Yes Virginia , prices DO always go up ...

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Lots of people like to get involved in debates about predicting when and by how much markets are going to go . We also have debates as to the reasons why this will happen with many people putting in informed reasons why certain places won't go up .

I do get involved in these , but for me it's really of academic interest and it doesn't impact my decision making process except for giving me a heads up of where to look

The timing of my decision making is based around the well known concept of the property cycle . I'll buy some properties in the troughs if I see bargains , but generally I wait to buy more as the market starts to move more because you never really know how long it will be from the trough to when the maker starts moving .

So why do I believe in the property cycle ?

Well , the property market happens because it represents the pooled reaction of human beings and basic human reactions to certain situations don't change .

Borrowing on from common philosophy in the share market , when it comes to investing those emotions are fear and greed and until human masses learn to control those emotions and react logically then we will continue to have cycles , and those of us who are able to sit back and observe and react unemotionally will continue to build wealth .

There are certain caveats that I do look at and that is making sure I believe the economy of an area is sustainable , so for that reason I avoid mining town which in a sense are artificial creations , but most major cites have diversified economies and are unlikely to disappear.

I also believe that the same applies to Australia , it's unlilely to disappear or go anywhere , and because it's consider an attractive place to live I believe there will always be people wanting to move here so I believe we will have an growing population so there will always be an increasing demand for well located properties , so for this reason I don't think that concerns about baby boomers cashing up will cause a fundamental change in the Australian property market

Cliff
 
As long as population keeps increasing property will always go up in the long term. Simple supply and demand.
If some disease wipes 1 billion of us out then yes property prices will go down.
 
WattleIdo said:
Elementary, my dear Watson.
Who's Virginia.
Click to expand...

Google " yes Virginia "

Also gained some creedance in my generation from billy Joel's song " only the good die young " which is being sung to Virginia .

I've heard it being used to preface something that's obvious to someone who's innocent ...

Cliff
 
Also access to mass media has turbocharged this process, opportunities may close more quickly as many more people can move on information which is easier to access. When we first bought in BN 20 years ago it wasn't even considered by most people to buy interstate Unless you moved for work etc. Now its standard practice for anyone moving beyond a few properties.
Where once there were opportunities to purchase places with a 10% yield in major regional centres this is much harder now, but in a time of lower rates maybe 7% yield is the new 10%?
 
But they never told you the price you pay
For things that you might have done
Only the good die young!
Don't mind this one - very John Dunne/ romantic era if memory serves (manipulative seduction relating to wasted time

You might have heard I run with a dangerous crowd
We ain't too pretty we ain't too proud
We might be laughing a bit too loud
But that never hurt no one.
 
Hi Cliff, with a good percentage of white collar jobs now steadily going overseas, with those jobs not being replaced, what are your thoughts on what is going to happen to property values in the long term?
 
I agree with the basic premise (of cycles, humans repeating patterns), but is it conceivable there's more than 1 property cycle in play? What if the shorter cycles over the last 20-30 years are all part of one mega cycle that gives way to a more meaningful correction?

The correction following the 1890's land bubble saw some cities wait many decades for prices to recover (in real terms)... http://www.macrobusiness.com.au/2015/02/apra-must-rein-property-1890s-time/

Egan_Soos_01.png
 
see_change said:
I also believe that the same applies to Australia , it's unlilely to disappear or go anywhere , and because it's consider an attractive place to live I believe there will always be people wanting to move here so I believe we will have an growing population so there will always be an increasing demand for well located properties , so for this reason I don't think that concerns about baby boomers cashing up will cause a fundamental change in the Australian property market
Click to expand...

Hi Cliff, re-read your initial post. Frankly, I think if you believe this is accurate, you're living in the old world.

For at least the last 20 years, blue collar jobs have been moving offshore. For the last 5 - 10, white collar jobs have (slowly, but with increasing speed) also been moving offshore.

The reasons for people to come here to live are becoming less and less. Why would people move here when they can get the jobs that were previously only available here where they are now.

As I stated in another thread, offshore outsourcing is providing jobs to workers in other countries at rates, that whilst they would be considered low here are great over there. So those people, that might have come here once upon a time are choosing to stay home.

Not to mention that the jobs that would have been filled by Australians at one point in time are now being sent overseas. Those jobs are not being replaced. The fact is that a shrinking number of the populace are able to afford to buy, which is going to have massive effects on capital growth.

With the tax incentives currently in place for property investors in Australia, capital growth is their one hope for achieving wealth. The ABS figures show that - already, right now - less than 1% of Australians retire on an income of 50K+. The way the world economy is going, that number (in Australia) is going to get smaller.

We live in a very different world than we did even 10 years ago. The people that bury their heads in the sand and think things are going to keep on going the way they have are going to get left behind.
 
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see_change said:
Lots of people like to get involved in debates about predicting when and by how much markets are going to go .

Well , the property market happens because it represents the pooled reaction of human beings and basic human reactions to certain situations don't change .
Click to expand...
The only way to look at property from a investment ,,and some people have a very good record in predicting within this site then all the fast buck quick sell gurus that have come and gone,,all the for sale signs I drove past today in Brisbane had sold signs on them..
 
Mr Fabulous

you're missing the point as well .

Cycles have been existence for a long long time .

Technology is irrelevant .

as long as the things making the decisions ate people

Cliff
 
see_change said:
you're missing the point as well.
Click to expand...

No I'm not. Tell me this - I was listening to a podcast in which the business owners said that they have *about* 20 employees. 13 of them are in the Philippines.

That's 13 jobs in a single company that aren't being filled by Australians. The number of jobs that go overseas is only going to increase and as I stated earlier, those jobs aren't being replaced.

Also, I read an article a few months ago in which it was stated that about 10,000 engineers graduate in the U.S. every year and about 100,000 engineers graduate in China every year. That's just one industry. Tell me how Westerners are going to compete against qualified people that will work for a salary equal to 20% (or less!) of an Australian or Americans' salary.

Where is your capital growth going to come from when we have a shrinking population of people who can afford to buy houses?

In the U.S. over 50% of college graduates can't find work in their chosen fields.

Technology is irrelevant? Are you serious? Technology is allowing businesses of all shapes and sizes to take advantage of cheap(er) Third World labour. Which means less jobs for white collar workers (aka people that buy houses) here in Australia.
 
The Filipinos of course.....just like the Chinese before them...everyone aspires to settle in OZ on day! :D

Mr. Fabulous said:
No I'm not. Tell me this - I was listening to a podcast in which the business owners said that they have *about* 20 employees. 13 of them are in the Philippines.

That's 13 jobs in a single company that aren't being filled by Australians. The number of jobs that go overseas is only going to increase and as I stated earlier, those jobs aren't being replaced.

Where is your capital growth going to come from when we have a shrinking population of people who can afford to buy houses?
Click to expand...
 
sash said:
The Filipinos of course.....just like the Chinese before them...everyone aspires to settle in OZ on day! :D
Click to expand...

They came here looking for work. Why would they move here when the work is coming to them?

Incidentally, my opinion is that a strategy of buying posi properties (AirBnB, for instance), with little reliance of capital growth is the way to go.

I'm not talking about this happening overnight, my speculative view is it's going to take upwards of 20 years.
 
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