Will property values double by 2017?

[Harris]

I honestly hope, what I (and many other people) am predicting does not come true.

No you dont..! Would not believe you for a second.

Reading your posts and your way of shouting and condescending remarks towards forum members show that you would hope the market carshes, all hell breaks loose and you would stand validated.

You seem to rekindle sort of a daja-vu with a lot of similar posts I read with posters posting with same intensity as you are now, back in 2003/04.

Infact if anything, the time was ripe then for naysayers to rubbish property investment (off the back of the biggest gain).

Sky hasnt fallen down and property markets have started recovering across east coast. (melb leading the recovery).

I bet my bottom dollar that this thread (especially your posts) would make a great comical reading similar to a lot of threads in gone-by days.

You are going to run out of steam very soon (the way you are going on in this thread) and would soon realise that your sprint wasnt worth the effort in the land of marathon runners.

Harris

 

[Les]

G'day mbl,

I don't doubt your fervour, and your conviction about this. And, one day, you may well prove to be right.

However, for those who have their "ear to the ground", the signs of your impending collapse will be noticeable. For now, I don't think so - it might be 3, 5 or even 10 years away yet. So, is there not a chance to better our own situations in that 3, 5 or 10 years?

I'm sure you'll be "OK" anyway - with no debt, and rental income growing over the next 3, 5 or 10 years "before the bang". But how much better off would you be if you bought "just one or two more" IP's? (It is likely a rhetorical question, as you seem convinced that this "bang" is going to happen tomorrow) - and that's OK. You sound like you are happy with what you are doing.

....but SO AM I with what I'm doing!! Time will tell who was right or wrong, mbl. Maybe you won't rue the gains you DIDN'T make in the next 3, 5 or 10 years. And that's fine with me. I wish you the best , whatever that means to you.

Others have already said, we aren't your typical Mum and Dad here. Most have already done OK, and are continuing to grow our resources. Meantime, though, we are cognisant of "other signals" that lead us to change our strategy to suit the times. And that happens regularly on this forum (you've been here two minutes, but a search of some of the older threads will show the truth).

YOUR times are not yet upon us. What if everything DOUBLES in value before your "big bang"? Won't we be twice as well off (compared to you) by then? Have you thought of that?

Regards,

 

[willair]

I honestly hope, what I (and many other people) am predicting does not come true.

I'm interested to know what exit plan you have in place,as you said you own everything,
what ever that may be, but you stand to suffer more than anyone else,if all your investments
drop by 50% what will you do,stick
your head back in the sand pit with your pants down, or cut and run..
The problem will be everybody will be in the same boat, so my question
to you is as you think like so many before you this time it's different
why are you not selling everything now when prices are still on the upward
trend ,wait till all the doom gloom meltdown settles down then buy back in when
everything is 50% below current values,I know a lot of people that
are still waiting for that to happen from 1990 onwards..willair..

 

[Mofra]

Interesting reading in the US during most of 06 there was a new residence constructed for every 1.8 households in the US within a year!

What MBL is saying makes perfect sense... for the US market.
The Australian market seems to be supported by a shortage of supply (as MBL would say, high school economics) which, despite the protestations of some, is a great supporter of house prices ("ease of credit" is in part due to inflationary controls set by the reserve bank) than is generally given credit for.

The US is a completely different demographic - 80% of the population do not live in large metropolitan centres, whilst in Australia 80% do. Credit quality is a completely different beast in the US - 30 banks/lenders going bust per month whilst Australia is seeing the opposite - some consolidation in the industry with most new lenders backed by super funds & larger sophisticated interest groups, rather than consolidated groups of investers at the mercy of swap rates & debentures.

I am not expecting a doubling of house prices in 7 years (and certainly not in real terms - this has never been achieved in real terms anyway) however a combination of our different demographic position, higher political sensitivity to interest rate rises & lack of exposure to higher risk mortgage products leads me to belive we will be able to weather most of the storm brewing in the US (where the bursting of the credit bubble appears a forgorn conclusion, even to Congress who are holding enquiries as to why they are in this current mess).

 

[geoffw]

BTW....did you even bother to read any of the links I posted ? Or are you to smug to do so ? Anything that goes against your 'predictions' is wrong is it ?

mbl

This sort of post is uncalled for. It is deliberately antagonistic, and designed to raise an argument.

There's been far too many posts with this sort of tone.

Congratulations, you've just received an infraction.

 

[Andrew_A]

...
I am not expecting a doubling of house prices in 7 years (and certainly not in real terms - this has never been achieved in real terms anyway) ...

What exactly are real terms?

