earning lower than here. So, this would be make it easier to get the stats she mentioned.

I doubt she would throw that figure out there on national tv without getting it verified first of course.

My apologies - I didn't notice that it was a US show. I just looked up the data and came up with ~270x! Interesting the difference when compared to Australia.

As a side note (not wanting to hi-jack the thread) I still have a problem with the data set:

To get this result, the panelist must have compared the 300 hundred highest wage earners in the US (the data set that I used quoted available data for S&P500 companies) with the average workers across the country (in all types of positions and companies).

What would be a whole lot more useful would be to know what the average wage was in a particular company relative to its CEO and then average that across companies.

 

[Sunfish]

What would be a whole lot more useful would be to know what the average wage was in a particular company relative to its CEO and then average that across companies.

I think that's the way it was done, but it was a while back I read the numbers.

 

[StefanA]

I guess what I am trying to say, some of these people on this forum who appear to be against property are they trying to influence people not to invest for the wrong reasons?

Property investors capable of being influenced by property D&G'ers are equally capable of being influenced by dodgy REAs and spruikers.

In both cases, the investor has de-prioritized the need for level headed personal research.

 

[Belbo]

Yes for sure, so that the house or property price in general falls down.

Recently in this year I notice that there are a lot of Seminar and Property mentoring coach session I guess they' re doing it so that the newbie people buy the already overpriced property in Australia.

JH, you seem to have an anti-property investor agenda. You also seem to have a lot of anger.

Can I suggest a deep breath before you post, a reflection on what you're about to say, and a little less anger in saying it?

You'll simply be expelled from this forum for trolling if you don't.