So The Economist has many opinions some bullish, some bearish and you can get a full education on property from wikipedia. OK then. I'm convinced. malachii
personally i am having a little trouble with the notion of selling a hard asset such as a cash flow positive mortgage free property for paper - sure you could sell at the "height" of a market but then what? half a million in metals or split into what areas?
Good for you, sport. "In April 2010, The Economist house price indicators estimated Australian house prices were the most overpriced in the world, at 56.1% overpriced (against long-run average of price to rents ratio)." http://www.economist.com/node/15911113?story_id=15911113
OK - so you've proved The Economist believes property in Australia is over valued by 56.1% on a price to rental ratio. Does this apply to every house in Australia? How about every house in Victoria? How about every house in Melbourne? Of course not and this is where you can make some money. You need to find a process where by you can identify good assets at good prices. Note that what you think is a good price for a good asset is not what I think is a good price. When some land around us was sold recently - the dairy farmers thought it was a good price at $8-10 000 per acre, the viticulturists thought it a good price at $15-20 000 and the developers thought it worth $40-50 000 per acre. Which was right and which was wrong? I don't know but each could make money and all thought the others were completely out of the ball park. You and I won't agree and I'll bet in 5 or 10 years both of us will be convinced we were right. At the end of the day though - as long as both of us are happy where we are, does it really matter? I'll keep chasing assets that make me good returns whether the price of real estate goes up or down and you'll be convinced that prices are too expensive until they reach the point you are happy and then maybe you'll buy. I've never yet met two people whose investment philosophies are the same. That is why I frequent forums like this as it makes me stretch my mind outside of what I believe. Thanks for challenging me! malachii
If you're earning a decent return through rent (this assumes you bought at a reasonable price), why would you sell when the market is down? You're missing the point malachii makes, it's not all about capital gains.
That's ok, malachii. I'm sure that even in a long downturn, your properties will be immune, because you chose them well in the first place. Who knows, could be!
Just got to say that this chart highlights everything I hate about national figures and the experts that produce them. Take the USA for example. It appears 3 times in this chart. One saying that houses are undervalued by 3.7%, the next overvalued by 3.9% and the last, overvalued by 13.1%. The first 2 are even quoted from the same source (Case-Schiller). Talk about using statistics to prove any point! malachii
Malachi i been wanting to chime in on this conversation but you have been doing such a fine job today ive just sat & read it . what a pleasure to read .Nice work
I'll be selling out when i have enough to knock off a nice chunk off the loan of my IP's. I was cruising along nicely before i started investing in PM ~ 2 months ago. This is like icing on the cake. IP's got me to where I am today, and IP's will see me out
Personally, I'm waiting for the medicine or food industry to start offering futures and derivatives so we can speculate on that. I mean people need food and medical care just like shelter right? Let's squeeze the bastards for all their worth, retire at 40 and make the tax payer foot the bill! In the end, we'll give them their food and medicine so we're doing them a favour anyway. Increase the profits on food and medicine and you'll get more supply so they cannot complain, right? Who's with me?
There's already a food futures industry - it's called farming and having grown up on a farm - it's not all that much of an easy money spinner. malachii
How about medicine then? Surely with all these old folks retiring and a government handout we can invest in sending these drugs to the moon for profit? They're all cashed up with their house values going up in recent times, so surely they can pay what we ask? And we are still providing the community a service after all? Lots of incoming investment dollars into drugs means more drug tech and supply on offer? Best part is, we can doubly whammy the system! Buy as massive amount of pharmaceutical shares and negatively gear the loan cost. We can do that right? What we need here is a first medical insurance owners' grant. Something to boost demand of our product and give those oldies and bogans on minimum wage or pensions a leg into the market? Good vote buying opportunity right there, made Obama real popular with the plebs so we know it works. Or maybe we could release the black plague back into the system? Make lots of people sick and drive up prices? Prescriptions to the moon has a nice ring to it as a media sound bite, don't you think? Well, maybe not so blatant as that. It might irk a few. How about we screw around with the water supply a bit. Add in a few chemicals and get the people to believe it's to keep their teeth healthy? Maybe we could get it into the food too, grow the food quicker and things? We should also ensure those fast food mobs keep the piggies out there nice and fat for harvest too. That's always good for the industry! And then what we can do is ask the government to ban or restrict certain drugs through 'testing' by restricting patents and requirements for extended trials to limit the market supply, driving up profits even further? We could easily corner the market and make a killing I reckon. Go get a M3 and retire at 40 whilst we shave those older folks of all those fat profits they made screwing us on housing. This sounds like an awesome plan actually. Might need to go see my bank manager and fire up a loan... I could retire in the next few years if I played my cards right. At the very least, double down in the next 7 to 10 AND do the community a favour providing medical care!
Didn't realise I was reading an old post and mistakenly bumped this one. Sorry guys Mods feel free to delete.