From 1998 to 2005 I have a property that went from 218.9 gold ounces to 415.8 ounces, and think I could find some rare 'real' doublings in 7 years in Australian history if given a definition, I would look at the 1890's to begin with.

I'm interested in 'real' performance measures, sometimes I use gold ounces, working weeks, teacher's salaries and hamburgers when measuring financial worth. I find it perplexing that there isn't more focus on the real values of investments rather than their nominal values. Perhaps the simplest measure is just for how many years you can support your comfortable lifestyle in years, nudge it up high enough and you have financial wealth in my opinion regardless of the nominal $$.

Today I paid $22 for a steak sandwich, coffee and green tea. It was a nice sandwich I admit but I was musing about the cost of living in Brisbane these days for someone who remembers chips costing 20c a packet and 1c lollies.

The ultimate value of an investment is always its real terms rather that the nominal ones, if you don't believe that then you missed a great opportunity to invest in the Zimbabwean stock market last year!

 

[mbl]

I ain't gonna argue with you geoffw....it's your forum, and you can do whatever you wish. However I am sure if you look through my posts and the replies to my posts, you will realise that there are plenty of posts by other users(I ain't naming names) who have been very hostile towards me, using words that would of banned me a long time ago.

 

[mbl]

What exactly are real terms?

From 1998 to 2005 I have a property that went from 218.9 gold ounces to 415.8 ounces, and think I could find some rare 'real' doublings in 7 years in Australian history if given a definition, I would look at the 1890's to begin with.

I'm interested in 'real' performance measures, sometimes I use gold ounces, working weeks, teacher's salaries and hamburgers when measuring financial worth. I find it perplexing that there isn't more focus on the real values of investments rather than their nominal values. Perhaps the simplest measure is just for how many years you can support your comfortable lifestyle in years, nudge it up high enough and you have financial wealth in my opinion regardless of the nominal $$.

Today I paid $22 for a steak sandwich, coffee and green tea. It was a nice sandwich I admit but I was musing about the cost of living in Brisbane these days for someone who remembers chips costing 20c a packet and 1c lollies.

The ultimate value of an investment is always its real terms rather that the nominal ones, if you don't believe that then you missed a great opportunity to invest in the Zimbabwean stock market last year!

Good post Andrew,.....however I think you have to come to the admittance that overall there has been asset price inflation these passed few years generally.

I will put in in more simpler terms. Have asset prices (whether it be gold or housing) increased with the same rate as average wages ?

 

[BoatBoy]

What exactly are real terms?

From 1998 to 2005 I have a property that went from 218.9 gold ounces to 415.8 ounces, and think I could find some rare 'real' doublings in 7 years in Australian history if given a definition, I would look at the 1890's to begin with.

I'm interested in 'real' performance measures, sometimes I use gold ounces, working weeks, teacher's salaries and hamburgers when measuring financial worth. I find it perplexing that there isn't more focus on the real values of investments rather than their nominal values. Perhaps the simplest measure is just for how many years you can support your comfortable lifestyle in years, nudge it up high enough and you have financial wealth in my opinion regardless of the nominal $$.

Today I paid $22 for a steak sandwich, coffee and green tea. It was a nice sandwich I admit but I was musing about the cost of living in Brisbane these days for someone who remembers chips costing 20c a packet and 1c lollies.

The ultimate value of an investment is always its real terms rather that the nominal ones, if you don't believe that then you missed a great opportunity to invest in the Zimbabwean stock market last year!

But you can't use steak sambo's and burgers as a real comparison.

At least the Gold comparison has a real world value.

Arguably the best steak sambo in Bris is at the "Fisher's Hotel" at Wynnum.

$14 in the Yuppie bit, same sanger $7-00 in the public.

So while your IP may be worth 13636 of your steak sanger's, mine will be worth 42857 steak sanger's.

BB

ps: never will bring myself to call it the "Wynnum Point" Hotel

 

[Arkay]

I have a different theory to offer regarding MBL given his IP address appears to be foreign in nature. I offer it as a question:

If you were able to find an investment forum in a foreign Country of interest (where you are trying to ascertain the investment landscape), what could you do in that forum to have it's members automatically and immediately answer all and any questions you have. To go out of their way to prove to you via evidence of market characteristics, that the market that you are interested in is indeed viable, without you having to lift a finger?

Go in there and ask nicely for some feedback or..........

Cheers,

Arkay.

 

[mbl]

I have a different theory to offer regarding MBL given his IP address appears to be foreign in nature. I offer it as a question:

If you were able to find an investment forum in a foreign Country of interest (where you are trying to ascertain the investment landscape), what could you do in that forum to have it's members automatically and immediately answer all and any questions you have. To go out of their way to prove to you via evidence of market characteristics, that the market that you are interested in is indeed viable, without you having to lift a finger?

Go in there and ask nicely for some feedback or..........

Cheers,

Arkay.

Good try........to much conspiracy though. Things are much more simpler than that.

I will tell you guy's that I am a Melbourne boy, born and bred.......and as Ripley would say 'believe it or not'.

 

[Glucose]

Good point, Arkay!

 

[Andrew_A]

I was just borrowing the 'big mac' index idea from the economist.

There are plenty of times in history when no amount of gold could buy you a steak sandwich, to be really pedantic you need to get down to measures such as the real life basics, food, water, time. I think there's an indian saying about money .. and food.. and not being able to eat dollars!

Sounds like a good steak sandwich place, will try and visit!

But you can't use steak sambo's and burgers as a real comparison.

At least the Gold comparison has a real world value.

Arguably the best steak sambo in Bris is at the "Fisher's Hotel" at Wynnum.

$14 in the Yuppie bit, same sanger $7-00 in the public.

So while your IP may be worth 13636 of your steak sanger's, mine will be worth 42857 steak sanger's.

BB

ps: never will bring myself to call it the "Wynnum Point" Hotel

 

[Ausprop]

phew, 334 posts of crystal ball gazing!

 

[twobobsworth]

Good article about debt and house prices in today's smh.

http://www.smh.com.au/news/national/home-prices-to-fuel-debt/2007/07/02/1183351125207.html

 

[Nullagine]

Good article about debt and house prices in today's smh.

http://www.smh.com.au/news/national/home-prices-to-fuel-debt/2007/07/02/1183351125207.html

"The general manager of Australian Property Monitors, Michael McNamara, said he coined the term "peak debt" to echo the "peak oil" theory, which suggests the production of oil has peaked and is running out. Likewise the capacity to borrow will simply run out, he claims."

He is being "economical with the truth". After I found that the Hubbert Curve, the derivative of the logistic curve (and made famous by geophysicist Hubbert in relation to "Peak Oil"), fitted the Aus debt to income curve well, on searching the internet I found others had coined the phrase "Peak Debt" about a year earlier.

You can see the discovery and evolution of the idea here (when Cracker works):
http://cracker.com.au/viewthread.aspx?threadid=159088&categoryid=11061

Note that:
"cracker.com.au is owned and operated by Fairfax Digital, a subsidiary of John Fairfax Holdings",
and Michael McNamara works for:
"Australian Property Monitors, a property analysis group owned by the publisher of the Herald, Fairfax Media".

 

[XBenX]

This thread is great value.

Comedy, champagne comedy

 

[Sunfish]

But on the other hand:

--A belated congratulations to the All Ordinaries for posting a 25%
gain in the recently-ended fiscal year (28% if you include reinvested
dividends). It was the single-best year for the Aussie index in 20
years - just before the 1987 crash - and came after a 19% gain in the
last fiscal year, a 19.8% gain the year before that, and a 17% gain the
year before that.
.......................
That is more than double in 4yrs.

 

[Mofra]

What exactly are real terms?

From 1998 to 2005 I have a property that went from 218.9 gold ounces to 415.8 ounces, and think I could find some rare 'real' doublings in 7 years in Australian history if given a definition, I would look at the 1890's to begin with.

Hi Andrew,

Glad someone is thinking in real terms rather than just a broad linear percentage over a timeframe. For mine gold is not a reliable measure (although better than some) simply because it does not measure the spending power of money within a domestic market, due to it's own inevitable fluctuations (the ultimate reserve currency for many). Personally it is the spending power of the dollar domestically that is a real measure. Perhaps the spending power of that asset related back to an arbitrary basket of goods (a la CPI) would be a better measure.

I don't mind the measure of housing affordability as a function of average salries either... at least this offers something of substance for the majority of buyers.

Enjoyed the hamburgers comment... perhaps a sly reference to the Big Mac index of international spending?

The ultimate value of an investment is always its real terms rather that the nominal ones, if you don't believe that then you missed a great opportunity to invest in the Zimbabwean stock market last year!

Exactly - although I'm not sure currency risk is overly applicable to the current debate (domestic property values); certainly something serious equities investors have had to take into account in recent years.

 

[Tim]

Arkay,

your theory about MBL is interesting however not true, she is in fact based in Melbs however my research indicates she doesn't own ANY property and from what I understand of her posts on this forum and her previous history she is simply a troll looking for attention. Pity she can't use her energy for anything important though.....

Tim